EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into effective as of
July 15, 2007 (the "Effective Date"), by and between Semotus Solutions, Inc., a
Nevada corporation, whose corporate headquarters is located at 000 Xxxxxxxxxx
Xxx., Xxxxx 000, Xxx Xxxxx, XX 00000 (the "Company"), and Xxxxxxx X. XxXxxx
("Executive"), whose address is 00 Xxxx Xxxxxx, Xxx Xxxxx, XX 00000.
In consideration of the mutual promises and conditions contained in this
Agreement, the Company and Executive agree as follows:
1. Employment. The Company shall employ Executive and Executive accepts such
employment upon the terms and conditions as set forth in this Agreement from the
Effective Date.
2. Duties.
a. Title and Duties. Executive shall serve as Chief Executive Officer of
the Company. Executive shall have the authority and duty to manage and conduct
the business of the Company and such other duties and responsibilities as the
Board of Directors of the Company shall determine, assign, or delegate from time
to time during the period of this Agreement. Executive agrees to devote
substantially all his employable time to the business of the Company and shall
abide by the rules, regulations, instructions, personnel practices, and policies
of the Company and any changes to them that may be adopted by the Company,
except to the extent inconsistent with the terms of this Agreement. Executive
shall report to the Board of Directors of the Company. Executive shall be based
in the Los Gatos, California area and shall not be required to travel more often
than he has historically traveled on company business.
Chairman of the Board of Directors. Each year during the term of the Agreement,
the Board shall designate Executive as Chairman of the Board, shall recommend
Executive as a director, and the Board shall otherwise use its best efforts to
have Executive elected as a director and to have him remain as Chairman of the
Board during the term of this Agreement.
b. Other Positions. Nothing in this Agreement shall prevent Executive, upon
prior approval of the Company's Board of Directors, from serving as a director
or trustee of other corporations or businesses that are not in competition with
the Company, as long as such activities or positions do not interfere with
Executive's duties and responsibilities to the Company. Nothing in this
Agreement shall prevent Executive from investing in or becoming a partner or
shareholder in any corporation, partnership, or other venture not in competition
with the Company, as long as such activities do not interfere with Executive's
duties and responsibilities to the Company.
3. Compensation and Expenses.
a. Salary. The Company will pay to Executive a base salary of Two Hundred
Forty Thousand Dollars ($240,000.00) per year, beginning as of the effective
date of this agreement and
running for twelve consecutive months thereafter, for a term of three years.
Such salary shall be earned monthly and shall be payable semi-monthly in no
fewer than 24 equal monthly installments in accordance with the Company's
customary practices for peer executives. The Company shall withhold and deduct
from the salary payments all taxes required by federal and state laws and any
other authorized deductions. The Company will review Executive's salary at least
annually. The Company may in its sole discretion increase Executive's base
salary beyond what is expressly provided for in this paragraph 3.a., but it may
not reduce Executive's base salary without Executive's consent.
b. Bonus. In addition to the annual base salary set forth in paragraph 3.a.
above, the Company's Compensation Committee may, in its sole discretion,
consider bonus compensation for Executive.
c. Incentive, Savings, and Retirement Plans. Executive shall be entitled to
participate in all incentive, savings, and retirement plans, policies, and
programs made available by the Company to other peer executives of the Company.
d. Welfare Benefit Plans. Executive may participate in and shall receive
benefits under welfare benefit plans, policies, and programs, including medical,
dental, disability, and life insurance plans and programs made available by the
Company to other peer executives of the Company.
e. Vacation. Executive shall be entitled to 25 days of vacation per year
with full pay. Executive's vacation shall be taken in accordance with and shall
be subject to the terms of the plans and policies in effect generally as to
other peer executives of the Company.
f. Fringe Benefits. Executive shall be entitled to fringe benefits in
accordance with the plans, practices, programs, and policies in effect generally
as to other peer executives of the Company during Executive's employment with
the Company, plus a car allowance of $1,000 per month.
g. Expenses. The Company shall reimburse Executive for all reasonable
business-related expenses incurred by Executive in connection with his
employment with the Company, including entertainment, travel, meals, and lodging
in accordance with the policies, practices, and procedures in effect generally
with respect to other peer executives of the Company.
4. Termination of Employment.
a. By Death. Executive's employment with the Company shall terminate
automatically upon Executive's death.
b. By Disability. The Company may terminate Executive's employment with the
Company during any period in which Executive is considered by the Company to be
disabled. Executive shall be considered "disabled" if, in the sole opinion of
the Company, as determined in good faith, Executive is prevented, after
reasonable accommodation by the Company, from
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properly performing his duties due to a mental or physical illness for a period
of 180 days in the aggregate in any 12-month period.
c. For Cause. Notwithstanding any other provision contained in this
Agreement, the Company may terminate this Agreement immediately, at any time,
for Cause. For purposes of this Agreement, "Cause" shall mean any of the
following: (i) the conviction of a felony, or a crime involving dishonesty or
moral turpitude; (ii) fraud, misappropriation or embezzlement; or (iii) willful
failure or gross negligence in the performance of assigned duties, which failure
or negligence continues for more than thirty (30) days following written notice
of such failure or negligence.
d. For Good Reason. Notwithstanding any other provisions of this Agreement,
Executive may terminate Executive's employment immediately, at any time, for
Good Reason. For purposes of this Agreement, "Good Reason" shall include:
(1) Assignment by the Company to Executive of any duties inconsistent
in any substantial respect with the position, authority, or responsibilities
associated with Executive's position as set forth in this Agreement, but
excluding any isolated, insubstantial, or inadvertent action not taken in bad
faith which was promptly remedied by the Company after receipt of notice by
Executive;
(2) The Company's relocation of Executive to an office or location
that is further than 50 miles from the office at which Executive was originally
hired to work for the Company;
(3) Reduction by the Company of Executive's base salary from that
provided in paragraph 3.a. of this Agreement;
(4) In the event that there is a successor to the Company, the failure
of the Company to obtain an agreement from any such successor that is
satisfactory to Executive to perform the obligations of the Company under this
Agreement; and
(5) Failure of the Company to fulfill any of its other material
obligations to Executive under this Agreement.
e. For Other Than Cause , Good Reason, Death or Disability. The Company or
Executive may not terminate Executive's employment at any time for other than
Cause, Good Reason, Death or Disability.
f. Obligations of Executive on Termination.
(1) Executive acknowledges and agrees that all property, including
keys, credit cards, books, manuals, records, reports, notes, contracts, customer
lists, Confidential Information as defined in this Agreement, copies of any of
the foregoing, and any equipment furnished to Executive by the Company, belong
to the Company and shall be promptly returned to the Company upon termination of
employment.
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(2) Upon termination of employment, Executive shall be deemed to have
resigned from all offices and directorships then held with the Company.
g. Obligations of the Company on Termination.
(1) For Any Reason. Upon termination of this Agreement for any reason,
the Company's obligations to Executive under this Agreement shall include (a)
the prorated payment of Executive's salary through the date of termination to
the extent not paid by then; (b) the payment of earned and accrued bonus or
incentive payments due Executive, if any, at the time of termination under any
bonus or incentive plans in which Executive participated prior to termination;
(c) the payment of any unused accrued vacation through the date of termination;
and (d) the payment of any reimbursable business expenses that were documented
by Executive prior to termination in accordance with the Company's policies as
set forth in paragraph 3.g. of this Agreement and that were not reimbursed by
the Company at the time of the termination of this Agreement.
(2) Death or Disability. If Executive's employment is terminated by
reason of Executive's death or disability, this Agreement shall terminate and
the Company will have no further obligation to Executive, except as otherwise
provided by law or by paragraph 4(g)(1) this Agreement.
(3) Without Cause or For Good Reason, or if the Company is Acquired or
Dissolves. If Executive's employment is terminated by the Company Without Cause
or by Executive for Good Reason as provided in this Agreement, or if the Company
is acquired or dissolves, this Agreement shall terminate and all shares of stock
and stock options of the Company then owned by Executive which are unvested
shall become immediately fully vested, and the Company shall pay to the
Executive severance pay equal to the remaining years and/or months of
Executive's then current base salary that are due, based on a three year
agreement term.
(4) For Cause. If Executive's employment is terminated for Cause, this
Agreement shall terminate and the Company will have no further obligation to
Executive, except as otherwise provided by law or by paragraph 4(g)(1) this
Agreement.
5. Covenants of Executive.
a. Noncompetition and Noninterference With Business. For so long as he is
employed by the Company, Executive will not directly or indirectly provide
services for, own, manage, or operate any business that is at that time in
competition with the Company.
b. Nonsolicitation of Business or Customers. For so long as he is employed
by the Company, Executive will not influence or attempt to influence customers
of the Company to divert their business to any individual or entity then in
competition with the Company.
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c. Nonsolicitation of Employees. For so long as he is employed by the
Company, Executive will not disrupt, damage, impair, or interfere with the
business of the Company by directly or indirectly soliciting Company employees
to work for any individual or entity then in competition with the Company.
d. Confidential Information.
(1) "Confidential Information" as used in this Agreement shall mean
information disclosed to Executive, known to Executive, or developed by
Executive, alone or with others, in connection with his employment with the
Company that is not generally known in the industry in which the Company is or
may become engaged, about the Company's products, processes, and services,
including information relating to written lists of names, customers, sources of
supply, personnel, sources or methods of financing, marketing, pricing,
merchandising, interest rates, or sales.
(2) Executive acknowledges that all Confidential Information is
received or developed by him in confidence. For so long as he is employed by the
Company, Executive will not, directly or indirectly, except as required by the
normal business of the Company or as expressly consented to in writing and in
advance by the Company's Board of Directors: (a) disclose, publish, or make
available, other than to an authorized employee, officer, or director of the
Company, any Confidential Information; (b) sell, transfer, or otherwise use or
exploit any Confidential Information; or (c) permit the sale, transfer, use, or
exploitation of any Confidential Information by any third party.
(3) Nothing in this paragraph 5 shall be construed so as to prevent
Executive from using in connection with his employment for any individual or
entity other than the Company any knowledge that was acquired by Executive
during the course of his employment with the Company that is generally known to
persons of Executive's experience in other companies in the same industry as the
Company.
6. Assignment. This Agreement is personal to Executive and shall not be assigned
by Executive. Any such assignment shall be null and void.
7. Successors. This Agreement shall inure to the benefit and be binding upon the
Company and its subsidiaries, successors, and assigns and any person acquiring,
whether by merger, consolidation, purchase of assets, or otherwise, all or
substantially all of the Company's assets. The rights of Executive to receive
payment of compensation provided for in this Agreement shall inure to the
benefit of, and may be enforced by, Executive's estate in the event of his
death.
8. Waiver. No delay or omission by the Company or Executive in exercising any
right under this Agreement shall operate as a waiver of that or any other right.
No waiver of any provision of this Agreement, or consent to any departure by
either party from any provision of this Agreement, shall be effective in any
event unless it is in writing, designated a waiver, and signed by the party
waiving the breach. Such a waiver shall be effective only in the specific
instance and for the purpose for which it is given.
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9. Severability. The provisions of this Agreement are divisible; if any
provision shall be deemed invalid or unenforceable, that provision shall be
deemed limited to the extent necessary to render it valid and enforceable and
the remaining provisions of this Agreement shall continue in full force and
effect without being impaired or invalidated in any way.
10. Amendment. This Agreement may not be altered or amended except in a writing
signed by both Executive and the Company, following approval of the Company's
Board of Directors.
11. Construction and Governing Law. The captions used in connection with this
Agreement are for reference purposes only and shall not be construed as part of
this Agreement. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
12. Entire Agreement. This Agreement supersedes all prior agreements,
understandings, and communications between Executive and the Company, whether
written or oral, express or implied, relating to the subject matter of the
Agreements and is intended as a complete and final expression of the terms of
the agreement between Executive and the Company and shall not be changed or
subject to change orally. The parties further agree that neither they nor anyone
acting on their behalf made any inducements, agreements, promises, or
representations other than those set forth in this Agreement.
13. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given (a) upon personal delivery or (b)
upon facsimile delivery, with written confirmation, or (c) within five (5) days
of deposit in the United States Post Office, by registered or certified mail
with postage and fees prepaid, addressed to Executive at his address shown on
the Company's records and to the Company at the address of its principal
corporate offices (attention: Corporate Secretary) or at such other address as
such party may designate by ten (10) days' advance written notice to the other
party hereto.
The parties to this Agreement have executed this Agreement to be effective
as of the Effective Date.
SEMOTUS SOLUTIONS, INC.,
a Nevada corporation,
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
Its: General Counsel
Dated: July 6, 2007
And:
/s/ Xxxxxxx X. XxXxxx
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Xxxxxxx X. XxXxxx
Dated: July 6, 2007
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