EMPLOYMENT AGREEMENT
Exhibit 10.1
THIS EMPLOYMENT AGREEMENT, entered into April 18, 2016, by and between Virtual Piggy, Inc., a Delaware corporation (the “Company”) and Xxxx Xxxxx (the “Employee”).
WITNESSETH:
WHEREAS, the Company wishes to employ the Employee as President, Chief Executive Officer and Chairman of the Board of the Company and the Employee is willing to serve the Company in such capacity.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the parties hereto agree as follows:
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Section 1.
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Employment
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The Company will employ the Employee, and the Employee will perform services for the Company and its subsidiaries, on the terms and conditions set forth in this Agreement.
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Section 2.
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Duties
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The Employee will serve the Company as its President, Chief Executive Officer and Chairman of the Board. The Employee will have such duties and responsibilities as are assigned to him by the Board of Directors of the Company commensurate with the Employee’s position, including responsibility for all strategic and operational matters relating to the Company and its subsidiaries, subject to the direction of the Board of Directors. The Employee will perform his duties hereunder faithfully and to the best of his abilities and in furtherance of the business of the Company and its subsidiaries, and will devote his full business time, energy, attention and skill to the business of the Company and its subsidiaries and to the promotion of its interests, except as otherwise agreed by the Company.
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Section 3.
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Term
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This Agreement shall have an initial term of two years, beginning as of the Employee’s first day of work, April 18, 2016 (the “Effective Date”). It shall renew for successive one-year periods unless either party gives notice of an intent to not renew this Agreement at least 60 days prior to the renewal date. Notwithstanding the foregoing Section 3, this Agreement and the Employee’s employment hereunder shall be “at will” and is terminable at any time by either party, without further economic obligation beyond the termination date except as required by law.
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Section 4.
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Salary
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The Employee will receive as compensation for his duties and obligations to the Company pursuant to this Agreement during its effectiveness a base salary at the annual rate of (i) Two Hundred Forty Thousand Dollars ($240,000) during the first year after the Effective Date, (ii) Two Hundred Sixty Four Thousand ($264,000) during the second year after the Effective Date, and (iii) Two Hundred and Ninety Thousand Dollars ($290,000) during the third year after the Effective Date and thereafter, payable in substantially equal installments in accordance with the Company’s standard payroll practices. It is agreed between the parties that the Company will review the base annual salary annually and, in light of such review, may (but will not be obligated to), in the discretion of the Board of Directors of the Company or any Compensation Committee thereof, increase such applicable annual base salary taking into account any change in the Employee’s responsibilities, increases in the cost of living, performance by the Employee, and other pertinent factors. In order to secure the payment thereof, the Company shall, within 60 days, place into escrow an amount sufficient to fund the Employee’s base salary payments during the first year after the Effective Date.
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Section 5.
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Bonus
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The Employee will be eligible for an annual bonus in the form of cash or Company common stock as determined at the sole discretion of the Board of Directors of the Company or any Compensation Committee thereof.
Annual bonuses payable hereunder shall be calculated after the close of the end of the calendar year, and thereafter paid in a single lump sum by no later than the 15th day of the third month following the end of the calendar year in which the right to the bonus is no longer subject to a substantial risk of forfeiture (as defined for purposes of Internal Revenue Code Section 409A, including Treasury Regulations Section 1.409A-1(d)).
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Section 6.
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Equity Compensation
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(a) Options. As of the Effective Date or promptly thereafter following approval of the Board of Directors of the Company, the Employee will be granted non-statutory stock options to acquire 3,000,000 shares of the common stock of the Company at an exercise price of $0.90 per share (or if greater, the fair market value of such stock on the grant date). The options will vest in three equal annual installments over a three (3) year period that begins on the Effective Date (i.e. on the first, second and third anniversaries of the Effective Date) provided the Employee is then still employed by the Company. The grant of options will be memorialized in, and the options subject to, a separate option agreement to be entered into between the Employee and Company in accordance with the existing equity incentive plans of the Company. Additionally Xx. Xxxxx will receive a half of a point in options at $.90 for every $100 Million over the sale price of $300 Million for the company.
(b) Restricted Stock. As of the Effective Date or promptly thereafter following approval of the Board of Directors of the Company, the Employee will be granted 500,000 shares of the common stock of the Company, subject to certain restrictions. The restricted shares will vest in the following manner: (i) 250,000 shares shall vest immediately upon grant and (ii) 250,000 shares shall vest on the first anniversary of the Effective Date provided the Employee is then still employed by the Company. The grant of the restricted shares will be memorialized in, and the restricted shares subject to, a separate restricted stock award agreement to be entered into between the Employee and Company in accordance with the existing equity incentive plans of the Company. All shares accelerate with a sale of the company.
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Section 7.
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Employee Benefits
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Subject to any applicable probationary or similar periods, during the period of his employment with the Company, the Employee will be entitled to participate in all employee benefit programs of the Company applicable to senior officers of the Company, as such programs may be in effect from time to time. Subject to any applicable probationary or similar periods, during his period of employment with the Company, the Employee will also be entitled to participate in all retirement programs of the Company for which current employees are eligible, as such programs may be in effect from time to time (including the Company’s 401(k) plan).
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Section 8.
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Business Expenses
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All reasonable travel and other out-of-pocket expenses incidental to the rendering of services by the Employee hereunder will be paid by the Company, and, if expenses are paid in the first instance by the Employee, the Company will reimburse his therefor upon presentation of proper invoices, subject in each case to compliance with the Company’s reimbursement policies and procedures. All reimbursements will be paid in the same taxable year in which the expense is incurred, provided that expenses incurred toward the end of the calendar year that cannot administratively be reimbursed before the year end shall be reimbursed by no later than March 15th of the calendar year following the calendar year in which the expense was incurred.
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Section 9.
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Vacations and Sick Leave
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The Employee will be entitled to holidays, reasonable vacation and reasonable sick leave each year, in accordance with policies of the Company, as determined by the Board of Directors, provided, however, that the Employee will be entitled to a minimum of four (4) weeks’ vacation per year.
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Section 10.
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Confidential Information
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The Employee agrees to keep secret and retain in the strictest confidence all confidential matters which relate to the Company or any affiliate of the Company, including, without limitation, customer lists, client lists, trade secrets, pricing policies and other business affairs of the Company and any affiliate of the Company learned by his from the Company or any such affiliate or otherwise before or after the date of this Agreement, and not to disclose any such confidential matter to anyone outside the Company, or any of its affiliates, whether during or after her period of service with the Company, except as may be required in the course of a legal or governmental proceeding. Upon request by the Company, the Employee agrees to deliver promptly to the Company upon termination of his services for the Company, or at any time thereafter as the Company may request, all Company or affiliate memoranda, notes, records, reports, manuals, drawings, designs, computer files in any media and other documents (and all copies thereof) relating to the Company’s or any affiliate’s business and all property of the Company or any affiliate associated therewith, which she may then possess or have under his control.
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Section 11.
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Successors and Assigns
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This Agreement will be binding upon and inure to the benefit of the Employee, his heirs, executors, administrators and beneficiaries, and the Company and its successors and assigns.
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Section 12.
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Governing Law
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This Agreement will be governed by and construed and enforced in accordance with the laws of the State of Pennsylvania, without reference to rules relating to conflicts of law.
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Section 13.
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Entire Agreement
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This Agreement constitutes the full and complete understanding and agreement of the parties and supersedes all prior understandings and agreements as to employment of the Employee. This Agreement cannot be amended, changed, modified or terminated without the written consent of the parties hereto.
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Section 14.
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Waiver of Breach
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The waiver of either party of a breach of any term of this Agreement will not operate nor be construed as a waiver of any subsequent breach thereof.
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Section 15.
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Notices
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Any notice, report, request or other communication given under this Agreement will be written and will be effective upon delivery when delivered personally, by overnight courier or by fax. Unless otherwise notified by any of the parties, notices will be sent to the parties as follows: (i) if to the Employee, at the address set forth in the Company’s records; and (ii) if to the Company, to Virtual Piggy, Inc., 0000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx XX 00000, Attention: Board of Directors.
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Section 16.
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Severability
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If any one or more of the provisions contained in this Agreement will be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby.
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Section 17.
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Counterparts
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This Agreement may be executed in counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument. Delivery of signatures by facsimile or electronic image shall be valid for all purposes hereunder.
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Section 18.
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Internal Revenue Code Section 409A Compliance.
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(a) The parties hereto recognize that certain provisions of this Agreement may be affected by Section 409A of the Internal Revenue Code and guidance issued thereunder, and agree to amend this Agreement, or take such other action as may be necessary or advisable, to comply with Section 409A.
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(b) Notwithstanding anything herein to the contrary, it is expressly understood that at any time the Company (or any successor or related employer treated as the service recipient for purposes of Internal Revenue Code Section 409A) is publicly traded on an established securities market (as defined for purposes of Internal Revenue Code Section 409A), if a payment or provision of an amount or benefit constituting a deferral of compensation is to be made pursuant to the terms of this Agreement to the Employee on account of a Separation from Service at a time when the Employee is a Specified Employee (as defined for purposes of Internal Revenue Code Section 409A(a)(2)(B)(i)), such deferred compensation shall not be paid to the Employee prior to the date that is six (6) months after the Separation from Service or as otherwise permitted under Treasury Regulations Section 1.409A-3(i)(2).
(c) For purposes of this Agreement, the following definitions shall apply:
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(i)
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“Separation from Service” means, generally, a termination of employment with the Company (or any successor or related employer treated as the service recipient for purposes of Internal Revenue Code Section 409A), and shall have the same meaning as such term has for purposes of Internal Revenue Code Section 409A (including Treasury Regulation Section 1.409A-1(h)).
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(ii)
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“Involuntary Separation from Service” means a Separation from Service due to the independent exercise of the unilateral authority of the Company (or any successor or related employer treated as the service recipient for purposes of Internal Revenue Code Section 409A) to terminate the Employee’s employment, other than due to the Employee’s implicit or explicit request, where the Employee was willing and able to continue employment with the Company. Notwithstanding the foregoing, a termination for Good Reason may constitute an Involuntary Separation from Service. Involuntary Separation from Service shall have the same meaning as such term has for purposes of Internal Revenue Code Section 409A (including Treasury Regulation Section 1.409A-1(n)).
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[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
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The Company:
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By: ____________________________________
Name: Xxxxx Xxxxxxxxxx
Title: Secretary
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Employee:
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_______________________________________
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Xxxx Xxxxx
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