EXECUTIVE EMPLOYMENT AGREEMENT
This
Employment Agreement dated as of August 7, 2007 (“Agreement”)
is
made by and between Dot
VN, Inc.,
a
corporation duly organized and existing under the laws of the State of Delaware
(the “Company”),
and
Xxxxx
X. Xxxxx
(“Executive”)
(referred to collectively herein as the “Parties”).
RECITALS
| A. |
WHEREAS,
Executive is serving as its General Counsel, and one of Company’s “key
men”; and
|
| B. |
WHEREAS,
Executive currently sits on the Company’s Board of Directors;
and
|
| C. |
WHEREAS,
Company desires to retain Executive's services, to formalize its
employment agreement with him, and to demonstrate its appreciation
for his
efforts; and
|
| D. |
WHEREAS,
Company and the Executive wish to clarify their respective rights
concerning the Executive's employment relationship with
Company.
|
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants and promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as
follows:
| 1. |
Nature
of Agreement.
Any
and all prior oral understandings, offers, and/or representations (if
any)
with respect to the employment of Executive are deemed by the parties
to
be either canceled and void and/or are deemed to be superseded by this
final written Agreement.
|
| 2. |
Employment
Terms and Duties.
|
2.1. Term
of Employment.
The
employment of Executive under this Agreement shall be deemed to have commenced
on August 7, 2007, and shall continue until terminated in accordance with
Section 6 hereof (the “Employment
Term”).
2.2. Location.
Executive agrees that he shall carry out his duties and obligations under the
terms of this Agreement at the Company’s principal office in San Diego,
California and at such place or places as Company shall reasonably designate
or
as shall be reasonably appropriate and necessary in connection with such
employment.
2.3. Position
and Primary Responsibility.
| a) |
It
is understood that Executive shall serve as General Counsel and Secretary
for the Company with all powers and obligations associates with such
position as set forth in the Bylaws of the Corporation. Contemporaneously
with the execution and delivery of this Agreement, the Company shall
effectuate all such actions as shall be required to procure the
appointment of Executive as General Counsel and Corporate Secretary
of the
Company.
|
The
Company agrees that, during the Employment Term, neither the Restated
Certificate of Incorporation, nor the Bylaws, of the Company shall at any time
be amended in a manner inconsistent with the foregoing or the additional
provisions of this Agreement.
2.4 Best
Efforts.
Executive agrees to devote his best efforts to the performance of Executive’s
duties hereunder and to the business and affairs of Company..
This
Agreement shall not be interpreted to prohibit Executive from making passive
personal investments or conducting private business affairs, or serving on
the
boards of directors of other companies or other entities, if those activities
do
not materially interfere with the services required under this Agreement and
do
not violate Sections 5, 9 and/or 11 of this Agreement.
| 3. |
Compensation.
|
3.1. Base
Salary.
Company
will compensate Executive for the services rendered hereunder a Base Salary
of
$120,000.00 per year payable in accordance with the regular payroll practices
of
Company. The Executive's Base Salary shall be subject to annual review by the
Board and may be increased, but not decreased, from time to time by the Board.
No increase to Base Salary shall be used to offset or otherwise reduce any
obligations of Company to the Executive hereunder or otherwise. The base salary
as determined herein from time to time shall constitute "Base Salary" for
purposes of this Agreement.
3.2. Employee
Benefits.
Executive shall also be entitled to all rights and benefits for which Executive
shall be eligible under bonus, vacation, sick days, pension, group insurance,
disability, life insurance, profit-sharing or other Company benefits which
may
now or in the future be in force from time to time and provided to Executive
or
for Company's employees generally. Additionally, Executive shall be entitled
to
a non-accountable monthly allowance of Five Hundred Dollars ($500.00)
(the“Monthly
Allowance”).
3.3. Business
and Travel Expenses.
During
the Employment Term, the Company shall reimburse the Executive for all
reasonable and necessary business and travel expenses incurred by the Executive
while performing his duties under this Agreement in accordance with the
Company’s customary practices for its executive employees, subject to provision
by the Executive of documentation reasonably satisfactory to the Company.
Further, Executive shall be entitled to a non accountable one hundred dollar
($100.00) per day allowance while traveling on the Company’s
account.
3.4. Cash
and Equity Bonuses.
The
Executive shall have a
bonus
entitlement during each calendar year (or portion thereof) of the Employment
Term equal to one hundred percent of his Base Salary for such year (or portion
thereof) payable to Executive in cash or equity or any combination thereof
at
the election of Executive.. Within thirty (30) days of the Effective Date,
the
Company and the Executive shall concur, within their respective reasonable
discretion, on the criteria and procedures applicable to establishment of
Executive’s entitlement to such amount for the then current calendar year; and,
thereafter, within thirty (30) days prior to the commencement of each calendar
year of the Employment Term, the Company and the Executive shall concur, within
their respective reasonable discretion, on the criteria and procedures
applicable to establishment of Executive’s entitlement to such amount for the
ensuing calendar year. Such criteria shall include, without limitation: (i)
specified revenue targets for the Company during the applicable period; (ii)
specified EBITDA targets for the Company during the applicable period (as
defined pursuant to consensus between the Company and the Executive); (iii)
completion of projects defined by the Board; and (iv) additional specified
targets for the Company and/or the Executive.
3.5. Payment.
All
compensation payable to Executive hereunder shall be subject to all applicable
state and federal employment law(s); it being understood that Executive shall
be
responsible for the payment of all taxes resulting from a determination that
any
portion of the compensation and/or benefits paid/received hereunder is a taxable
event to Executive; it being further understood that Executive shall hold the
Company harmless from any governmental claim(s) for Executive’s personal tax
liabilities, including interest or penalties, arising from any failure by
Executive to pay his individual taxes when due.
3.6. Compensation
Review.
It is
understood and agreed that Executive’s performance will be reviewed by the
Company’s Board of Directors as of the anniversary date of each year this
Agreement is in force for the purpose of determining whether or not Executive’s
Base Salary and/or cash bonuses should be increased; it being further understood
that the decision to increase Executive’s compensation shall be at the sole and
exclusive option of the Board of Directors.
3.7. Equity
Awards.
(a)
Grant
of Option.
The
Company
hereby irrevocably grants to the Executive a non-assignable, non-transferable
option to purchase shares in the capital stock of Company (hereinafter called
the “Option”). The Option shall vest over a three (3) year period, beginning
July 1, 2007. Each year, the Executive may exercise up to one-third (1/3) of
the
Option, by notice in writing to Company to that effect. The Option shall be
exercisable for a ten-year period as shown below. Any such notice given to
Company (an “Exercise Notice”) shall specify the number of shares with respect
to which the Option is being exercised and shall be accompanied by full payment
of the Option Price for the number of shares then being purchased.
2
|
Date
Vested
|
Expiration
Date
|
#
Available
|
Exercise
Price
|
|||
|
8/7/07
|
8/7/17
66,666
|
$1.80/share
|
||||
|
8/7/08
|
8/7/18
66,667
|
$1.80/share
|
||||
|
8/7/09
|
8/7/19
66,667
|
$1.80/share
|
Executive
shall also have the right to exercise this Option or any portion thereof (the
"Exercise Right"), without payment by the Executive of the Exercise Price in
cash or any other consideration (other than the surrender of rights to receive
Options Shares hereunder), into shares of Common Stock as provided in this
Section 3.7 (a). Upon receipt by the Company of a duly executed and completed
Conversion Notice in the form attached hereto as Exhibit
B
for the
exercise of the Exercise Right with respect to a particular number of Option
shares (the “Options Shares"), the Company shall deliver to the Executive
(without payment by the Executive of the exercise price in cash or any other
consideration (other than the surrender of rights to receive Options Shares
hereunder)) that number of shares of Common Stock equal to the quotient obtained
by dividing: (x) the difference between (i) the product of (A) the Current
Market Price of a share of Common Stock multiplied by (B) the number of Options
Shares and (ii) the product of (A) the Exercise Price multiplied by (B) the
number of the Options Shares, in each case as of the exercise date, by (y)
the
Current Market Price of a share of Common Stock on the exercise date. Further,
in the event of a “Change of Control”, as such term is defined in Section 6.2,
then the Options shall immediately vest and be available for exercise by the
Executive.
(b) Termination
of Option.
The
Option is not assignable or transferable and shall terminate pursuant to the
schedule set forth in Section 3.6 (a). All rights to exercise such Options
shall
be forfeit and otherwise extinguished in the event that the Executive fails
to
exercise it for any reason or cause whatsoever, provided, however, that if
such
failure is due to the death of the Executive, all options shall immediately
vest
and the personal representative of the Executive shall have the right to
exercise any unexercised part of the Option for a period of one year following
the date of death of the Executive.
(c) Grant
of Stock.
In
connection with the execution of this Agreement, Executive shall be entitled
to
a stock grant of 19,445 shares of the Company’s common stock. Such shares to be
fully paid, duly authorized, and non-assessible upon issuance to
Executive.
| 4. |
Representations.
|
4.1. Executive
Representations.
Executive hereby represents and warrants that:
His
employment with the Company under the terms of this Agreement will not conflict
with any continuing duty(ies) or obligation(s) Executive has with any other
person(s), firm(s) and/or entity(ies). Executive also represents that he has
not
brought to the Company (during the period before or after the Effective Date
of
this Agreement) any confidential material(s) and/or document(s) of any former
employer(s), or any confidential information or property belonging to
other(s).
During
the Employment Term, he will promptly disclose to the Board of Directors of
the
Company any direct interest (greater than five percent (5%)) he holds, if any,
in any business which provides service(s) and/or product(s) to the Company
(whether as a principal, stockholder, lender, employee, director, officer,
partner, venturer, consultant or otherwise).
4.2. Company
Representations.
The
Company hereby represents and warrants that:
3
The
execution and delivery by the Company of this Agreement, the performance by
the
Company of its covenants and agreements under this Agreement, and the
consummation by the Company of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate action. When executed
and
delivered by the Company, this Agreement shall constitute the valid and legally
binding obligation of the Company enforceable against the Company in accordance
with its terms.
Neither
the execution and delivery of this Agreement by the Company nor the consummation
by the Company of the transactions contemplated in this Agreement will violate
any provision of the Restated Certificate of Incorporation or Bylaws of the
Company or any law, rule regulation, writ, judgment, injunction, decree,
determination, award or other order of any court, governmental agency or
instrumentality binding upon the Company, or conflict with or result in any
breach of or event of termination under any of the terms of, or the creation
or
imposition of any mortgage, deed of trust, pledge, lien, security interest
or
other charge or encumbrance of any nature pursuant to, the terms of any contract
or agreement to which the Company is a party or by which the Company or any
of
its properties or assets is bound. No conversion or exercise price or ratio
with
respect to any securities of the Company will be subject to adjustment as a
consequence of the transactions contemplated by this Agreement, nor as a result
of such transactions will the number of securities issuable upon conversion
or
exercise of any outstanding securities of the Company be subject to
adjustment.
The
Equity Award, when issued and delivered in accordance with the terms of this
Agreement, shall be validly issued, fully paid and non-assessable shares of
Common Stock, free and clear of any mortgages, deeds of trust, pledges, liens,
security interests or any charges or encumbrances of any nature (other than
the
restrictions on the Restricted Shares expressly contemplated hereunder). There
are no preemptive rights with respect to any shares of capital stock of the
Company.
| 5. |
Termination.
Executive’s employment and this Agreement (except as otherwise provided
hereunder) shall terminate upon the occurrence of any of the following,
at
the time set forth therefor (the “Termination
Date”):
|
5.1. Death
or Disability.
Immediately upon the death of Executive or after six (6) months of Executive’s
inability to perform the essential functions of his duties, with or without
reasonable accommodation (defined in Section 6.8 below), due to a mental or
physical illness or incapacity (“Disability”)
(termination pursuant to this Section 6.1 being referred to herein as
termination for “Death
or Disability”);
5.2. Termination
for Good Reason.
Immediately following notice of termination for “Good Reason” (as defined
below), specifying such Good Reason, given by Executive (termination pursuant
to
this Section 6.2 being referred to as termination for “Good
Reason”.
As
used herein, “Good
Reason”
means
(i) any reduction in Base Salary; (ii) a substantial dilution of the
responsibilities, functions and duties attached to the position with the Company
held by Executive; (iii) the Company fails to provide any of the compensation
or
other benefits required hereunder; (iv) the Company otherwise is in material
breach of this Agreement; or (v) the Company and the Executive fail to
effectuate the matters contemplated by Sections 3.4, 3.6 or 4 within the
respective periods contemplated thereunder. Any determination of Good Reason
shall be made by Executive after first having given thirty (30) days written
notice to the Board of Directors of the Company thereof.
5.3. Voluntary
Termination.
Thirty
(30) days following Executive’s written notice to the Company of voluntary
termination of employment (not extending to termination for Good Reason);
provided, however, that the Company may waive all or a portion of the thirty
(30) days’ notice and accelerate the effective date of such termination (and the
Termination Date) (termination pursuant to this Section 6.2 being referred
to
herein as “Voluntary”
termination); or
5.4. Termination
For Cause.
Immediately following notice of termination for “Cause” (as defined below),
specifying such Cause, given by the Company (termination pursuant to this
Section 6.4 being referred to herein as termination for “Cause”).
As
used herein, “Cause”
means
(i) termination based on Executive’s conviction or plea of “guilty” or “no
contest” to any crime constituting a felony in the jurisdiction in which the
crime constituting a felony is committed (other
than one involving Limited Vicarious Liability),
any
crime involving moral turpitude (whether or not a felony), or any other
violation of criminal law involving dishonesty or willful misconduct that
materially injures the Company (whether or not a felony); (ii) Executive’s
substance abuse that in any manner interferes with the performance of his
duties; (iii) Executive’s
failure to perform the
responsibilities, functions and duties attached to the position with the Company
or
a
refusal to perform his duties at all or in a
reasonably
acceptable manner; (iv) Executive’s failure to follow the lawful and proper
directives of the Board of Directors that
are
within the scope of Executive’s duties; or
(v)
Executive’s material
breach of this Agreement.
Any
determination of for Cause termination shall be made by the Board of Directors
of the Company after having first given thirty (30) days written notice to
Executive of such determination, and afforded Executive the opportunity to
be
heard by the full Board of Directors. Notwithstanding any other provision in
this Agreement, if Executive is terminated pursuant to subsection (iii) of
this
Section 6.4 for poor job performance, excluding refusal to perform his duties,
Executive shall have sixty (60) days to cure the behavior upon which the
threatened termination is based. For the purpose of this provision, the term
“Limited Vicarious Liability” shall mean any liability which is based on acts of
Company for which Executive is responsible solely as a result of his office(s)
with Company; provided that (A) he was not directly involved in such acts and
either had no prior knowledge of such intended actions or, upon obtaining such
knowledge, promptly acted reasonably and in good faith to attempt to prevent
the
acts causing such liability or (B) after consulting with Company's counsel,
he
reasonably believed that no law was being violated by such acts.
4
5.5. Termination
Without Cause.
Notwithstanding any other provisions contained herein, the Company may terminate
Executive’s employment thirty (30) days following notice of termination without
Cause given by the Company; provided, however, that during any such thirty
(30)
day notice period, the Company may suspend, with no reduction in pay or
benefits, Executive from his duties as set forth herein (including, without
limitation, Executive’s position as a representative and agent of the Company)
(termination pursuant to this Section 6.5 being referred to herein as
termination “Without
Cause”).
5.6. Other
Remedies.
Termination pursuant to Section 6.3 above shall be in addition to and without
prejudice to any other right or remedy to which Executive may be entitled at
law, in equity, or under this Agreement. Termination pursuant to Section 6.4
above shall be in addition to and without prejudice to any other right or remedy
to which the Company may be entitled at law, in equity, or under this
Agreement.
5.7. Salary
Continuation During Disability.
Notwithstanding Section 6.1 above, if Executive suffers any physical or mental
disability that would prevent the performance of his essential job duties,
the
Company agrees to pay Executive one hundred percent (100%) of Executive’s
salary, payable in the same manner as provided for the payment of salary herein,
for the duration of the disability, or six (6) months, whichever is less.
5.8. Reasonable
Accommodation.
“Reasonable
accommodation”
shall
mean the acquisition or modification of equipment or devices, adjustment or
modifications of training materials or policies, the provision of qualified
readers or interpreters, and other similar accommodations for individuals with
disabilities so long as said accommodation does not require significant
difficulty or expense when considered in light of (i) the nature and cost of
the
accommodation, (ii) the impact of the accommodation on the operations of the
Company, and (iii) the financial resources of the Company.
| 6. |
Severance
and Termination.
|
6.1. Voluntary
Termination, Termination for Cause, Termination for Death or
Disability.
In the
case of a termination of Executive’s employment hereunder for Death in
accordance with Section 6.1 above, or Executive’s Voluntary termination of
employment hereunder in accordance with Section 6.3 above, or a termination
of
Executive’s employment hereunder for Cause in accordance with Section 6.4 above,
(i) Executive shall not be entitled to receive payment of, and the Company
shall
have no obligation to pay, any severance or similar compensation attributable
to
such termination, other than Base Salary earned but unpaid, accrued but unused
vacation to the extent required by the Company’s policies and any non-reimbursed
expenses pursuant to Section 4 hereof incurred by Executive as of the
termination date, and (ii) the Company’s obligations under this Agreement shall
immediately cease except as required by law. Provided further, in the event
of
Executive’s Voluntary termination of employment hereunder in accordance with
Section 6.3 above, or a termination of Executive’s employment hereunder for
Cause in accordance with Section 6.4 above, Executive shall tender back to
the
Company all unexercised options granted to Executive by the Company in
connection with Executive’s employment.
6.2. Termination
for Good Reason, Termination Without Cause.
In
the
case of a termination of Executive’s employment hereunder for Good Reason in
accordance with Section 6.2 above, or Without Cause in accordance with Section
6.4 above, the Company shall, within 30 days of the Termination Date, pay
Executive, in a lump-sum, cash in the amount (the “Severance
Payment”)
of the
sum of (x) 50% of his annual Base Salary then in effect plus (y) the product
obtained by multiplying the Monthly Allowance and six; provided, however, that,
in the event such termination of Executive’s employment follows a
“Change-of-Control” (as defined below), the Severance Payment shall be an amount
equal to the sum of (x) 150% of his annual Base Salary then in effect plus
(y)
the product obtained by multiplying the Monthly Allowance and 18. As used
herein, “Change-of-Control”
means:
5
(i) the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) under the Securities Exchange Act of 1934, as amended
[the
“Exchange
Act”])
of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of the combined voting power of the outstanding
voting securities of the Company entitled to vote generally in the election
of
directors; provided, however, that the following acquisitions shall not
constitute a Change-of-Control: (w) any acquisition directly from the Company,
(x) any acquisition by the Company, (y) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company, or (z) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (w), (x) and (y) immediately preceding; or
(ii) individuals
who, as of the date hereof, constitute the Board of Directors of the Company
(the “Incumbent
Board”)
cease
for any reason to constitute at least a majority of the Board of Directors
of
the Company unless they are replaced with a slate nominated by at least a
majority of the Incumbent Board and further provided that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company's stockholders, was approved by a vote of at least
a
majority of the directors then comprising the Incumbent Board shall, for
purposes of this sub-paragraph (ii), be considered as though such individual
were a member of the Incumbent Board, but excluding, for this purpose, any
such
individual whose initial assumption of office occurs as a result of an actual
or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of an individual, entity or group other than the Board of Directors
of
the Company acting by at least a majority thereof; or
(iii) Consummation
of a reorganization, merger or consolidation or sale or disposition of all
or
substantially all of the assets of the Company (a “Business
Combination”),
in
each case, unless, following such transaction: (x) all or substantially all
of
the individuals and entities who were the beneficial owners, respectively,
of
the outstanding voting securities of the Company entitled to vote generally
in
the election of directors immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% (20% in the case of
any
Business Combination being proposed and implemented by at least a majority
of
the Incumbent Board) of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the Company
or all or substantially all of the Company's assets either directly or through
one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the outstanding
voting securities of the Company entitled to vote generally in the election
of
directors, (y) no individual, entity or group beneficially owns, directly or
indirectly, 20% or more of the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination, and (z) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board, or were nominated
by
at least a majority of the members of the Incumbent Board, at the time of the
execution of the initial agreement, or by the action of the Board providing
for
such Business Combination; or
(iv) Approval
by the stockholders of the Company of a complete liquidation or dissolution
of
the Company.
In
addition, in the event Paragraph (a) immediately preceding applies, for six
months after the Termination Date (or such longer period as may be provided
by
the terms of the appropriate plan, program, practice or policy), the Company
shall continue Welfare Benefits to the Executive and/or his family at least
equal to those which would have been provided if the Executive’s employment had
not been terminated (provided, however, that such period shall be eighteen
months in the event such Paragraph (a) applies following a
Change-of-Control).
6
Notwithstanding
the foregoing, in the event Executive is a “specified employee” as defined in
Section 409A(a)(2)(B)(i) of the Code, the payment of the Severance Payment
under
this Section 7.2 shall be made no earlier than six months after the Termination
Date.
| 7. |
Severance
Not Conditioned on Release of Claims.
|
7.1. Release.
The
Company’s obligation to provide Executive with the Severance Payment set forth
in Section 7.2 is not contingent upon Executive’s execution of a release of
claims in favor of the Company.
8. Non-competition,
Non-solicitation.
8.1. Non-Competition.
Executive agrees that he shall not, during the Employment Term and for twelve
(12) months subsequent thereto, without both the disclosure to and the written
approval of the Board of Directors of the Company, directly or indirectly,
engage or be interested in (whether as a principal, lender, employee, officer,
director, partner, venturer, consultant or otherwise) any business(es) that
is
competitive with the business being conducted by the Company through the
Termination Date, without the express written approval of the Board of
Directors.
8.2. Non-Solicitation.
Executive agrees that he will not, without the prior written consent of the
Company’s Board of Directors, for a period of twelve (12) months after the
Termination Date, directly or indirectly disturb, entice, or in any other manner
persuade, any employee(s) or consultant(s) of the Company to discontinue that
person’s or firm’s relationship with the Company if the employee(s) and/or
consultant(s) were employed by the Company at any time during the twelve (12)
month period prior to the Termination Date.
8.3. Customers.
Executive agrees that he will not, for a period of twelve (12) months following
the Termination Date, contact or solicit orders, sales or business from any
customer of the Company so as to induce or attempt to induce such customer
to
cease doing business with the Company.
8.4. Public
Investments.
The
provisions of Section 8.1 through 8.3, inclusive, shall not be deemed breached
by reason of Executive’s ownership of 10% or less of the equities of any entity
with a class of publicly traded securities.
9. Inventions,
Discoveries and Improvements.
Any and
all invention(s), discovery(ies) and improvement(s), whether protectible or
unprotectible by patent, trademark, copyright or trade secret, made, devised,
or
discovered by Executive, whether by Executive alone or jointly with others,
from
the time of entering the Company’s employ until the earlier of the Termination
Date of this Agreement or the actual date of termination of employment, relating
or pertaining in any way to Executive’s employment with the Company, shall be
promptly disclosed in writing to the Board of Directors of the Company, and
become and remain the sole and exclusive property of the Company. Executive
agrees to execute any assignments to the Company, or its nominee, of the
Executive’s entire right, title, and interest in and to any such inventions,
discoveries and improvements and to execute any other instruments and documents
requisite or desirable in applying for and obtaining patents, trademarks or
copyrights at the cost of the Company, with respect thereto in the United States
and in all foreign countries, that may be requested by the Company. Executive
further agrees, whether or not then in the employment of the Company, to
cooperate to the fullest extent and in the manner that may be reasonably
requested by the Company in the prosecution and/or defense of any suit(s)
involving claim(s) of infringement and/or misappropriation of proprietary rights
relevant to patent(s), trademark(s), copyright(s), trade secret(s), processes,
and/or discoveries involving the Company’s product(s); it being understood that
all reasonable costs and expenses thereof shall be paid by the Company. The
Company shall have the sole right to determine the treatment of disclosures
received from Executive, including the right to keep the same as a trade secret,
to use and disclose the same without a prior patent application, to file and
prosecute United States and foreign patent application(s) thereon, or to follow
any other procedure which the Company may deem appropriate. In accordance with
this provision, Executive understands and is hereby further notified that this
Agreement does not apply to an invention which the employee developed entirely
on his own time without using the Company’s equipment, supplies, facilities, or
trade secret information.
7
10. Confidential
Information and Trade Secrets.
10.1. Non-Disclosure.
Executive hereby acknowledges that all confidential or proprietary trade,
engineering, production, and technical data, information or “know-how”
including, but not limited to, customer lists, sales and marketing techniques,
vendor names, purchasing information, processes, methods, investigations, ideas,
equipment, tools, programs, costs, product profitability, plans, specifications,
patent application(s), drawings, blueprints, sketches, layouts, formulas,
inventions, processes and data, whether or not reduced to writing, used in
the
development and manufacture of the Company’s products and/or the performance of
services, or in research or development, are the exclusive property of the
Company, and shall be at all times, whether after the Effective Date or after
the Termination Date, be kept strictly confidential and secret by Executive;
it
being understood, however, that information which was publicly known, or which
is in the public domain, or which is generally known, shall not be subject
to
this restriction (and Executive’s duties of non-disclosure shall further not
extend to (i) disclosures to other employees, executives, officers and/or
directors of the Company, or as may be required or appropriate in connection
with performance hereunder, and (ii) the requirements of legal process, subpoena
or other court order).
10.2. Return
of Property.
Executive agrees not to remove from the Company’s office or copy any of the
Company’s confidential information, trade secrets, books, records, documents or
customer or supplier lists, or any copies of such documents, without the express
written permission of the Board of Directors of the Company or as may be
required or appropriate in connection with performance hereunder. Executive
agrees, at the Termination Date, to return any property belonging to the
Company, including, but not limited to, any and all records, notes, drawings,
specifications, programs, data and other materials (or copies thereof)
pertaining to the Company’s businesses or its product(s) and service(s),
generated or received by Executive during the course of his employment with
the
Company.
11. Information
of Others.
Executive agrees that the Company does not desire to acquire from Executive
any
secret or confidential information or “know-how” of others. Executive,
therefore, specifically represents to the Company that he will not bring to
the
Company any materials, documents, or writings containing any such information.
Executive represents and warrants that from the Effective Date of this Agreement
he is free to divulge to the Company, without any obligation to, or violation
of, the rights of others, information, practices and/or techniques which
Executive will describe, demonstrate or divulge or in any other manner make
known to the Company during Executive’s performance of services. Executive also
agrees to indemnify and hold the Company harmless from and against any and
all
liabilities, losses, costs, expenses, damages, claims or demands for any
violation of the rights of others as it relates to Executive’s misappropriation
of secrets, confidential information, or “know-how” of others. Such
indemnification will not apply in the event action by the Company is
unsuccessful.
12. SURVIVAL.
Executive’s duties under paragraphs 8,9,10 and 11 survive termination of
Executive’s employment with Company. Executive acknowledges that a remedy at law
for any breach or threatened breach by Executive of the provisions of the
Proprietary Information Agreement would be inadequate and Executive therefore
agree that Company shall be entitled to injunctive relief in case of any such
breach or threatened breach.
13. Indemnification.
The
Company shall indemnify Executive in his capacity as director, officer and
employee of the Company upon terms no less favorable to him than are contained
under Article 7 of the Restated Certificate of Incorporation of the Company,
and
Article VI of the By-laws of the Company, as in effect on the date hereof.
The
Company shall extend to Executive the benefits of directors’ and officers’
liability insurance upon terms no less favorable than are extended to any other
director or officer of the Company.
14. Notice.
14.1. Notices.
All
notices and other communications under this Agreement shall be in writing and
shall be delivered personally or mailed by registered or certified mail, return
receipt requested, and shall be deemed given when so delivered or mailed, to
a
party at his or its address as follows (or at such other address as a party
may
designate by notice given hereunder):
If
to
Executive: At
the
address (or to the facsimile number) shown on the records
of
Company.
8
If
to the
Company:
Dot
VN,
Inc.
0000
Xxxxxx Xxx., Xxxxx 000
Xxx
Xxxxx, XX 00000
| 15. |
Dispute
Resolution. If
the Parties are unable to resolve a dispute informally, the following
provisions shall control:
|
15.1. Excepting
claims for injunctive relief and/or other equitable relief for unfair
competition and/or the use or unauthorized disclosure of trade secrets or
confidential information, both Company and Executive shall submit all claims,
disputes or controversies (“Claims”) against the other arising from or relating
in any way to this Agreement, whether based in contract or tort, including
discrimination claims under state and federal law, claims that could otherwise
be asserted in class action litigation, such as wage and hour claims,
discrimination claims, post-termination claims, and claims regarding the
applicability of this arbitration clause or the validity of the Agreement,
to
binding arbitration pursuant to the rules of the American Arbitration
Association. Nothing herein shall be construed to preclude class arbitrations
on
common issues. In all arbitration matters, Company shall bear the costs of
the
forum and all arbitrator(s) fees.
15.2. All
claims subject to arbitration shall be arbitrated by a sole arbitrator, who
shall have the power to determine all issues, including arbitrability, award
equitable relief and all forms of damages, including punitive damages. If the
Parties cannot agree on a single arbitrator, or a method to select a single
arbitrator, a panel of 3 arbitrators shall be employed, the Parties each
selecting one arbitrator, and the two arbitrators so selected shall choose
a
third “independent” arbitrator. All arbitrators must have experience specific to
the subject matter of the dispute. The arbitration hearing will be held in
San
Diego, California. The decision shall be in writing and include a statement
of
facts and the reason for the decision. Judgment may be entered in any court
of
competent jurisdiction after a thirty day waiting period, during which time
the
Parties further agree that all proceedings are to remain confidential. If the
affected party fully complies with the arbitration award within 30 days, no
further proceedings shall be had, and the matter shall be considered concluded.
IN
THE
ABSENCE OF THIS ARBITRATION AGREEMENT YOU AND WE MAY OTHERWISE HAVE HAD A RIGHT
OR OPPORTUNITY TO LITIGATE CLAIMS THROUGH A COURT, AND / OR TO PARTICIPATE
OR BE
REPRESENTED IN LITIGATION FILED IN COURT BY OTHERS, BUT EXCEPT AS OTHERWISE
PROVIDED ABOVE, ALL CLAIMS MUST NOW BE RESOLVED THROUGH
ARBITRATION.
| 16. |
NONDISPARAGMENT.
Except for statements made in the course of sworn testimony in
administrative, judicial or arbitral proceedings, both Executive and
Company (for purposes hereof, Company shall mean only the executive
officers and directors thereof and not any other employees) agree not
to
make any public statements that disparage the other party, or in the
case
of Company, its respective affiliates, employees, officers, directors,
products or services.
|
| 17. |
ATTORNEY'S
FEES. Except for matters subject to the mandatory arbitration provisions
of Section 17, if either party brings any action to enforce its rights
hereunder, the prevailing party in any such action shall be entitled
to
recover his or its reasonable attorneys' fees and costs in connection
with
such action.
|
| 18. |
Miscellaneous.
|
18.3. Post
Termination Obligations.
Notwithstanding the termination of Executive’s employment hereunder, the
provision(s) of Section(s) “5,” “7,” “9,” “10,” “11,” “13,” and “15” shall
survive the Termination Date.
18.4. Assignment.
This
Agreement shall be assigned to and inure to the benefit of, and be binding
upon,
any successor to substantially all of the assets and business of the Company
as
a going concern, whether by merger, consolidation, liquidation or sale of
substantially all of the assets of the Company or otherwise. The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Agreement
in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place; and, as used in this
Agreement, "Company"
shall
mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement
by
operation of law, or otherwise. Executive understands and agrees, however,
that
this Agreement is exclusive and personal to him only, and, as such, he will
neither assign nor subcontract all or part of his undertaking(s) or
obligation(s) under the terms of this Agreement.
9
18.5. Severability.
In the
event that any provision of this Agreement shall be determined to be
unenforceable or otherwise invalid, the balance of the provision(s) shall be
deemed to be enforceable and valid; it being understood that all provision(s)
of
this Agreement are deemed to be severable, so that unenforceability or
invalidity of any single provision will not affect the remaining
provision(s).
18.6. Headings.
The
Section(s) and paragraph heading(s) in this Agreement are deemed to be for
convenience only, and shall not be deemed to alter or affect any provision
herein.
18.7. Interpretation
of Agreement.
This
Agreement shall be interpreted in accordance plain meaning of its terms and
under the laws of the State of Delaware.
18.8. Variation.
Any
changes in the Sections relating to salary, bonus, or other material
condition(s) after the Effective Date of this Agreement shall not be deemed
to
constitute a new Agreement. All unchanged terms are to remain in force and
effect.
18.9. Collateral
Documents.
Each
party hereto shall make, execute and deliver such other instrument(s) or
document(s) as may be reasonably required in order to effectuate the purposes
of
this Agreement.
18.10. Non-Impairment.
This
Agreement may not be amended or supplemented at any time unless reduced to
a
writing executed by each party hereto. No amendment, supplement or termination
of this Agreement shall affect or impair any of the rights or obligations which
may have matured thereunder.
18.11. Execution.
This
Agreement may be executed in one or more counterpart(s), and each executed
counterpart(s) shall be considered by the parties as an original.
18.12. Legal
Counsel.
Executive represents to the Company that he has retained legal counsel of his
own choosing, and was given sufficient opportunity to obtain legal counsel
prior
to executing this Agreement. Executive also represents that he has read each
provision of this Agreement and understands its meaning.
18.13. Transition.
In the
event that Executive’s employment with the Company terminates, Executive shall,
through the last day of employment, and at the Company’s request, use
Executive’s reasonable best efforts (at the Company’s expense) to assist the
Company in transitioning Executive’s duties and responsibility responsibilities
to Executive’s successor and maintaining the Company’s professional relationship
with all customers, suppliers, etc. Without limiting the generality of the
foregoing, Executive shall cooperate and assist the Company, at the Company’s
direction and instruction, during the transition period between any receipt
of
or giving of notice of the termination of employment and the final day of
employment.
IN
WITNESS WHEREOF,
the
parties hereto have set their hands and seals the day and year first above
written.
|
THE
COMPANY:
DOT
VN, INC.
|
|||
|
By:
Xxxxxx Xxxxxxx
Its:
Chief Executive Officer
|
|||
10
|
EXECUTIVE
|
|||
|
Xxxxx
X. Xxxxx
|
|||
11
