ADEX MEDIA, INC. EMPLOYMENT AGREEMENT
Exhibit 10.4
This
Employment Agreement (“Agreement”) by and between AdEx Media, Inc., a Delaware
corporation (“Employer”) and Xxxxxx X. Xxxxxx, an individual (“Employee”), is
effective as of August 12, 2008 (“Effective Date”). In consideration
of the mutual promises made herein, the Company and Employee agree as
follows:
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1.
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Employment. The
Company hereby employs Employee, and Employee hereby accepts employment
with the Company upon all of the terms and conditions described in this
Agreement.
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2.
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Responsibilities. Subject
to the terms of this Agreement, Employee is hereby employed in the
position of Division Manager of Digital Instructor, LLC (or new Company
subsidiary) at the Boulder, Colorado office, and shall perform the
functions and responsibilities of that position. The initial
responsibilities will include day to day management and operations of the
Digital Instructor business. The Company may assign additional
or different duties to Employee and Employee’s position, job description,
duties and responsibilities may be modified from time to time at the sole
discretion of the Company. Employee shall devote the whole of
Employee’s professional time, attention and energies to the performance of
Employee’s work responsibilities under this Agreement. While
employed by the Company or any subsidiary of the Company, Employee will
not, without the prior written consent of the Company, provide services to
or assist in any manner any business or third party which competes with
the current or planned business of the
Company.
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3.
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Compensation. As
consideration for the services and covenants described in this Agreement,
the Company agrees to compensate Employee in the following
manner:
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3.1.
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Salary/Wages.
Employee’s starting gross salary will be the annualized amount of $280,000
payable on a semi-monthly basis for this regular, full time
position. The fact that Employee’s salary is expressed as an
annualized amount does not create or imply any minimum employment
term.
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3.2.
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Stock
Options/Restricted Stock. Contingent on approval by the
Company’s Board of Directors, Employee will be granted standard-form
options to purchase 400,000 shares of the Company’s Common Stock pursuant
to the Company’s stock option plan (the “Options”) that will vest over
four years. One fourth of the total Option amount shall vest upon the
completion of twelve months of employment. The remaining Options shall
vest pro-rata on a monthly basis over the following three years in
accordance with the terms of the Option Agreement evidencing the
grant. The strike price of the Options granted will be the
closing price of the Company’s stock on the date of the Options
grant.
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3.3.
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Benefits. Employee
will be entitled to three (3) weeks of vacation each
year. Employee shall be entitled to receive all benefits to
which senior management of the Company are eligible, in accordance with
any eligibility requirements, policies, or procedures applicable to senior
management of the Company adopted from time to time during the existence
of this Agreement. The rights, if any, of Employee and
Employee’s dependents under any such benefit plans or policies shall be
governed solely by the terms of such plans or policies; provided however,
that Employee shall be given credit for his length of employment with his
previous employer in an amount at least equal to the minimum required for
eligibility for such benefits based on length of employment. The Company
reserves to itself, or its designated administrators, exclusive authority
and discretion to determine all issues of eligibility, interpretation and
administration of each such benefit plan or policy. The Company’s
employment benefits, and policies related thereto, are subject to
termination, modification or limitation at the Company’s sole discretion
at any time.
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3.4.
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Total
Compensation. Employee agrees that the compensation
stated in this Agreement constitutes the full and exclusive consideration
and compensation for all services rendered under the Agreement and for all
promises and obligations under this
Agreement.
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3.5.
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Business
Expenses. The Company shall pay or reimburse Employee’s
reasonable pre-approved business expenses, including expenses incurred for
travel on Company business, in accordance with the policies and procedures
of the Company, as may be adopted or amended from time to time at the
Company’s sole discretion. If Employee incurs business expenses under this
Agreement, Employee shall submit monthly to the Company a request for
reimbursement together with supporting documentation satisfactory to the
Company.
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4.
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Company
Policies. Employee agrees to abide by the Company’s
written and/or disclosed policies, practices and procedures, as they may
from time to time be adopted or modified by the Company at its sole
discretion. The Company’s written policies, practices and procedures,
including any Employee Handbook and/or Code of Conduct, shall be binding
on Employee unless superseded by or in conflict with this Agreement.
Copies of written policies and procedures shall be available to Employee
in the offices of the Company, and Employee shall be responsible at all
times to review these policies and
procedures.
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5.
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Warranties. Employee
hereby represents and warrants that he or she has taken no confidential,
proprietary or trade secret information from Employee’s prior employer or
employers, and will not knowingly disclose such information to the
Company, or improperly use any such information on behalf of the Company.
Employee acknowledges that the Company has specifically demanded that, if
Employee has any such confidential, proprietary or trade secret knowledge
or information, Employee shall not use such information while employed by
the Company for the benefit of the Company. Employee further
warrants that by entering into this Agreement with the Company he or she
is not violating any of the terms, agreements, or covenants of any
previous employment or association. Employee further
acknowledges that the Company has advised Employee to consult with his or
her personal attorney concerning this proposed employment, matters
relating to prior employment and any agreements or other matters that
might affect employment by the Company. Employee acknowledges
and agrees that neither the Company nor anyone acting on its behalf
induced or solicited Employee to breach any contract or other enforceable
obligation in connection with any proposed employment with the Company. If
at any time Employee’s duties with the Company begin to conflict with any
prior agreement, Employee shall promptly notify the Company and shall
cease and desist from any such duties. The parties agree that
this Section 5 is not intended to prohibit Employee from using in the
course of his employment with the Company or disclosing to the Company any
confidential, proprietary or trade secret information of Digital
Instructor, LLC or any subsidiary
thereof.
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6.
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Prior
Inventions. Employee acknowledges that, except for the
inventions disclosed on Appendix A,
attached hereto, Employee does not have any right or claim to any
invention, idea, process, formula, discovery, copyright, patent or other
such item or matter. No rights are hereby conveyed to
inventions, if any, made by Employee prior to employment by the Company,
which inventions are listed in Appendix A.
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7.
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Subsequent
Invention Disclosure. Employee agrees to promptly disclose in
writing to the Company any and all inventions which Employee develops
during the term of his employment, including all software programs, source
or object code, improvements, inventions, formulas, ideas, processes,
techniques, know-how and data, whether or not patentable, that Employee
makes or conceives or reduces to practice or develops, either alone or
jointly with others, during the term of employment by the Company and
which Employee has reason to know could relate to the current or future
systems, products, computer programs, software, software codes, apparatus,
operations or business of the Company. Employee will also
disclose to the Company all inventions made, conceived, reduced to
practice, or developed by Employee within six months of the termination of
employment by the Company that result from prior work with the Company.
Such disclosures shall be received by the Company in confidence and do not
extend the assignment of inventions disclosed beyond that required by
law.
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8.
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Assignment
of Inventions. Except as excluded by paragraph 9, Employee hereby
assigns and agrees that any and all inventions, discoveries, ideas or
improvements that Employee conceives or makes or may conceive or make
during the period of employment relating to or in any way pertaining to or
connected with the systems, products, computer programs, software,
software codes, apparatus or methods employed, manufactured or constructed
by the Company, or to systems, products, apparatus or methods with respect
to which the Company engages in, requests or demonstrably anticipates
research or development (the “Inventions”), shall be the sole and
exclusive property of the Company to the maximum extent permitted by
California Labor Code Section 2870. The Company shall be
the sole owner of all worldwide trade secrets, patents, copyrights, Moral
Rights and other intellectual property rights in connection with such
Inventions. Employee further acknowledges that such Inventions,
including computer programs, software codes and other works of authorship,
are “works made for hire” for purpose of the Company’s rights under
copyright laws. Employee hereby assigns to the Company any
rights he or she may have or acquire in such Inventions, to the maximum
extent allowed by law. Employee further agrees to assign, and hereby does
assign to the Company the entire right, title and interest in and to all
such Inventions as well as any modifications or improvements thereto that
may be made and all worldwide trade secrets, patents, copyrights, Moral
Rights and other intellectual property rights in connection therewith. As
used herein, “Moral Rights” means any rights to claim authorship of an
Invention, to object to or prevent the modification of any Invention, or
to withdraw from circulation or control the publication or distribution of
any invention, and any similar right, existing under judicial or statutory
law of any country in the world, or under any treaty, regardless of
whether or not such right is denominated or generally referred to as a
“moral right.” Employee understands that any Inventions that
Employee has created or possessed prior to Employee’s employment by the
Company are specified in Appendix A
attached to this Agreement and will not be considered to be the property
of the Company.
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9.
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Inventions
Not Assigned. In accordance with California Labor Code
Section 2870, this Agreement does not require the assignment of an
invention which qualifies fully for protection under Section 2870,
which provides as follows:
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(A)
ANY PROVISION IN AN EMPLOYMENT AGREEMENT WHICH PROVIDES THAT AN EMPLOYEE
SHALL ASSIGN, OR OFFER TO ASSIGN, ANY OF HIS OR HER RIGHTS IN AN INVENTION
TO HIS OR HER EMPLOYER SHALL NOT APPLY TO AN INVENTION THAT THE EMPLOYEE
DEVELOPED ENTIRELY ON HIS OR HER OWN TIME WITHOUT USING THE EMPLOYER'S
EQUIPMENT, SUPPLIES, FACILITIES, OR TRADE SECRET INFORMATION EXCEPT FOR
THOSE INVENTIONS THAT EITHER:
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(1)
RELATE AT THE TIME OF CONCEPTION OR REDUCTION TO PRACTICE OF THE INVENTION
TO THE EMPLOYER'S BUSINESS, OR ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH
OR DEVELOPMENT OF THE EMPLOYER; OR
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(2)
RESULT FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE
EMPLOYER.
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(B)
TO THE EXTENT A PROVISION IN AN EMPLOYMENT AGREEMENT PURPORTS TO REQUIRE
AN EMPLOYEE TO ASSIGN AN INVENTION OTHERWISE EXCLUDED FROM BEING REQUIRED
TO BE ASSIGNED UNDER SUBDIVISION (A), THE PROVISION IS AGAINST THE PUBLIC
POLICY OF THIS STATE AND IS
UNENFORCEABLE.
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10.
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Assistance. Employee
will assist the Company in every proper way to obtain for the Company and
enforce all patents, copyrights, mask work rights, trade secret rights and
other legal protections for the assigned inventions in any and all
countries. Employee will execute any documents that the Company
may reasonably request for use in obtaining or enforcing such patents,
copyrights, mask work rights, trade secrets and other legal
protections. Employee’s obligations under this section will
continue beyond the termination of employment with the Company, provided
that the Company will compensate Employee upon the Company’s request of
such assistance. Employee hereby appoints the Secretary of the
Company as Employee’s attorney-in-fact to execute documents on Employee’s
behalf to effect the obligations of Employee under this
Section 10.
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11.
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Confidential,
Proprietary, and Trade Secret Information. During the
course of employment, Employee will come into possession of or acquire
knowledge of confidential, proprietary and trade secret information of the
Company. Employee hereby covenants and agrees that Employee
will not, either during the term of employment or at any time thereafter,
disclose any such confidential, proprietary or trade secret information to
any person, firm, corporation, association, partnership or other entity
(other than those in the Company’s organization qualified and authorized
to receive such information) for any purpose or reason
whatsoever. Such confidential and proprietary information shall
be deemed to include, but not be limited to, (i) Company products,
designs, software, software codes, software developments, research
projects, improvements and methods of operation, (ii) business plans,
marketing plans and related information, (iii) the names, lists,
buying habits and practices of the Company’s customers, clients and
vendors, and the relationships between them and the Company, (iv) the
Company’s financial condition, profit performance and financial
requirements, and (v) all other confidential information of, about or
concerning the Company, the manner of operation of the Company and other
confidential data of any kind, nature or description relating to the
Company. Employee specifically agrees not to make use of any
such confidential or proprietary information for Employee’s own purpose,
or for the benefit of any person, firm, corporation or other entity except
the Company. Employee will abide by the Company’s policies and
procedures, as established from time to time for the protection of its
trade secrets and confidential information. Employee does not know of any
of the Company’s confidential, proprietary or trade secret information
other than the information learned from the Company or purchased from
Digital Instructor, LLC and its subsidiaries, which the Company intends
for Employee to use in the performance of his duties
hereunder. Further, Employee agrees to be bound by, and to
execute such additional instruments as may be necessary or desirable to
evidence Employee’s agreement to be bound by, all nondisclosure or similar
covenants between the Company and any third
party.
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12.
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Return
of Property. All confidential, proprietary and trade
secret information, and all other documents, records, apparatus, equipment
and other physical property which is furnished to or obtained by Employee
in the course of employment with the Company shall be and remain the sole
property of the Company. Employee agrees that, upon termination of his or
her employment, Employee shall return all such property and agrees not to
make or retain copies, reproductions or summaries of any such property
without the express written consent of the
Company.
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13.
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Non-Solicitation. For
a period of two years immediately following the termination of this
Agreement, Employee agrees not to, either directly or indirectly, attempt
to recruit, solicit or take away any of the employees of the Company who
worked for the Company at any time during the term of this Agreement; make
known to any person, firm or corporation the names or addresses of, or any
information pertaining to, any current or former employees of the Company;
attempt to call on, solicit or take away any customers of the Company or
any other persons, corporations or other entities with which the Company
has had or contemplated any business transaction or relationship during
his or her employment with the Company, including, but not limited to,
investments, licenses, joint ventures, and agreements for development,
with the use of any proprietary or confidential information or trade
secret of the Company, for purposes of entering into any business
transaction or relationship with any such customers or other persons,
corporations, or other
entities.
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14.
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Equitable
Relief. Employee and the Company agree that in the event
of any breach of paragraphs 6,
7,
8,
9,
10,
11,
12,
or 13 of
this Agreement, the Company and Employee will not have an adequate remedy
at law. Thus, in the event of such a breach or threatened breach, the
Company and/or Employee will be entitled to such equitable and injunctive
relief as may be available to prevent and restrain the breach of the
provisions of said paragraphs. Such availability to obtain injunctive
relief will not prevent the Company or Employee from pursuing any other
equitable or legal relief, including the recovery of damages from such
breach or threatened breach.
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15.
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At-Will
Employment. Employee’s employment at the Company is at
will. This means that employment may be terminated with or without Cause
and with or without notice at any time by either the Employee or the
Company. Nothing in this or any other document or statement
shall limit the right to terminate employment at will. No
officer, manager, supervisor or employee of the Company has any authority
to enter into an agreement for employment for any specified period of time
or to make an agreement for employment other than at-will. Only
the CEO of the Company has the authority to make any such agreement and
then only in a writing that expressly modifies the policy of at-will
employment.
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16.
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Earn-Out;
Termination For Cause. Pursuant to Section 2.2.4(b) of
that certain Membership Interest Purchase Agreement by and among the
selling members of Digital Instructor, LLC and the Company, dated
______(the “Purchase Agreement”), the Company shall have no obligation to
pay the Earn Out (as defined in the Purchase Agreement) in the event that
the Company terminates Employee for Cause during the Earn Out Period (as
defined in the Purchase Agreement). For purposes of this
Agreement and the Purchase Agreement, any of the following shall
constitute “Cause”: (i)
habitual or continual breach of or failure to perform Employee's duties
pursuant to the terms of this Agreement following written notice of same
by the Company; (ii) fraud, dishonesty, deliberate injury or intentional
material misrepresentation by Employee to the Company or any third party
in which the Company has an interest; (iii) embezzlement, theft or
conversion by Employee; (iv) unauthorized disclosure or other unauthorized
use of the Company's trade secrets, customer lists or confidential
information; (v) habitual misuse of alcohol or any controlled substance or
intoxicant; (vi) willful misconduct that causes material harm to the
Company, (vii) fraud, dishonesty, or other act of substantial misconduct
in the performance of Employee’s duties pursuant to the terms of this
Agreement, (viii) willful failure or refusal to comply or violation of any
lawful policies, standards and regulations of the Company, as may be
modified from time and disclosed to Employee in writing, (ix) conviction
of or plea of guilty or nolo contendere to a felony or misdemeanor
involving moral turpitude, (x) continuing failure to communicate and fully
disclose material information to the Board of Directors of the Company
following written notice of same by the Company, the failure of which
would materially adversely impact the Company or may result in a violation
of state or federal securities laws, or (xi) debarment by any federal
agency that would limit or prohibit Employee from serving in his capacity
for the Company under this Agreement. For the avoidance of
doubt, nothing in this or any other agreement shall be deemed to limit the
at-will nature of the employment relationship between Employee and the
Company.
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17.
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Effect
of Termination. In the event that Employee’s employment
is terminated for any reason, the Company will pay Employee any authorized
business expenses that were incurred but not reimbursed as the date of
termination, any accrued but unused vacation or personal leave consistent
with the Company’s vacation or personal leave policy, and such additional
compensation as may be due to Employee under any policy of the Company to
which Employee is subject at the time of such
termination.
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18.
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Termination
by Employee or by the Company Relating to
Relocation. The Company agrees not to (a) relocate the
present office of Digital Instructor LLC or (b) request or require
Employee to relocate more than 15 miles from the present office of Digital
Instructor LLC in Boulder, Colorado (either a “Relocation”) during the
Earn Out Period. In the event that the Company breaches this
Section 18 or terminates Employee’s employment due to Employee’s refusal
to Relocate at any time during his employment with the Company, such
breach or termination will be deemed to be a termination by the Company
without Cause as defined in Section
16.
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19.
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Employment
Eligibility Verification. For purposes of federal
immigration law, Employee will be required to provide to the Company
documentary evidence of Employee’s identity and eligibility for employment
in the United States. Such documentation must be provided to
the Company within three business days of the date of hire or Employee’s
employment may be
terminated.
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20.
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Notification. Employee
authorizes the Company to notify Employee’s future employers of the terms
of this Agreement and Employee’s responsibilities
hereunder.
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21.
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Name
and Likeness Rights. Employee authorizes the Company to
use, reuse, and to grant others the right to use and reuse Employee’s
name, photograph, likeness (including caricature), voice, and biographical
information, and any reproduction or simulation thereof, in any media now
known or hereafter developed (including, but not limited to, film, video
and digital or other electronic media), both during and after Employee’s
employment with the Company, for whatever business-related purposes the
Company deems necessary.
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22.
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Governing
Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of
California.
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23.
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Interpretation. This
Agreement shall be interpreted in accordance with the plain meaning of its
terms and not strictly for or against either
party.
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24.
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Headings. The
headings of this Agreement are intended solely for the convenience of
reference and should be given no effect in the construction or
interpretation of this
Agreement.
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25.
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Entire
Agreement. This Agreement, the Option Agreement, the
Membership Interest Purchase Agreement and the Lockup Agreement embody the
complete agreement and understanding of the parties related to his or her
employment of the Employee by the Company, superseding any and all other
prior or contemporaneous oral or written agreements or communications
between the parties hereto with respect to the employment of the Employee
by the Company, and contains all of the covenants and agreements of any
kind whatsoever between the parties with respect to such employment. Each
party acknowledges that no representations, inducements, promises or
agreements, whether oral or written, express or implied, have been made by
either party or anyone acting on behalf of any party, that are not
incorporated herein and that no other agreement or promise not contained
herein shall be valid or
binding.
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26.
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Modification. This
Agreement may be modified or amended only by an agreement in writing
signed by the parties
hereto.
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27.
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Waiver. The
failure of either party to insist, in any one or more instances, upon
performance of the terms or conditions of this Agreement shall not be
construed as a waiver or relinquishment of any right granted under this
Agreement or of the future performance of any such term or
condition.
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28.
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Severability. Should
any provision or part of this Agreement be held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining
provisions and parts shall be unaffected and shall continue in full force
and effect, and said invalid, void or unenforceable provision or part
shall be deemed not to be part of this
Agreement.
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29.
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No
Partnership. The parties agree that nothing expressed or
implied in this Agreement shall be deemed or construed by the parties
hereto, or by any third person, to create the relationship of principal
and agent or of partnership or joint venture or of lessor and lessee or of
any other association between Employee and Company other than that of
employer and employee.
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30.
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Voluntary
Agreement. Employee and the Company represent and agree
that each has reviewed all aspects of this Agreement, has carefully read
and fully understands all provisions of this Agreement, and is voluntarily
entering into this Agreement. Each party represents and agrees
that such party has had the opportunity to review any and all aspects of
this Agreement with the legal, tax or other advisor or advisors of such
party’s choice before executing this
Agreement.
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31.
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Successors
and Assigns. This Agreement shall be binding upon, inure
to the benefit of, and be enforceable by and against the Employee’s heirs,
beneficiaries and legal representatives. The rights and obligations of
Employee may not be delegated or assigned except as expressly set forth in
this Agreement. In the event of a sale of all or substantially all of the
Company’s capital stock, sale of all, or substantially all of the
Company’s assets, or consolidation or merger of the Company with or into
another corporation, entity or individual, the Company may assign its
rights and obligations under this Agreement to its successor-in-interest,
and such successor-in-interest shall be deemed to have acquired all rights
and assumed all obligations of the Company under this
Agreement.
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32.
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Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and
the same instrument.
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33.
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Indemnification. The
Company will indemnify, defend and hold harmless Employee and his heirs,
representatives and assigns (each such person being an “Indemnified
Party”) from and against any and all losses, claims, damages,
judgments, assessments, costs (including reasonable attorneys' fees and
amounts paid in settlement, if such settlement is approved by the Company)
and other liabilities, joint or several (“Liabilities”) in connection with
any action, suit or proceeding, civil or criminal, to which Employee (a)
may be made a party or with which Employee shall be threatened, by reason
of Employee being or having been an employee of the Company, or (b) may
become subject under any applicable federal or state law, rule or
regulation, or otherwise relating to the business of the Company. For the
avoidance of doubt, the Company will pay any and all reasonable fees and
expenses (including reasonable counsel fees and expenses) as they are
incurred by an Indemnified Party in connection with the investigation of,
preparation for, or defense of any pending or threatened claim or action,
unless Employee has been determined to have been grossly
negligent. In the event of any such determination of gross
negligence, Employee shall, within thirty (30) days of such determination,
reimburse the Company for any and all fees, costs or expenses paid by the
Company pursuant to this Section 33 in respect of Employee’s investigation
of, preparation for or defense of such
claim(s).
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EMPLOYEE
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By:
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Signature
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Signature
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Xxxxxx
X. Xxxxxx
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Print
Name
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Print
Title
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Date
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Date
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Employment
Agreement: Page 7
Appendix A
Inventions
Except as
set forth below, I hereby acknowledge that at this time I have no right, title,
or other interest in any invention, patent, copyright, or other such material
other than the following: (If none, so state)
NONE.
DATED:_______________________
_______________________________Employee
