AT-WILL EMPLOYMENT, CONFIDENTIAL INFORMATION, NON-COMPETE/ NON-SOLICITATION, INVENTION ASSIGNMENT, AND ARBITRATION AGREEMENT
CONFIDENTIAL
Exhibit 10.1
AT-WILL EMPLOYMENT, CONFIDENTIAL INFORMATION, NON-COMPETE/
NON-SOLICITATION, INVENTION ASSIGNMENT,
AND ARBITRATION AGREEMENT
As a
condition of employment with Wrap Technologies, Inc. (the
"Company"), and in consideration of continued employment with the
Company as well as the compensation set forth in Section 7.E of
this Agreement, Xxxxxx Xxxxx (the “Employee”) and the
Company agree to the following provisions of this At-Will
Employment, Confidential Information, Non-Compete/Non-Solicitation,
Invention Assignment, and Arbitration Agreement (this
"Agreement"):
1.
At-Will Employment
EMPLOYEE
UNDERSTANDS AND ACKNOWLEDGES THAT HIS EMPLOYMENT WITH THE COMPANY
IS FOR NO SPECIFIED TERM AND CONSTITUTES "AT-WILL" EMPLOYMENT. HE
ALSO UNDERSTANDS THAT ANY REPRESENTATION TO THE CONTRARY IS
UNAUTHORIZED AND NOT VALID UNLESS IN WRITING AND SIGNED BY THE
EXECUTIVE CHAIRMAN OR CHIEF EXECUTIVE OFFICER OF THE COMPANY OR
OTHER PERSON AUTHORIZED BY THE BOARD OF DIRECTORS. ACCORDINGLY,
EMPLOYEE ACKNOWLEDGES THAT HIS EMPLOYMENT RELATIONSHIP MAY BE
TERMINATED AT ANY TIME, WITH OR WITHOUT GOOD CAUSE OR FOR ANY OR NO
CAUSE, AT HIS OPTION OR AT THE OPTION OF THE COMPANY, WITH OR
WITHOUT NOTICE. EMPLOYEE FURTHER ACKNOWLEDGES THAT THE COMPANY MAY
MODIFY HIS JOB TITLE, SALARY, AND BENEFIT FROM TIME TO TIME AS
COMPANY DEEMS NECESSARY.
2.
Confidentiality
A.
Definition of Company Confidential
Information. The Employee understands that "Company
Confidential Information" means information (including any and all
combinations of individual items of information) that the Company
has or will develop, acquire, create, compile, discover or own,
that has value in or to the Company's business which is not
generally known and which the Company wishes to maintain as
confidential. Company Confidential Information includes both
information disclosed by the Company to the Employee, and
information developed or learned by him during the course of his
employment with the Company. Company Confidential Information also
includes all information of which the unauthorized disclosure could
be detrimental to the interests of the Company, whether or not such
information is identified as Company Confidential Information. By
example, and without limitation, Company Confidential Information
is any and all nonpublic information that relates to the
actual or anticipated business and/or products, research or
development of the Company, or to the Company's technical data,
trade secrets, or know-how, including, but not limited to,
research, product plans, or other information regarding the
Company's products or services and markets therefor, internal
customer lists, software, developments, inventions, discoveries,
ideas, processes, formulas, technology, designs, drawings,
engineering, hardware configuration information, marketing,
finances, and other business information disclosed by the Company
either directly or indirectly in writing, orally or by drawings or
inspection of premises, parts, equipment, or other Company
property. Notwithstanding the foregoing, Company Confidential
Information shall not include any such information which ·the
Employee can establish (i) was publicly known or made generally
available prior to the time of disclosure by the Company to him; or
(ii) becomes publicly known or made generally available after
disclosure by the Company to Employee through no wrongful action or
omission by him. Employee understands and agrees that the terms of
this Agreement are Company Confidential information, any may be
disclosed only to Employee’s spouse, legal advisor, or tax
professionals, subject to Section 11, below.
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B.
Nonuse and Nondisclosure. Employee
agrees that during and after his employment with the Company, he
shall hold in the strictest confidence and take all reasonable
precautions to prevent any unauthorized use or disclosure of
Company Confidential Information. The Employee will not (i) use
Company Confidential Information for any purpose whatsoever other
than for the benefit of the Company in the course of his
employment, or (ii) disclose Company Confidential Information to
any third party without the prior written authorization of a named
Officer of the Company. Prior to disclosure, when compelled by
applicable law, the Employee will provide prior written notice to
the Executive Chairman, CEO, and General Counsel of the Company (as
applicable). The Employee agrees that he obtains no title to any
Company Confidential Information, and that the Company retains all
Confidential Information as the sole property of the Company. The
Employee understands that his obligations under this Section 2.B
shall continue after termination of his employment and also that
nothing in this Agreement prevents him from engaging in protected
activity, as described in Section 11 below.
C.
Former Employer Confidential
Information. The Employee agrees that during his employment
with the Company, he shall not improperly use, disclose, or induce
the Company to use any proprietary information or trade secrets of
any former employer or other person or entity with which he has an
obligation to keep such proprietary information or trade secrets in
confidence.
D.
Third Party Information. The Employee
recognizes that if the Company receives confidential or proprietary
information from third parties, he will treat that information as
Confidential Information subject to Section 2.B,
above.
3.
Ownership
A.
Assignment of Inventions. As between
the Company and himself, the Employee agrees that all right, title,
and interest in and to any and all copyrightable material, notes,
records, drawings, designs, logos, inventions, improvements,
developments, discoveries, ideas and trade secrets conceived,
discovered, authored, invented, developed or reduced to practice by
him, solely or in collaboration with others, during the period of
time that he is in the employ of the Company and within the course
of his employment, or with the use of Company's equipment,
supplies, facilities, or Company Confidential Information, and any
copyrights, patents, trade secrets, mask work rights or other
intellectual property rights relating to the foregoing, except as
provided in Section 3.B below (collectively, "Inventions"), are the
sole property of the Company. The Employee also agrees to promptly
make full written disclosure to the Company of any Inventions, and
to deliver and assign and hereby irrevocably assign fully to the
Company all of his right, title and interest in and to Inventions.
The Employee agrees that this assignment includes a present
conveyance to the Company of ownership of Inventions that are not
yet in existence. The Employee further acknowledges that all
original works of authorship that are made by him (solely or
jointly with others) within the scope of and during the period of
his employment with the Company and that are protectable by
copyright are "works made for hire," as that term is defined in the
United States Copyright Act. The Employee understands and agrees
that the decision whether or not to commercialize or market any
Inventions is within the Company's sole discretion and for the
Company's sole benefit, and that no royalty or other consideration
will be due to him as a result of the Company's efforts to
commercialize or market any such Inventions.
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B.
Exception to Assignments. The
provisions of this Agreement requiring assignment of Inventions to
the Company do not apply to any Invention that the Employee has
independently developed entirely on his own time without using the
Company's equipment, supplies, facilities, trade secret information
or Confidential Information ("Other Invention"), except that "Other
Invention" does not include, and the provisions of this Agreement
requiring assignment of Inventions to the Company do apply to,
Inventions that either (i) relate at the time of conception or
reduction to practice of such Other Invention to the Company's
business, or actual or demonstrably anticipated research or
development of the Company or (ii) result from any work that the
Employee performed for the Company. The Employee will advise the
Company promptly in writing of any Invention that he believes
constitutes an Other Invention. The Employee agrees that he shall
not incorporate, or permit to be incorporated, any Other Invention
without the Company's prior written consent. Notwithstanding the
foregoing sentence, if, in the course of his employment with the
Company, he incorporates into a Company product, process or service
an Other Invention owned by him or in which he has an interest, the
Employee hereby grants to the Company a nonexclusive, royalty-free,
perpetual, irrevocable, transferable worldwide license (with the
right to grant and authorize sublicenses) to make, have made, use,
import, offer for sale, sell, reproduce, distribute, modify, adapt,
prepare derivative works of, display, perform, and otherwise
exploit such incorporated or utilized Other Inventions, without
restriction, including, without limitation, as part of or in
connection with such Invention, and to practice any method related
thereto.
C.
Inventions Retained and Licensed. The
Employee will inform the Company, in writing, before incorporating
any inventions, discoveries, ideas, original works of authorship,
developments, improvements, trade secrets and other proprietary
information or intellectual property rights owned by him or in
which he has an interest prior to his employment with the Company
("Prior Inventions") into any Invention or otherwise utilizing any
Prior Invention in the course of his employment with the Company;
and the Company is hereby granted a nonexclusive, royalty-free,
perpetual, irrevocable, transferable worldwide license (with the
right to grant and authorize sublicenses) to make, have made, use,
import, offer for sale, sell, reproduce, distribute, modify, adapt,
prepare derivative works of, display, perform, and otherwise
exploit such incorporated or utilized Prior Inventions, without
restriction, including, without limitation, as part of or in
connection with such Invention, and to practice any method related
thereto. The Employee will not incorporate any inventions,
discoveries, ideas, original works of authorship, developments,
improvements, trade secrets and other proprietary information or
intellectual property rights owned by any third party into any
Invention without the Company's prior written permission. The
Employee executes the list describing all Prior Inventions that
relate to the Company's current or anticipated business, products,
or research and development or, if no such list is attached, he
represents and warrants that there are no such Prior Inventions
hereto as Exhibit
A. Furthermore, the Employee represents and warrants that if
any Prior Inventions are included on Exhibit A, they shall not
materially affect his ability to perform all obligations under this
Agreement.
D.
Moral Rights. Any assignment to the
Company of Inventions includes all rights of attribution,
paternity, integrity, modification, disclosure and withdrawal, and
any other rights throughout the world that may be known as or
referred to as "moral rights," "artist's rights," "droit moral," or
the like (collectively, "Moral Rights"). To the extent that Moral
Rights cannot be assigned under applicable law, the Employee hereby
waives and agrees not to enforce any and all Moral Rights,
including, without limitation, any limitation on subsequent
modification, to the extent permitted under applicable
law.
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E.
Maintenance of Records. The Employee
agrees to keep and maintain adequate, current, accurate, and
authentic written records of all Inventions made by him (solely or
jointly with others) during his employment with the Company. The
records will be in the form of notes, sketches, drawings,
electronic files, reports, or any other format that may be
specified by the Company. As between the Company and Employee, the
records are and will be available to and remain the sole property
of the Company at all times.
F.
Further Assurances. The Employee agrees
to assist the Company, or its designee, at the Company's expense,
in every proper way to secure the Company's rights in the
Inventions in any and all countries, including the disclosure to
the Company of all pertinent information and data with respect
thereto, the execution of all applications, specifications, oaths,
assignments, and all other instruments that the Company shall deem
proper or necessary in order to apply for, register, obtain,
maintain, defend, and enforce such rights, and in order to deliver,
assign and convey to the Company, its successors, assigns, and
nominees the sole and exclusive rights, title, and interest in and
to all Inventions, and testifying in a suit or other proceeding
relating to such Inventions. The Employee further agrees that his
obligations under this Section 3.F will continue after the
termination of this Agreement.
G.
Attorney-in-Fact. The Employee agrees
that, if the Company is unable because of his unavailability,
mental or physical incapacity, or for any other reason to secure
his signature with respect to any Inventions, including, without
limitation, for the purpose of applying for or pursuing any
application for any United States or foreign patents or mask work
or copyright registrations covering the Inventions assigned to the
Company in Section 3.A, then he hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents as
his agent and attorney-in-fact, to act for and on my behalf to
execute and file any papers and oaths, and to do all other lawfully
permitted acts with respect to such Inventions to further the
prosecution and issuance of patents, copyright and mask work
registrations with the same legal force and effect as if executed
by the Employee. This power of attorney shall be deemed coupled
with an interest, and shall be irrevocable.
4. Conflicting
Obligations
A.
Current Obligations. The Employee
agrees that during his with the Company, he shall not engage in or
undertake any other employment, occupation, consulting
relationship, or commitment that is directly related to the
business in which the Company is now involved or becomes involved
or has plans to become involved, nor will he engage in any other
activities that conflict with his obligations to the
Company.
B.
Prior Relationships. The Employee
represents and warrants that he has no other agreements,
relationships, or commitments to any other person or entity that
conflict with the provisions of this Agreement, his obligations to
the Company under this Agreement, or his ability to become employed
and perform the services for which he is being employed by the
Company. Moreover, the Employee agrees to fully indemnify the
Company, its directors, officers, agents, employees, investors,
shareholders, administrators, affiliates, divisions, subsidiaries,
predecessor and successor corporations, and assigns for all
verdicts, judgments, settlements, and other losses incurred by any
of them resulting from his breach of his obligations under any
agreement with a third party to which he is a party or obligation
to which he is bound, as well as any reasonable attorneys' fees and
costs if the plaintiff is the prevailing party in such an action,
except as prohibited by law.
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CONFIDENTIAL
5.
Return of Company Materials
The
Employee agrees that, at the time of leaving the employ of the
Company, he will deliver to the Company (and will not keep in my
possession, recreate or deliver to anyone else) any and all
devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings blueprints, sketches,
materials, equipment, other documents or property, or reproductions
of any aforementioned items developed by him pursuant to his
employment with the Company or otherwise belonging to the Company,
its successors or assigns. Upon separation from employment with the
Company, the Employee agrees to immediately sign and deliver to the
Company a Certification that he has returned, or has made
arrangements with the Company to return, all Company
materials.
6.
Notification of New Employer
Employee grants
Company consent to notify Employee’s new employer(s) about
Employee’s obligations under this Agreement if either party
terminates this Agreement.
7. Covenant Not
To Compete And Solicitation Restrictions
A.
Covenant Not to Compete. The Employee
agrees that during the course of his employment and for a period of
twelve (12) months immediately following the termination of his
relationship with the Company for any reason, whether with or
without cause, at the option either of the Company or himself, with
or without notice, he shall not, without the prior written consent
of the Company actively compete against the Company. This includes
that he shall not compete through maintaining an employment,
contractual, or other business relationship, either directly or
indirectly, to provide services or products competitive to those in
which the Company was engaged, or planned to engage, at the
termination of his employment. This restriction covers the
Employee’s activities in every part of the Territory. For
purposes of this Agreement, "Territory" shall mean: all states of
the United States of America in which the Company provided goods or
services, had customers, or otherwise conducted business at any
time during the two-year period prior to the date of the
termination of my relationship with the Company; and (iii) any
other countries in which the Company maintains non-trivial
operations or facilities, provided goods or services, had
customers, or otherwise conducted business at any time during the
two-year period prior to the date of the termination of his
relationship with the Company. Notwithstanding the foregoing, this
restriction does not prohibit the Employee from owning securities
of corporations listed on a national securities exchange or
regularly traded by national securities dealers. The twelve (12)
month period may be modified as set forth in Section 7.D
below.
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CONFIDENTIAL
B.
No Solicitation.
(1)
Non-Solicitation of Customers. The
Employee agrees that for a period of twelve (12) months immediately
following the termination of his relationship with the Company for
any reason, whether with or without cause, at the option either of
the Company or himself, with or without notice, he shall not
contact, or cause to be contacted with any Customer for the
purposes of conducting business that is competitive to that of the
Company or for the purpose of disadvantaging the Company's business
in any way. For purposes of this Agreement, "Customer" shall mean
all persons or entities that have used or inquired of the Company's
services at any time during the two-year period preceding the
termination of my employment with the Company. The Company and
Employee may agree to craft a mutually-acceptable announcement
regarding his employment termination. The twelve (12) month period
may be modified as set forth in Section 7.D below.
(2)
Non-Solicitation of Employees and
Others. The Employee agrees that for a period of twelve (12)
months immediately following the termination of his relationship
with the Company for any reason, whether with or without cause, at
the option either of the Company or himself, with or without notice
he will not directly or indirectly recruit or solicit any employee
of the Company to leave their employment with the Company, nor will
he contact any supplier, vendor or contractor who conducted
business with the Company at any time during the two-year period
preceding the termination of my employment with the Company, to
terminate or adversely modify any business relationship with the
Company or not to proceed with, or enter into, any business
relationship with the Company, nor shall he otherwise interfere
with any business relationship between the Company and any such
franchisee, joint venture, supplier, vendor or contractor. The
twelve (12) month period may be modified as set forth in Section
7.D below.
C.
Acknowledgements. The Employee
acknowledges that he shall derive significant value from the
Company's agreement to provide him with Company Confidential
Information to enable him to optimize the performance of his duties
to the Company. The Employee further acknowledges that his
fulfillment of the obligations contained in this Agreement,
including, but not limited to, his obligation neither to disclose
nor to use Company Confidential Information other than for the
Company's exclusive benefit and his obligations not to compete and
not to solicit contained in subsections (A) and (B) above, is
necessary to protect Company Confidential Information and,
consequently, to preserve the value and goodwill of the Company.
The Employee also acknowledges the time, geographic and scope
limitations of his obligations under subsections (A) and (B) above
are fair and reasonable in all respects, especially in light of the
Company's need to protect Company Confidential Information and the
scope and nature of the Company's business, and that he shall not
be precluded from gainful employment if he is obligated not to
compete with the Company or solicit its customers, employees, or
others during the period and within the Territory as described
above.
D.
Separate Covenants. The covenants
contained in Sections 7.A and 7.B, above, will be construed as a
series of separate covenants. If an adjudicator finds the twelve
(12) month periods set forth in Sections 7.A or 7.B, above, to
exceed the reasonable length of a covenant, then the adjudicator
may expressly limit the time restriction to one that the
adjudicator believes is reasonable in light of the circumstances
and consideration paid in Section 7.E, below. The adjudicator may
also modify the Territory to one that the adjudicator deems
reasonable under the circumstances. In the event that the
adjudicator does not exercise the power granted to it in the prior
sentences that allow for modification of the time limits and/or
Territory, the Company and Employee agree to replace such invalid
or unenforceable term or provision with a valid and enforceable
term or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or
unenforceable term.
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E.
Consideration. As consideration for the
restrictions set forth in Sections 7.A and 7.B, above, the Company
agrees to pay the Employee the one-time sum of one hundred and
fifty thousand dollars ($150,000) within five (5) business days
upon Employee’s execution of this Agreement. The Employee
understands that this consideration is not otherwise owed to him
but is granted in exchange for these covenants.
8.
Conflict of Interest Guidelines
The
Employee agrees to diligently adhere to all policies of the Company
adopted during his employment, and recognize that these policies
may be revised from time to time during his
employment.
9. Dispute
Resolution
Any
dispute concerning this Agreement for the employment relationship
shall be resolved through arbitration conducted by the American
Arbitration Association (“AAA”) and according to the
AAA’s Employment Arbitration Rules then in effect or, if the
Employment Arbitration Rules are no longer in effect, then
according to the AAA’s commercial dispute resolution
procedures. The arbitration shall proceed in Arizona unless the
Company and Employee (the “Parties”) agree to an
alternative forum. The prevailing party in any dispute pertaining
to this Agreement shall be entitled to recover its/his costs and
attorney's fees. The Employee understands that an application for
injunctive relief may, however, be filed in Arizona state and
federal courts as set forth in Section 10.A, below.
10.
Miscellaneous
A.
Governing Law; Consent to Personal
Jurisdiction. This Agreement will be
governed by the laws of the State of Arizona without regard to
Arizona's conflicts-of-law rules that may result in the application
of the laws of any jurisdiction other than Arizona. To the extent
that any lawsuit is permitted or filed relating to this Agreement,
I hereby expressly consent to the personal and exclusive
jurisdiction and venue of the state and federal courts located in
Arizona.
B.
Assignability. The rights and
obligations under this Agreement are personal and not assignable by
either party. The parties may agree to assign rights, but only in
writing and only before the rights are attempted to be
assigned.
C.
Entire Agreement. This Agreement sets
forth the entire agreement and understanding between the Parties
with respect to the subject matter herein and supersedes all prior
written and oral agreements, discussions, or representations. Any
subsequent change or changes in the Employee’s duties,
salary, compensation, conditions or any other terms of employment
will not affect the validity or scope of this
Agreement.
D.
Headings. Headings are used in this
Agreement for reference only and shall not be considered when
interpreting this Agreement.
E.
Severability. If a court or other body
of competent jurisdiction finds, or the Parties mutually believe,
any provision of this Agreement, or portion thereof, to be invalid
or unenforceable, such provision will be enforced to the maximum
extent permissible so as to effect the intent of the Parties, and
the remainder of this Agreement will continue in full force and
effect.
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F.
Modification, Waiver. No modification
of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, will be effective unless in a writing signed
by a person authorized by the Board of Directors and the Employee.
Waiver by the Company of a breach of any provision of this
Agreement will not operate as a waiver of any other or subsequent
breach.
11.
Protected Activity Not Prohibited
The
Employee understands that nothing in this Agreement limits or
prohibits him from filing a charge or complaint with, or otherwise
communicating or cooperating with or participating in any
investigation or proceeding that may be conducted by, any federal,
state or local government agency or commission, including the
Securities and Exchange Commission, the Equal Employment
Opportunity Commission, the Occupational Safety and Health
Administration, and the National Labor Relations Board ("Government
Agencies"), including disclosing documents or other information as
permitted by law, without giving notice to, or receiving
authorization from, the Company. Notwithstanding, in making any
such disclosures or communications, the Employee agrees to take all
reasonable precautions to prevent any unauthorized use or
disclosure of any information that may constitute Company
Confidential Information to any parties other than the Government
Agencies. The Employee further understands that he is not permitted
to disclose the Company's attorney-client privileged communications
or attorney work product. In addition, he hereby acknowledges that
the Company has provided him with notice in compliance with the
Defend Trade Secrets Act of 2016 regarding immunity from liability
for limited disclosures of trade secrets. The full text of the
notice is attached in Exhibit B.
IN
WITNESS THEREOF, the Parties hereto each acting with understanding
and proper authority do hereby execute this Agreement.
XXXXXX XXXXX
Signature:
/s/ Xxxxxx Xxxxx
Date:
September 8, 2020
Signature:
/s/ Xxxxx
Xxxxx
Date:
September 9,
2020
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EXHIBIT A
LIST OF PRIOR INVENTIONS
AND ORIGINAL WORKS OF AUTHORSHIP
|
Title
|
Date
|
Identifying
Number or Brief Description
|
|
|
|
|
XXXXXX XXXXX, attests:
__ No
inventions or improvements
__
Additional Sheets Attached
Signature:
________________________
Date:
____________________
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EXHIBIT B
SECTION 7 OF THE DEFEND TRADE SECRETS ACT OF 2016
Pursuant
to the Defend Trade Secrets Act of 2016, Employee understands
that:
An individual may not be held criminally or civilly liable for any
federal or state trade secret law for the disclosure of a trade
secret that: (A) is made (i) in confidence to a federal,
state, or local government official, either directly or indirectly,
or to an attorney; and (ii) solely for the purpose of reporting or
investigating a suspected violation of law; or (B) is made in a
complaint or other document that is filed under seal in a lawsuit
or other proceeding.
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