EXECUTIVE EMPLOYMENT AGREEMENT
This
EMPLOYMENT
AGREEMENT is made and entered into effective as of March 14, 2008 (the
“Effective Date”) by and between The Small Business Company (the “Company”), and
Xxxxx Xxxxxxxxx, the undersigned individual (“Executive”).
RECITAL
The
Company and
Executive desire to enter into an Employment Agreement setting forth the terms
and conditions of Executive’s employment with the Company.
AGREEMENT
NOW,
THEREFORE, in
consideration of the mutual covenants and agreements hereinafter set forth,
the
Company and Executive agree as follows:
1. Employment.
(a) Term.
The Company
hereby employs Executive to serve as Secretary of the Company and Executive
Vice
President and to serve in such additional or different position or positions
as
the Company may determine in its sole discretion. As Secretary and Executive
Vice President, the Executive shall be an Officer of the Company. The term
of
employment shall be for a period of one (1) year (“Employment Period”) to
commence on the Effective Date, and renewable at the Company’s discretion on
each anniversary.
(b) Duties
and
Responsibilities.
Executive will be
responsible for the formation and implementation of the Company’s Small Business
Coaching Program and other duties as agreed upon with the Company’s Board of
Directors. The Executive shall report to the Company’s Board of Directors.
(c) Location.
The initial
principal location at which Executive shall perform services for the Company
shall be at 000 Xxx xx Xx Xxxxx, Xxxxx 000, Xxxxxx Xxxxx, XX 00000.
2. Compensation.
(a) Base
Salary.
Executive shall
be paid a base salary (“Base Salary”) at the annual rate of $120,000, payable
twice monthly consistent with Company’s payroll practices. The annual Base
Salary shall be reviewed on an annual basis by the Board of Directors or
Compensation Committee to determine if such Base Salary should be increased
in
recognition of services to the company.
(b) Payment.
Payment of all
compensation to Executive hereunder shall be made in accordance with the
relevant Company policies in effect from time to time, including normal payroll
practices, and shall be subject to all applicable employment and withholding
taxes. It is understood and agreed to, by both the Executive and the Company,
that payment of the agreed to salary will not commence until the Company has
received funding or revenues sufficient to support the payment of salaries
to
employees. Additionally, the Executive and the Company agree that should cash
shortfalls preclude payment of the Executive’s salary that any unpaid salary
shall NOT be accrued.
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(c) Bonus.
Executive shall
also be entitled to a one-time bonus of $16,667 upon receipt of funding
sufficient to support payment to employees, as set forth under Section 2(b)
above, subject to the discretion of the Board of Directors. Other bonus payments
shall be determined at the sole discretion of the Board of
Directors.
3. Other
Employment
Benefits.
(a) Business
Expenses.
Upon submission
of itemized expense statements in the manner specified by the Company, Executive
shall be entitled to reimbursement for reasonable travel and other reasonable
business expenses duly incurred by Executive in the performance of his duties
under this Agreement.
(b) Benefit
Plans.
Executive shall
be entitled to participate in the Company’s medical and dental plans, life and
disability insurance plans and retirement plans pursuant to their terms and
conditions and once implemented by the Company. It is understood by the
Executive that no Benefit Plan currently exists but that the Executive shall
immediately be entitled to Benefits once a Plan is executed and in force. There
is no accrual of benefits prior to execution and implementation of Plan.
Executive shall be entitled to participate in any other benefit plan offered
by
the Company to its employees during the term of this Agreement (other than
stock
option or stock incentive plans, which are governed by Section 3(d) below).
Nothing in this Agreement shall preclude the Company or any affiliate of the
Company from terminating or amending any employee benefit plan or program from
time to time.
(c) Vacation.
Executive shall
be entitled to three (3) weeks of vacation each year of full employment,
exclusive of legal holidays, as long as the scheduling of Executive’s vacation
does not interfere with the Company’s normal business operations.
(d) Stock
Options.
Executive shall
be entitled to options to acquire 500,000 shares of the Common Stock of the
Company pursuant to the terms of our 2007 Stock Plan. Issuance of the options
shall be in accordance with all applicable securities laws and the other terms
and conditions of our 2007 Stock Incentive Plan and the stock option agreement
to be executed between the Company and Executive (the “Stock Option Agreement”).
(e) No
Other
Benefits.
Executive
understands and acknowledges that the compensation specified in Sections 2
and 3 of this Agreement shall be in lieu of any and all other compensation,
benefits and plans.
4. Executive’s
Business Activities.
Executive shall
devote the substantial portion of his entire business time, attention and energy
exclusively to the business and affairs of the Company and its affiliates,
as
its business and affairs now exist and as they hereafter may be changed.
(Executive may serve as a member of the Board of Directors of other
organizations that do not compete with the Company, and may participate in
other
professional, civic, governmental organizations and activities that do not
materially affect his ability to carry out his duties hereunder.)
5. Termination
of
Employment.
(a) For
Cause.
Notwithstanding
anything herein to the contrary, the Company may terminate Executive’s
employment hereunder for cause for any one of the following reasons:
(1) conviction
of a felony, any act involving moral turpitude, or a misdemeanor where
imprisonment is imposed; (2) commission
of any act of theft, fraud, dishonesty, or falsification of any employment
or
Company records; (3) improper
disclosure of the Company’s confidential or proprietary information;
(4) any
action
by the Executive which has a detrimental effect on the Company’s reputation or
business; (5) Executive’s
failure or inability to perform any reasonable assigned duties after written
notice from the Company of, and a reasonable opportunity to cure, such failure
or inability; (6) any
breach
of this Agreement, which breach is not cured within ten (10) days following
written notice of such breach; (7) a
course of
conduct amounting to gross incompetence; (8) chronic
and
unexcused absenteeism; (9) unlawful
appropriation of a corporate opportunity; or (10) misconduct
in connection with the performance of any of Executive’s duties, including,
without limitation, misappropriation of funds or property of the Company,
securing or attempting to secure personally any profit in connection with any
transaction entered into on behalf of the Company, misrepresentation to the
Company, or any violation of law or regulations on Company premises or to which
the Company is subject. Upon termination of Executive’s employment with the
Company for cause, the Company shall be under no further obligation to
Executive, except to pay all accrued but unpaid base salary and accrued vacation
to the date of termination thereof.
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(b) Without
Cause.
The Company may
terminate Executive’s employment hereunder at any time without cause, provided,
however, that Executive shall be entitled to severance pay in the amount of
four
(4) weeks of Base Salary in addition to accrued but unpaid Base Salary and
accrued vacation, less deductions required by law, but if, and only if,
Executive executes a valid and comprehensive release of any and all claims
that
the Executive may have against the Company in a form provided by the Company
and
Executive executes such form within seven (7) days of tender.
(c) Resignation.
Upon termination
of employment, Executive shall be deemed to have resigned from the Board of
Directors of the Company if he is a director.
(d) Cooperation.
After notice of
termination, Executive shall cooperate with the Company, as reasonably requested
by the Company, to effect a transition of Executive’s responsibilities and to
ensure that the Company is aware of all matters being handled by
Executive.
6. Disability
of
Executive.
The Company may
terminate this Agreement without liability if Executive shall be permanently
prevented from properly performing his essential duties hereunder with
reasonable accommodation by reason of illness or other physical or mental
incapacity for a period of more than one hundred twenty 120 consecutive days.
Upon such termination, Executive shall be entitled to all accrued but unpaid
Base Salary and vacation.
7. Death
of
Executive.
In the event of
the death of Executive during the Employment Period, the Company’s obligations
hereunder shall automatically cease and terminate; provided, however, that
within 15 days the Company shall pay to Executive’s heirs or personal
representatives Executive’s Base Salary and accrued vacation accrued to the date
of death.
8. Confidential
Information and Invention Assignments.
Executive is
simultaneously executing a Confidential Information and Invention Assignment
Agreement (the “Confidential Information and Invention Assignment Agreement”).
The obligations under the Confidential Information and Invention Assignment
Agreement shall survive termination of this Agreement for any
reason.
9. Exclusive
Employment.
During employment
with the Company, Executive will not do anything to compete with the Company’s
present or contemplated business, nor will he plan or organize any competitive
business activity. Executive will not enter into any agreement which conflicts
with his duties or obligations to the Company. Executive will not during his
employment or within one (1) year after it ends, without the Company’s express
written consent, directly or indirectly, solicit or encourage any employee,
agent, independent contractor, supplier, customer, consultant or any other
person or company to terminate or alter a relationship with the
Company.
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10. Assignment
and
Transfer.
Executive’s
rights and obligations under this Agreement shall not be transferable by
assignment or otherwise, and any purported assignment, transfer or delegation
thereof shall be void. This Agreement shall inure to the benefit of, and be
binding upon and enforceable by, any purchaser of substantially all of Company’s
assets, any corporate successor to Company or any assignee thereof.
11. No
Inconsistent
Obligations.
Executive is
aware of no obligations, legal or otherwise, inconsistent with the terms of
this
Agreement or with his undertaking employment with the Company. Executive will
not disclose to the Company, or use, or induce the Company to use, any
proprietary information or trade secrets of others. Executive represents and
warrants that he or she has returned all property and confidential information
belonging to all prior employers.
12. Miscellaneous.
(a) Attorneys’
Fees.
Should either
party hereto, or any heir, personal representative, successor or assign of
either party hereto, resort to legal proceedings in connection with this
Agreement or Executive’s employment with the Company, the party or parties
prevailing in such legal proceedings shall be entitled, in addition to such
other relief as may be granted, to recover its or their reasonable attorneys’
fees and costs in such legal proceedings from the non-prevailing party or
parties; provided, however, that nothing herein is intended to affect the
provisions of Section 12(l).
(b) Governing
Law.
This Agreement
shall be governed by and construed in accordance with the laws of the State
of
California without regard to conflict of law principles.
(c) Entire
Agreement.
Except with
respect to the 2007 Stock Incentive Plan and Stock Option Agreement referenced
in Section 3(d), this Agreement, together with the attached exhibits and
the Confidential Information and Invention Assignment Agreement, contains the
entire agreement and understanding between the parties hereto and supersedes
any
prior or contemporaneous written or oral agreements, representations and
warranties between them respecting the subject matter hereof.
(d) Amendment.
This Agreement
may be amended only by a writing signed by Executive and by a duly authorized
representative of the Company.
(e) Severability.
If any term,
provision, covenant or condition of this Agreement, or the application thereof
to any person, place or circumstance, shall be held to be invalid, unenforceable
or void, the remainder of this Agreement and such term, provision, covenant
or
condition as applied to other persons, places and circumstances shall remain
in
full force and effect.
(f) Construction.
The headings and
captions of this Agreement are provided for convenience only and are intended
to
have no effect in construing or interpreting this Agreement. The language in
all
parts of this Agreement shall be in all cases construed according to its fair
meaning and not strictly for or against the Company or Executive.
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(g) Rights
Cumulative.
The rights and
remedies provided by this Agreement are cumulative, and the exercise of any
right or remedy by either party hereto (or by its successor), whether pursuant
to this Agreement, to any other agreement, or to law, shall not preclude or
waive its right to exercise any or all other rights and remedies.
(h) Non-waiver.
No failure or
neglect of either party hereto in any instance to exercise any right, power
or
privilege hereunder or under law shall constitute a waiver of any other right,
power or privilege or of the same right, power or privilege in any other
instance. All waivers by either party hereto must be contained in a written
instrument signed by the party to be charged and, in the case of the Company,
by
an officer of the Company (other than Executive) or other person duly authorized
by the Company.
(i) Remedy
for
Breach; Attorneys’ Fees.
The parties
hereto agree that, in the event of breach or threatened breach of any covenants
of Executive, the damage or imminent damage to the value and the goodwill of
the
Company’s business shall be inestimable, and that therefore any remedy at law or
in damages shall be inadequate. Accordingly, the parties hereto agree that
the
Company shall be entitled to injunctive relief against Executive in the event
of
any breach or threatened breach of any of such provisions by Executive, in
addition to any other relief (including damages) available to the Company under
this Agreement or under law. The prevailing party in any action instituted
pursuant to this Agreement shall be entitled to recover from the other party
its
reasonable attorneys’ fees and other expenses incurred in such
action.
(j) Notices.
Any notice,
request, consent or approval required or permitted to be given under this
Agreement or pursuant to law shall be sufficient if in writing, and if and
when
sent by certified or registered mail, with postage prepaid, to Executive’s
residence (as noted in the Company’s records), or to the Company’s principal
office, as the case may be.
(k) Assistance
in
Litigation.
Executive shall,
during and after termination of employment, upon reasonable notice, furnish
such
information and proper assistance to the Company as may reasonably be required
by the Company in connection with any litigation in which it or any of its
subsidiaries or affiliates is, or may become a party; provided, however, that
such assistance following termination shall be furnished at mutually agreeable
times and for mutually agreeable compensation.
(l) Arbitration.
Any controversy,
claim or dispute arising out of or relating to this Agreement or the employment
relationship, either during the existence of the employment relationship or
afterwards, between the parties hereto, their assignees, their affiliates,
their
attorneys, or agents, shall be settled by arbitration in San Diego, California.
Such arbitration shall be conducted in accordance with the then prevailing
commercial arbitration rules of the American Arbitration Association (but the
arbitration shall be in front of an arbitrator appointed by JAMS/Endispute
(“JAMS”), with the following exceptions if in conflict: (a) one arbitrator
shall be chosen by JAMS; (b) each party to the arbitration will pay its pro
rata share of the expenses and fees of the arbitrator(s), together with other
expenses of the arbitration incurred or approved by the arbitrator(s); and
(c) arbitration may proceed in the absence of any party if written notice
(pursuant to the JAMS’ rules and regulations) of the proceedings has been given
to such party. The parties agree to abide by all decisions and awards rendered
in such proceedings. Such decisions and awards rendered by the arbitrator shall
be final and conclusive and may be entered in any court having jurisdiction
thereof as a basis of judgment and of the issuance of execution for its
collection. All such controversies, claims or disputes shall be settled in
this
manner in lieu of any action at law or equity; provided however, that nothing
in
this subsection shall be construed as precluding the Company from bringing
an
action for injunctive relief or other equitable relief or relief under the
Confidential Information and Invention Assignment Agreement. The arbitrator
shall not have the right to award punitive damages, consequential damages,
lost
profits or speculative damages to either party. The parties shall keep
confidential the existence of the claim, controversy or disputes from third
parties (other than the arbitrator), and the determination thereof, unless
otherwise required by law or necessary for the business of the Company. The
arbitrator(s) shall be required to follow applicable law. IF FOR ANY REASON
THIS
ARBITRATION CLAUSE BECOMES NOT APPLICABLE, THEN EACH PARTY, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL
BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER MATTER
INVOLVING THE PARTIES HERETO.
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IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the
date set forth below.
| The Small Business Company | EXECUTIVE: |
| By: | By: |
| Name: Xxxxx Xxxxxx | Xxxxx Xxxxxxxxx |
| Title: President | Vice President |
|
Date:
|
Date:
|
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