EMPLOYMENT AGREEMENT
Exhibit
10.2
EMPLOYMENT AGREEMENT (this
“Agreement”),
by and between AMBICOM HOLDINGS, INC. (formerly Med Control, Inc.), a Nevada
corporation (the “Company”), and Xx. Xxxx Xxxxx
(“Executive”),
is hereby entered into as of January 15, 2009.
W I T N E
S S E T H
WHEREAS, Executive is
currently an employee of the Company;
WHEREAS, the Company desires
to continue to employ Executive in his capacity as Chief Executive Officer in
connection with the conduct of its business, and Executive desires to accept
such employment on the terms and conditions herein set forth; and
WHEREAS, the Company and
Executive desire to set forth the terms upon which Executive shall be so
employed.
NOW, THEREFORE, in
consideration of the foregoing, the mutual covenants contained herein, and other
good and valuable consideration the receipt and adequacy of which the Company
and Executive each hereby acknowledge, the parties hereto, intending legally to
be bound, agree as follows:
1.
Employment.
The
Company hereby agrees to employ Executive as its Chief Executive Officer, and
Executive hereby agrees to accept such employment and serve in such capacities,
during the Term (as defined in Section 2) and upon the terms and conditions set
forth in this Agreement.
2.
Term.
The term
of employment of Executive under this Agreement (the “Term”) shall, unless this
Agreement is terminated in accordance with Section 6 or 7, be a three-year
period initially commencing on the Effective Date. At each
anniversary of the Effective Date, the Term shall automatically be extended by
one year, unless the Company notifies the Executive in writing prior to such
anniversary (the “Termination Notice Date”) that the Term shall not be so
extended and, in such case, the Term shall terminate on the second anniversary
of such Termination Notice Date. As used herein, “Effective Date”
shall mean the closing of that certain Agreement and Plan of Share Exchange
pursuant to which, Med Control, Inc. will acquire all of the issued and
outstanding shares of capital stock of AmbiCom Acquisition Corp. from the
AmbiCom equity holders in exchange for an aggregate of 20,000,000 newly issued
shares of the Company’s Common Stock, 9,400,000 shares of the Company’s Series A
Preferred Stock and 2,600,000 shares of Series B Preferred Stock (the “Share
Exchange”). This Agreement shall become effective only when and if
the Effective Date occurs. If the Effective Date does not occur on or
before January 30, 2010, then this Agreement shall be null and
void.
3.
Offices
and Duties.
The
provisions of this Section 3 will apply during the Term:
(a) Generally. Executive
shall serve as the Chief Executive Officer of the Company. Executive
shall have and perform such duties, responsibilities and authorities as are
customary for the Chief Executive Officer of a publicly held corporation of the
size, type, and nature of the Company as they may exist from time to time and
consistent with such position and status and as the Company’s Board of Directors
(the “Board”) shall from time to time direct, but in no event shall such duties,
responsibilities, and authorities be reduced from those of Executive prior to
the Effective Date. Executive shall devote such business time and
attention as is necessary to appropriately and efficiently discharge his duties
and responsibilities as set forth herein.
(b) Place of
Employment. Executive’s principal place of employment shall be
the current corporate offices of the Company in San Jose,
California. In no event shall the Executive’s principal place of
employment be relocated to any other location without his prior written
consent.
4.
Salary
and Annual Incentive Compensation.
As
partial compensation for the services to be rendered hereunder by Executive, the
Company agrees to pay to Executive during the Term the compensation set forth in
this Section 4.
(a) Base
Salary. The Company will pay to Executive during the Term a
base salary at the initial annual rate of $240,000 payable in cash in accordance
with the Company’s usual payroll practices with respect to senior
executives. The base salary shall be determined at least annually by
the Committee (as defined herein); provided that the base salary may be
increased, but not decreased, from that in effect for the prior
year. “Committee” means the Compensation Committee of the Board, or,
if the Company does not then have a Compensation Committee, the
Board.
(b) Annual Incentive
Compensation. The Company will pay to Executive during the
Term annual cash incentive compensation, if any, in amounts determined each
calendar year by the Committee. Any such annual cash incentive
compensation payable to Executive for a calendar year shall be paid in a single
lump sum payment during the period starting on January 1, and ending on March
15, of the calendar year following the calendar year in which the annual cash
incentive compensation is earned.
5.
Long-Term
Compensation, Benefits and Expense Reimbursement.
(a) Executive Compensation
Plans. Executive shall be entitled during the Term to
participate, without discrimination or duplication, in all executive
compensation plans and programs intended for general participation by senior
executives of the Company, as presently in effect or as they may be modified or
added to by the Company from time to time, subject to the eligibility and other
requirements of such plans and programs, including, without limitation, the
Company’s 2009 Equity Incentive Plan, and any successor to such plan, any other
stock option plans, performance share plans, management incentive plans,
deferred compensation plans and supplemental retirement plans; provided, however, that such
plans and programs, in the aggregate, shall provide Executive with benefits and
compensation and incentive award opportunities substantially no less favorable
than those provided by the Company to Executive under such plans and programs as
in effect on the Effective Date.
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(b) Employee and Executive
Benefit Plans. Executive shall be entitled during the Term to
participate, without discrimination or duplication, in all employee, executive
benefit and special individual plans and programs of the Company, as presently
in effect or as they may be modified or added to by the Company from time to
time, to the extent such plans and programs are available to other senior
executives or employees of the Company, subject to the eligibility and other
requirements of such plans and programs, including, without limitation, plans
providing health and medical insurance, life insurance, disability insurance and
accidental death or dismemberment insurance, and pension or other retirement
plans, savings plans, vacation and time-off programs, profit-sharing plans,
stock purchase plans and stock ownership plans; provided, however, that such
plans and programs, in the aggregate, shall provide Executive with benefits and
compensation and incentive award opportunities substantially no less favorable
than those provided by the Company to Executive under such plans and programs as
in effect on the Effective Date.
(c) Reimbursement of
Expenses. The Company will promptly reimburse Executive for
all reasonable business expenses and disbursements incurred by Executive in the
performance of Executive’s duties during the Term within 60 days after Executive
submits reasonable evidence of such expenses and disbursements to the
Company.
(d) Funding of Rabbi
Trust. Not later than 30 days following a Change in Control:
(1) the Company shall contribute to a “rabbi trust” within the contemplation of
IRS Revenue Procedure 92-64 (which trust and its assets shall be located within
the United States) an amount equal to the amount that would be payable to the
Executive under (i), (ii), (iii), and (v) of Section 7(b) (and, if applicable,
under the last sentence of the first grammatical paragraph of Section 7(b)) upon
a Termination of Employment described in Section 7(b), and (2) the trustee of
the rabbi trust shall be irrevocably instructed to pay such amounts (plus
earnings thereon) to the Executive upon the Executive’s Termination of
Employment, if the amounts due to the Executive hereunder are not otherwise paid
to the Executive by the Company. The Company shall provide to
Executive written evidence of compliance with this Section 5(d) within two
business days after such contribution.
6.
Termination
Due to Death or Disability.
Executive’s
employment and the Term shall terminate upon Executive’s death. The
Company may terminate the employment of Executive as Chief Executive Officer due
to Disability (as defined in Section 8(c)) of Executive, effective upon the
expiration of the 30-day period set forth in Section 8(c), absent the actions
referred to therein being taken by Executive to return to service and
Executive’s presentation to the Company of a certificate of good
health.
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In the
event of Executive’s Termination of Employment due to death or Disability, all
obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease; provided, however, that the
Company will pay Executive (or, in the case of Executive’s death, his
beneficiaries or estate), and Executive (or, in the case of Executive’s death,
his beneficiaries or estate) will be entitled to receive, the
following:
(i) The
earned but unpaid portion of annual base salary;
(ii) Any
annual cash incentive cash compensation earned, but unpaid, for the calendar
year prior to the calendar year in which such Termination of Employment
occurs;
(iii) An
amount equal to the Severance Annual Incentive Amount, multiplied by a fraction,
the numerator of which is the number of days Executive was employed in the year
of termination and the denominator of which is the total number of days in the
year of termination;
(iv) All
vested, nonforfeitable amounts owing or accrued at the date of Executive’s
Termination of Employment under any compensation and benefit plans, programs and
arrangements set forth or referred to in Sections 5(a) and 5(b) in which
Executive theretofore participated, in accordance with the terms and conditions
of the plans, programs and arrangements (and agreements and documents
thereunder); and
(v) Reimbursement
of reasonable business expenses and disbursements incurred by Executive prior to
such Termination of Employment, within 60 days after Executive (or Executive’s
representative) submits reasonable evidence of such expenses and disbursements
to the Company.
The
Company shall pay the amounts under clauses (i) and (iii) in a single lump sum
payment no later than 30 days after Termination of Employment. The
Company shall pay the amount under clause (ii) in a single lump sum payment no
later than 30 days after Termination of Employment.
As used
herein, “Severance Annual Incentive Amount” means an amount equal to the average
annual cash incentive compensation paid to Executive for the Most Recent Years,
except that if Executive was not eligible to receive or did not receive such
compensation for any year in the Most Recent Years, then “Severance Annual
Incentive Amount” means the target annual cash incentive compensation for the
year of termination. As used herein, “Most Recent Years” means the
three calendar years immediately preceding the year of termination; provided, however that if, at
the time of termination Executive has not been employed by the Company for the
entire year in each of the three immediately calendar years, then “Most Recent
Years” means the immediately preceding calender year(s) (not to exceed two
years) during which Executive was employed for the entire year by the
Company.
In
addition, upon a termination of Executive’s employment due to death or
Disability, stock options then held by Executive will be exercisable to the
extent and for such periods indicated in, and otherwise be governed by, the
plans and programs (and agreements and other documents thereunder) pursuant to
which such stock options were granted. Furthermore, for the period
extending from such termination until Executive reaches age 65, Executive shall
continue to participate in all health, medical and life insurance plans,
programs and arrangements (including those self-funded by the Company) under
Section 5(b) in which Executive was participating immediately prior to
termination (“Insurance Plans”), as if Executive had continued in employment
with the Company during such period. To the extent that the Insurance
Plans do not allow such continued participation, the Company shall make cash
payments to Executive equivalent on an after-tax basis to the value of the
benefits Executive would have received under the Insurance Plans if Executive
had so continued in the employment of the Company during such period and had
continued to participate in the Insurance Plans, provided that (i) the value of
any insurance-provided benefits (including under self-funded Insurance Plans)
will be based on the premium cost to Executive, which shall not exceed the
highest risk premium charged by a carrier having an investment grade or better
credit rating, and (ii) such cash payments by the Company shall be made within
60 days after the Executive submits reasonable evidence to the Company of
Executive’s payment of such premiums.
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7.
Termination
of Employment For Reasons Other Than Death or Disability.
(a) Termination by the Company
for Cause and Termination by Executive Other Than For Good
Reason. In accordance with the provisions of this Section
7(a), the Company may terminate the employment of Executive as Chief Executive
Officer for Cause at any time prior to a Change in Control, and Executive may
terminate his employment as Chief Executive Officer voluntarily for reasons
other than Good Reason (as defined in Section 8(d)) at any time.
Upon
Termination of Employment by the Company for Cause or by the Executive for
reasons other than Good Reason, the Term will immediately terminate, and all
obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease; provided, however, that the
Company shall pay Executive, and Executive shall be entitled to receive, the
following:
(i)
The earned but unpaid portion of annual base
salary;
(ii) Any
annual cash incentive cash compensation earned, but unpaid, for the calendar
year prior to the calendar year in which occurs such Termination of
Employment;
(iii) All
vested, nonforfeitable amounts owing or accrued at the date of such Termination
of Employment under any compensation and benefit plans, programs and
arrangements set forth or referred to in Sections 5(a) and 5(b) in which
Executive theretofore participated, in accordance with the terms and conditions
of the plans, programs and arrangements (and agreements and documents
thereunder); and
(iv) Reimbursement
of reasonable business expenses and disbursements incurred by Executive prior to
such termination of employment, within 60 days after Executive submits
reasonable evidence of such expenses and disbursements to the
Company.
The
Company shall pay the amount under clause (i) or (ii) in a single lump sum
payment no later than 30 days after Termination of Employment.
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(b) Termination by the Company
Without Cause and Termination by Executive for Good Reason. In
accordance with the provisions of this Section 7(b), the Company may terminate
the employment of Executive without Cause, including after a Change in Control,
upon 90 days’ written notice to Executive, and Executive may terminate his
employment with the Company for Good Reason upon 90 days’ written notice to the
Company; provided, however, that the
Company shall have 30 days after receipt of such notice to remedy the basis for
such Good Reason. Termination of Employment by Executive shall not be
a termination for Good Reason unless such termination occurs during the two (2)
year period following the initial occurrence of one or more events constituting
a Good Reason. Notwithstanding the foregoing, the Company may
terminate Executive without Cause and without providing 90 days’ written notice
to Executive provided that the Company pays Executive the portion of his
then-current annual base salary under Section 4(a) for such 90-day period in a
single lump sum payment on 30th day
following such Termination of Employment and credits Executive with service for
such 90 days for purposes of determining amounts payable under Sections
7(b)(ii), (iii) and (v).
Upon a
Termination of Employment by the Company without Cause, or a Termination of
Employment by Executive for Good Reason, the Term will immediately terminate and
all obligations of the parties under Sections 1 through 5 of this Agreement will
immediately cease, except that the Company shall pay Executive, and Executive
shall be entitled to receive, the following (in addition to any amount payable
under the last sentence of the first grammatical paragraph of this Section
7(b)):
(i)
A cash payment in an amount equal to the product of (x) the
sum of (A) Executive’s annual base salary under Section 4(a) at the annual rate
in effect immediately prior to termination plus (B) the Severance Annual
Incentive Amount (as defined in Section 6 of this agreement), multiplied by (y)
3;
(ii) The
earned but unpaid portion of annual base salary;
(iii) Any
annual cash incentive cash compensation earned, but unpaid, for the calendar
year prior to the calendar year in which occurs such termination of
employment;
(iv) All
vested, nonforfeitable amounts owing or accrued at the date of Executive’s
Termination of Employment under any compensation and benefit plans, programs and
arrangements set forth or referred to in Sections 5(a) and 5(b) in which
Executive theretofore participated, in accordance with the terms and conditions
of the plans, programs and arrangements (and agreements and documents
thereunder) pursuant to which such compensation and benefits were
granted;
(v) An
amount equal to the Severance Annual Incentive Amount, which, unless a
termination occurs during the period beginning on the date of a Change in
Control and ending two years after a Change in Control, shall be multiplied by a
fraction, the numerator of which is the number of days Executive was employed in
the year of termination and the denominator of which is the total number of days
in the year of termination; and
(vi) Reimbursement
of reasonable business expenses and disbursements incurred by Executive prior to
such termination of employment, within 60 days after Executive submits
reasonable evidence of such expenses and disbursements to the
Company.
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The
Company shall pay the amounts under clauses (i), (iii) and (v) in a single lump
sum payment no later than 30 days after Termination of
Employment. The Company shall pay the amount under clause (ii) in a
single lump sum payment no later than 30 days after Termination of
Employment.
In
addition, upon a Termination of Employment by the Company without Cause, or
Termination of Employment by the Executive for Good Reason, stock options then
held by Executive will be exercisable to the extent and for such periods
indicated in, and otherwise be governed by, the plans and programs (and
agreements and other documents thereunder) pursuant to which such stock options
were granted. Furthermore, for a period of one (1) year after such
termination, Executive shall continue to participate in the Insurance Plans (as
defined in Section 6) as if Executive had continued in employment with the
Company during such period. To the extent that the Insurance Plans do
not allow such continued participation, the Company shall make cash payments to
Executive equivalent on an after-tax basis to the value of the benefits
Executive would have received under the Insurance Plans if Executive
had so continued in the employment of the Company during such period and had
continued to participate in the Insurance Plans, provided that (i) the value of
any insurance-provided benefits (including under self-funded Insurance Plans)
will be based on the premium cost to Executive, which shall not exceed the
highest risk premium charged by a carrier having an investment grade or better
credit rating, and (ii) such cash payments by the Company shall be made within
60 days after the Executive submits reasonable evidence to the Company of
Executive’s payment of such premiums.
8.
Definitions.
The
definitions in this Section 8 apply for purposes of this Agreement.
(a) “Cause” means
Executive’s gross misconduct (as defined below) or willful (as defined below)
and material breach of Section 10 of this Agreement. For purposes of
this definition, “gross misconduct” shall mean (A) a felony conviction in a
court of law under applicable federal or state laws which results in material
damage to the Company or its subsidiaries or materially impairs the value of the
Executive’s services to the Company, or (B) willfully engaging in one or more
material acts of misconduct, or willfully omitting to perform material duties
hereunder, which act or omission demonstrably and materially damages the
Company. For purposes of this Agreement, a “willful” act or omission
by Executive means an act or omission that is done or omitted to be done by him
not in good faith, and does not include any act or failure to act resulting from
any incapacity of Executive. Notwithstanding the foregoing, Executive
may not be terminated for Cause unless and until there shall have been delivered
to him, within six months after the Board (A) had knowledge of conduct or an
event allegedly constituting Cause and (B) had reason to believe that such
conduct or event could be grounds for Cause, a copy of a resolution duly adopted
by a majority affirmative vote of the membership of the Board (excluding
Executive) (after giving Executive reasonable notice specifying the nature of
the grounds for such termination and not less than 30 days to correct the acts
or omissions complained of, if correctable, and affording Executive the
opportunity, together with his counsel, to be heard before the Board) finding
that, in the good faith opinion of the Board, Executive was guilty of conduct
set forth above in this Section 8(a).
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(b) “Change in
Control” means the happening of any of the following
events:
(i)
An acquisition by any individual, entity or group,
within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, (a
“Person”) of beneficial ownership(within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of more than fifty percent (50%) of either (1) the then
outstanding shares of Common Stock of the Company (the “Outstanding Common
Stock”) or (2) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Voting Securities”); excluding, however, the
following: (1) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise, exchange or conversion of any Convertible
Securities unless such securities were themselves acquired directly from the
Company, (2) any acquisition by the Company; (3) any acquisition by Xx. Xxxx Xxxxx or
any of his affiliates, or (4) any acquisition by any Person pursuant to a
transaction which complies with clauses (1), (2) and (3) of subsection (iii) of
this Section 8(b); or
(ii) Within
any period of 24 consecutive months, a change in the composition of the Board
such that the individuals who, immediately prior to such period, constituted the
Board (such Board shall be hereinafter referred to as the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided,
however, for purposes hereof, that any individual who becomes a member of the
Board during such period, whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least a majority of those
individuals who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent Board; but,
provided further, that any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board shall not be so considered as a member
of the Incumbent Board; or
(iii) The
consummation of a reorganization, merger or consolidation of the Company or of
the sale or other disposition of all or substantially all of the assets of the
Company and its direct and indirect subsidiaries taken as a whole (a “Corporate
Transaction”), excluding, however, a Corporate Transaction pursuant to which (1)
all or substantially all of the individuals and entities who are the beneficial
owners, respectively, of the Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such Corporate Transaction will beneficially
own, directly or indirectly, more than sixty percent (60%) of, respectively, the
outstanding shares of common stock, and the combined voting power of the
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Corporate
Transaction (including, without limitation, an entity 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 Corporate
Transaction, of the Outstanding Common Stock and Outstanding Voting Securities,
as the case may be, (2) no Person (other than the Company) will beneficially
own, directly or indirectly, more than twenty-five
percent (25%) of, respectively, the outstanding shares of common stock of the
entity resulting from such Corporate Transaction or the combined voting power of
the outstanding voting securities of such entity entitled to vote generally in
the election of directors, except to the extent that such ownership existed with
respect to the Company prior to the Corporate Transaction, and (3) individuals
who were members of the Board immediately prior to the approval by the
stockholders of the Company of such Corporate Transaction will constitute at
least a majority of the members of the board of directors of the entity
resulting from such Corporate Transaction; or
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(iv) The
approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company, other than to an entity pursuant to a transaction
which would comply with clauses (1), (2) and (3) of subsection (iii) of this
Section 8(b), assuming for this purpose that such transaction were a Corporate
Transaction.
For
purposes this definition of “Change of Control”, a series of transactions with a
common purpose shall be treated as a single transaction that begins on the date
of the first transaction in the series and ends on the date of the last
transaction in the series.
(c) “Convertible
Security” means any security convertible into or exchangeable
for shares of common stock of the Company, or any option, warrant or other right
to acquire shares of common stock of the Company.
(d) “Disability” means
the failure of Executive to render and perform the services required of him
under this Agreement, for a total of 180 days of more during any consecutive 12
month period, because of any physical or mental incapacity or disability as
determined by a physician or physicians selected by the Company and reasonably
acceptable to Executive, unless, within 30 days after Executive has received
written notice from the Company of a proposed termination due to such absence,
Executive shall have returned to the full performance of his duties hereunder
and a physician or physicians (selected by the Executive and reasonably
acceptable to the Company) shall have determined that Executive’s health permits
him to handle the full performance of such duties.
(e) “Good
Reason” means, without Executive’s prior written consent, (A)
a material diminution in Executive’s authority, duties or responsibilities as
set forth in Section 3(a), (B) a change in the Company’s reporting structure
whereby Executive is no longer reporting to the Company’s Board of Directors,
(C) a material reduction by the Company in Executive’s annual base compensation
as set forth in Section 4(a) (in which event, the Executive’s annual base
compensation in effect prior to such reduction shall be treated, for purposes of
calculating amounts payable under Sections 6 and 7, as the annual base
compensation in effect immediately prior to termination), (D) any material
breach of this Agreement by the Company, and (E) a relocation of Executive to an
office that is more than 35 miles from the latest location of Executive’s office
prior to the date of a Change in Control.
(f) “Termination of
Employment” means Executive’s termination of employment from
the Company which constitutes a “separation from service”, as such term is
defined under Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”).
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9.
Excise
Tax Gross-Up.
If it
shall be determined that any payment or benefit received or to be received by
Executive under this Agreement or any other plan, arrangement or agreement of
the Company (all such payments and benefits a “Payment”), would be subject to
the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the
Company shall pay to Executive an additional payment (a “Gross-Up Payment”) in
an amount necessary to reimburse Executive, on an after-tax basis, for the
Excise Tax and for any federal, state and local income tax and excise tax
(including any interest and penalties imposed with respect to such taxes) that
may be imposed by reason of the Payment. For purposes of determining
the amount of any Gross-Up Payment, Executive shall be deemed to pay federal,
state and local income taxes at the highest applicable marginal rate of taxation
in the calendar year in which the Gross-Up Payment is to be made. All
determinations required to be made under this Section 9, including whether a
Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be
made by a nationally known independent accounting firm regularly retained by the
Company (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and Executive within 15 business days of the
request for such determination. Such request may be made by either
party. The Company shall pay the fees and expenses of the Accounting
Firm in connection with any determinations hereunder. Any Gross-Up
Payment shall be paid by the Company to Executive within 10 days of the
Accounting Firm’s determination of the amount thereof
10. Executive
Covenants.
(a) Executive’s
Acknowledgment. Executive agrees and acknowledges that in
order to assure the Company that the Company will retain its value as a going
concern, it is necessary that Executive undertake not to utilize his special
knowledge of the Company’s business and his relationships with customers and
suppliers to compete with the Company. Executive further acknowledges
that:
(i)
Executive is one of a limited number of persons who has developed
the Company’s business;
(ii) Executive
has occupied a position of trust and confidence with the Company prior to the
date of this Agreement and, during such period and Employee’s employment under
this Agreement, Employee has acquired and will acquire an intimate knowledge of
proprietary and confidential information concerning the Company and its
business;
(iii) the
agreements and covenants contained in Sections 10(b), (c), (d), (e), (f) and (g)
are essential to protect the Company and the goodwill of its
business;
(iv) Executive’s
employment with the Company has special, unique and extraordinary value to the
Company, and the Company would be irreparably damaged if Executive were to
provide services to any person or entity or otherwise act in violation of the
provisions of this Agreement;
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(v) the
scope and duration of the restrictive covenants in Section 10(b) are reasonably
designed to protect a protected interest of the Company and are not excessive in
light of the circumstances; and
(vi) Executive
has a means to support himself and his dependents other than by engaging in
conduct prohibited by the restrictive covenants in Section 10(b), and the
provisions of Sections 10(b) will not impair such ability.
(b) Non-Competition;
Non-Solicitation; Non-Interference. During the Term and for a
period of two years after the termination of Executive’s employment hereunder,
Executive will not by himself or in conjunction with others, directly or
indirectly engage (either as owner, investor, partner, member stockholder,
employer, employee, consultant, advisor, manager or director) in any business in
the United States which, at the time of such termination, is directly or
indirectly in competition with a business then conducted by the Company or any
of its subsidiaries;
provided,
however, this the limitation shall not apply if Executive’s employment is
terminated as a result of a termination by the Company without Cause or a
termination by Executive for Good Reason. During the Term and for a
period of three years after the termination of Executive’s employment hereunder,
Executive will not by himself or in conjunction with others, directly or
indirectly (i) induce any customers of the Company or any of its subsidiaries
with whom Executive has had personal contacts or relationships, during and
within the scope of his employment with the Company, to curtail or cancel their
relationship with the Company or its subsidiaries; or (ii) induce, or attempt to
influence, any employee of the Company or any of its subsidiaries to terminate
their employment therewith. The provisions of the first sentence of
this Section 10(b) and clauses (i) and (ii) of the immediately preceding
sentence are separate and distinct commitments independent of each
other. It is agreed that the ownership of not more than one percent
of the equity securities of any company having securities listed on an exchange
or regularly traded in an over-the-counter market shall not, of itself, be
deemed inconsistent with the first sentence of this Section 10(b).
(c) Non-Disclosure. Executive
shall not, at any time during the Term and thereafter (including following
Executive’s termination of employment for any reason), disclose, use, transfer
or sell, except in the course of employment with, or providing other service to,
the Company, any confidential or proprietary information of the Company and its
subsidiaries so long as such information has not otherwise been publicly
disclosed or is not otherwise in the public domain, except as required by law or
pursuant to legal process.
(d) Return of Company Materials
Upon Termination. Executive acknowledges that all records and
documents containing confidential or proprietary information of the Company or
its subsidiaries prepared by Executive or coming into his possession by virtue
of his employment by the Company are and will remain the property of the Company
and its subsidiaries. Upon termination of his employment with the
Company, Executive shall immediately return to the Company all such items and
all copies of such items, in his possession.
(e) Cooperation With Regard to
Litigation. Executive agrees to cooperate with the Company,
during the Term and thereafter (including following Executive’s termination of
employment for any reason), by making himself available to testify on behalf of
the Company or any subsidiary or affiliate of the Company, in any action, suit
or proceeding, whether civil, criminal, administrative or investigative, and to
assist the Company, or any subsidiary or affiliate of the Company, in any such
action, suit or proceeding, by providing information and meeting and consulting
with the Board or its representatives or counsel, or representatives or counsel
to the Company or any subsidiary or affiliate of the Company, as reasonably
requested and at a time mutually convenient to Executive and the
Company. The Company agrees to reimburse the Executive, on an
after-tax basis, for all expenses actually incurred in connection with his
provision of testimony or assistance.
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(f)
Non-Disparagement. Executive
shall not, at any time during the Term and thereafter, make statements or
representations, or otherwise communicate, directly or indirectly, in writing,
orally or otherwise, or take any action which may, directly or indirectly,
disparage or be damaging to the Company or any of its subsidiaries or affiliates
or their respective officers, directors, employees, advisors, businesses or
reputations. Notwithstanding the foregoing, nothing in this Agreement
shall preclude Executive from making truthful statements or disclosures that are
required by applicable law, regulation or legal process.
(g) Inventions. Executive
acknowledges that all inventions, innovations, discoveries, improvements,
developments, methods, know-how, designs, analyses, drawings, reports and all
similar or related information (whether or not patentable) which (i) relate to
the then current business or any anticipated business of the Company, the
Company’s research and development or the Company’s existing or future services
or products and (ii) which are conceived, developed or made by Executive during
and in the scope of his employment by the Company (“Work Product”) belong to the
Company. Executive shall promptly disclose such Work Product to the
Company and perform all actions reasonably requested by the Company (whether
during or after his period of employment with the Company) to establish and
confirm such ownership (including the execution of assignments, consents, powers
of attorney and other instruments).
(h) Remedies. Executive
acknowledges that the agreements and covenants in Sections 10(b), (c), (d), (e)
and (f) are reasonable and necessary for the protection of the Company’s
business interests, that in the event of any actual or threatened violation of
the covenants contained in Sections 10(b), (c), (d), (e) and (f), the Company
will suffer irreparable injury, Company’s damages will be difficult to ascertain
and the Company’s remedy at law will be inadequate. Employee
accordingly agrees that, subject to applicable law, in the event of any actual
or threatened breach by him of any of the covenants set forth in Sections 10(b),
(c), (d), (e) and (f), the Company shall be entitled to injunctive and other
equitable relief, including immediate temporary injunctive and other equitable
relief. Nothing contained herein shall be construed as prohibiting
the Company from pursuing any other remedies available to it for such breach or
threatened breach, including the recovery of any damages which it is able to
prove.
(i)
Survival. The
provisions of this Section 10 shall survive the termination or expiration of
this Agreement in accordance with the terms hereof.
11. Governing
Law; Disputes; Arbitration.
(a) Governing
Law. This Agreement is governed by and is to be construed,
administered and enforced in accordance with the laws of the State of Nevada,
without regard to Nevada conflicts of law principles, except insofar as the
Nevada Revised Statutes and federal laws and regulations may be
applicable. If, under the governing law, any portion of this
Agreement is at any time deemed to be in conflict with any applicable statute,
rule, regulation, ordinance or other principle of law, such portion shall be
deemed to be modified or altered to the extent necessary to conform thereto or,
if that is not possible, to be omitted from this Agreement. The
invalidity of any such portion shall not affect the force, effect, and validity
of the remaining portion hereof. If any court determines that any
provision of Section 10 is unenforceable because of the duration or geographic
scope of such provision, it is the parties’ intent that such court shall have
the power to modify the duration or geographic scope of such provision, as the
case may be, to the extent necessary to render the provision enforceable, and,
in its modified form, such provision shall be enforced.
12
(b) Reimbursement of Expenses in
Enforcing Rights. All reasonable costs and expenses (including
reasonable fees and disbursements of counsel) incurred by Executive during the
Term and thereafter (including following Executive’s termination of employment
for any reason) in seeking to interpret this Agreement or enforce rights
pursuant to this Agreement shall be paid on behalf of or reimbursed to Executive
promptly by the Company, whether or not Executive is successful in asserting
such rights; provided, however, that no
reimbursement shall be made of such expenses relating to any unsuccessful
assertion of rights if and to the extent that Executive’s assertion of such
rights was in bad faith or frivolous, as determined by independent counsel
mutually acceptable to the Executive and the Company.
(c) Arbitration. Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by binding arbitration in San Jose, California by a panel
of three arbitrators in accordance with the rules of the American Arbitration
Association in effect at the time of submission to
arbitration. Judgment may be entered on the arbitrators’ award in any
court having jurisdiction. For purposes of entering any judgment upon
an award rendered by the arbitrators, the Company and Executive hereby consent
to the jurisdiction of any or all of the following courts: (i) the United States
District Court for the Northern District of California, (ii) any of the courts
of the State of California, or (iii) any other court having
jurisdiction. The Company and Executive further agree that any
service of process or notice requirements in any such proceeding shall be
satisfied if the rules of such court relating thereto have been substantially
satisfied. The Company and Executive hereby waive, to the fullest
extent permitted by applicable law, any objection which they may now or
hereafter have to such jurisdiction and any defense of inconvenient
forum. The Company and Executive hereby agree that a judgment upon an
award rendered by the arbitrators may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law. Subject to Section
11(b), the Company shall bear all costs and expenses arising in connection with
any arbitration proceeding pursuant to this Section
11. Notwithstanding any provision in this Section 11, Executive shall
be entitled to seek (in the arbitration proceeding or in any court proceeding)
specific performance of Executive’s right to be paid during the pendency of any
dispute or controversy arising under or in connection with this
Agreement.
(d) Interest on Unpaid
Amounts. Any amounts that have become payable pursuant to the
terms of this Agreement or any decision by arbitrators or judgment by a court of
law pursuant to this Section 11 but which are not timely paid shall bear
interest at the prime rate in effect at the time such payment first becomes
payable, as quoted in The Wall Street Journal. Any interest payable
under this Section 11(d) shall be paid on the same date as the amounts to which
such interest relates are actually paid.
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12. Miscellaneous.
(a) General. This
Agreement cancels and supersedes any and all prior agreements and understandings
between the parties hereto with respect to the employment of Executive by the
Company and its subsidiaries. This Agreement constitutes the entire
agreement among the parties with respect to the matters herein provided, and no
modification or waiver of any provision hereof shall be effective unless in
writing and signed by the parties hereto. Executive shall not be
entitled to any payment or benefit under this Agreement which duplicates a
payment or benefit received or receivable by Executive under such prior
agreements and understandings or under any benefit or compensation plan of the
Company. As used in this Agreement: (1) the terms “including”,
“includes” and words of like import shall be construed broadly as if followed by
“without limitation”; and (2) the terms “herein”, “hereof” and “hereunder” refer
to this Agreement as a whole, not just the particular section where such term
appears.
(b) Non-Transferability. Neither
this Agreement nor the rights or obligations hereunder of the parties hereto
shall be transferable or assignable by Executive, except in accordance with the
laws of descent and distribution or as specified in Section
12(c). The Company may assign this Agreement and the Company’s rights
and obligations hereunder, and shall assign this Agreement, to any Successor (as
hereinafter defined) which, by operation of law or otherwise, continues to carry
on substantially the business of the Company prior to the event of succession,
and the Company shall, as a condition of the succession, require such Successor
to assume in writing the Company’s obligations under (and agree in writing to be
bound by) this Agreement. For purposes of this Agreement, “Successor”
shall mean any person that succeeds to, or has the practical ability to control
(either immediately or with the passage of time), the Company’s business
directly, by merger or consolidation, or indirectly, by purchase of the
Company’s voting securities or all or substantially all of its assets, or
otherwise.
(c) Beneficiaries. Executive
shall be entitled to designate (and change, to the extent permitted under
applicable law) a beneficiary or beneficiaries to receive any compensation or
benefits payable hereunder following Executive’s death.
(d) Notices. Whenever
under this Agreement it becomes necessary to give notice, such notice shall be
in writing, signed by the party or parties giving or making the same, and shall
be deemed to have been duly given (i) upon actual receipt (or refusal of
receipt) if delivered personally; (ii) three business days following deposit, if
sent by certified or registered mail, return receipt requested, postage prepaid;
(iii) one business day following deposit with a documented overnight delivery
service or (iv) upon transmission, if sent by facsimile (with confirmation
receipt and followed by a copy sent by regular mail), in each case to the
appropriate address or number as set forth below or at such other address as may
be designated by such party by like notice:
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If to the
Company:
AmbiCom
Holdings, Inc.
000 Xxxxx
Xxxx Xxxxxxx
Xxx Xxxx,
XX 00000-0000
Telephone:
(000) 000-0000
Attention:
Chairman
If to
Executive:
AmbiCom
Acquisition Corp.
000 Xxxxx
Xxxx Xxxxxxx
Xxx Xxxx,
XX 00000-0000
Telephone:
(000) 000-0000 xxx 000
Cell
Phone: (000) 000-0000
Email:
Xxxx_Xxxxx@xxxxxxx.xxx
Attention:
Xxxx Xxxxx, President
(e) Reformation. The
invalidity of any portion of this Agreement shall not be deemed to render the
remainder of this Agreement invalid.
(f)
Headings. The
headings of this Agreement are for convenience of reference only and do not
constitute a part hereof.
(g) No General
Waivers. The failure of any party at any time to require
performance by any other party of any provision hereof or to resort to any
remedy provided herein or at law or in equity shall in no way affect the right
of such party to require such performance or to resort to such remedy at any
time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such
provisions. No such waiver shall be effective unless in writing and
signed by the party against whom such waiver is sought to be
enforced.
(h)
No Obligation To
Mitigate. Executive shall not be required to seek other
employment or otherwise to mitigate Executive’s damages upon any termination of
employment; provided, however, that, to the
extent Executive receives from a subsequent employer health or other insurance
benefits that are substantially similar to the benefits referred to in Section
5(c) hereof, any such benefits to be provided by the Company to Executive
following the Term shall be correspondingly reduced.
(i) Offsets;
Withholding. The amounts required to be paid by the Company to
Executive pursuant to this Agreement shall not be subject to offset. The
foregoing and other provisions of this Agreement notwithstanding, all payments
to be made to Executive under this Agreement, including under Sections 6 and 7,
or otherwise by the Company will be subject to required withholding taxes and
other required deductions.
(j)
Successors
and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of Executive, his heirs, executors, administrators and
beneficiaries, and shall be binding upon and inure to the benefit of the Company
and its successors and assigns.
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(k) Reimbursement of Expenses,
Certain Other Payments. Notwithstanding any provision to the
contrary herein:
(i)
any payment to Executive for reimbursement of expenses or disbursements pursuant
to this Agreement (including pursuant to Section 5(c), Section 10(e), Section
11(b), clause (v) of Section 6, clause (iv) of Section 7(a) or clause (vi) of
Section 7(b)), any payment on Executive’s behalf pursuant to Section 11(b), and
any payment pursuant to Section 9 or the last grammatical paragraph of Sections
6 and 7(b), shall be made no later than the end of the Executive’s taxable year
following the taxable year in which such expenses and disbursements (including
insurance premiums contemplated by Sections 6 and 7(b)) are
incurred;
(ii) any
such amount paid during one taxable year shall not affect any such amount
payable the Company during a subsequent taxable year; and
(iii) the
right to such payment may not be exchanged or substituted for other forms of
compensation to Executive.
(l)
Section
409A. The parties intend that the payments and benefits under this
Agreement are either exempt from Section 409A of the Code or fully comply with
the payout and other limitations and restrictions imposed under Section 409A of
the Code. In this connection, the payout timing provisions and any
other terms of this Agreement shall be interpreted to be exempt from Section
409A of the Code or comply with the payout and other limitations and
restrictions imposed under Section 409A of the Code, to the extent necessary to
avoid the penalties otherwise imposed under Section 409A of the
Code. The Company and Executive agree to make in good faith such
changes to this Agreement, without changing the basic economics of this
Agreement, as are necessary to avoid penalties imposed under Section 409A of the
Code.
13. Income
Tax Treatment.
Executive
and the Company acknowledge that it is the intention of the Company to
deduct all amounts paid by the Company to Executive pursuant to this Agreement,
including under Sections 6 and 7 as ordinary and necessary business expenses for
income tax purposes. Executive agrees and represents that he will
treat all such amounts as ordinary income for income tax purposes, and should he
report such amounts as other than ordinary income for income tax purposes, he
willindemnify and hold the Company harmless from and against any and all taxes,
penalties, interest, costs and expenses, including reasonable attorneys’ and
accounting fees and costs, which are incurred by Company directly or indirectly
as a result thereof.
14. Key Man
Life Insurance.
If the
Company, in its sole discretion, desires to procure “key man” insurance covering
the life of Executive, Executive shall cooperate with the Company in procuring
such insurance and shall, at the request of the Company, submit to such medical
examinations, supply such information and execute such documents as may be
required by the insurance company to which the Company has applied for
insurance. Executive shall use his reasonable efforts to qualify for
the standard premium category of such insurance company. Executive
shall have no interest whatsoever in any “key man” insurance policy procured by
the Company.
[Signature
page follows this page.]
16
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written.
MED
CONTROL, INC.
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By:
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Name:
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Title:
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EXECUTIVE
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Xx.
Xxxx Xxxxx
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