EMPLOYMENT AGREEMENT
THIS
AGREEMENT
is dated
February 8, 2008 (the “Effective
Date”)
by and
between GEEKS
ON CALL HOLDINGS, INC, a
Delaware corporation (“GEEKS
ON CALL”)
and
XXXXXXX
XXXX
(“Executive”).
In
consideration of the mutual covenants contained herein, and for such other
good
and valuable consideration, the receipt and sufficiency of which are hereby
conclusively acknowledged, the parties, intending to be legally bound, agree
as
follows:
1. Employment
and Duties.
GEEKS ON
CALL hereby agrees to employ Executive as the Chief Executive Officer of GEEKS
ON CALL (the “CEO”), and Executive hereby accepts such employment, on the terms
and conditions hereinafter set forth. During the Employment Period (as defined
below), Executive shall serve as CEO and shall report to the Board of Directors
of the Company (the “Board”). Executive shall have those powers and duties
customarily associated with the position of CEO of entities comparable to GEEKS
ON CALL and such other powers and duties as may be prescribed by the
Board.
2. Term.
The term
of this Agreement (the “Term”) shall commence on the Effective Date and run for
a term of 5 years. This Term may be extended by the mutual agreement of both
parties unless the Executive is terminated as provided in Section 6 (the
“Employment
Period”).
3. Extent
of Services.
During
the Term and any extension thereof, Executive shall devote his full time and
efforts to the performance, to the best of his abilities, of such duties and
responsibilities, as described in Section 1 above, and as the Board shall
determine, consistent therewith.
4. Compensation.
(a) Salary.
Executive shall be paid Two Hundred Seventy-Five Thousand Dollars ($275,000.00)
on an annualized basis (the “Base
Salary”)
in
accordance with GEEKS ON CALL’s normal payroll practices, and subject to all
lawfully required withholding. The base salary may be increased annually as
determined by the Board in its sole discretion; provided, however, that the
Base
Salary shall be increased on each anniversary of the Effective Date by a
cost-of-living increase of not less than 3% of the prior year’s Base
Salary.
(b) Bonus.
In
addition to the Base Salary, the Board and the Executive will agree upon
milestones for bonus achievement. The actual bonus amount will be determined
by
the Board in consultation with the Executive.
(c) Executive
Participation in GEEKS ON CALL Staff Benefits Plans.
Following the Effective Date, Executive shall be entitled to participate in
any
group health programs and other benefit plans, which may be instituted from
time-to-time for GEEKS ON CALL employees, and for which Executive qualifies
under the terms of such plans and an annual physical at the Executive Evaluation
Center, Norfolk, VA. All such benefits shall be provided on the same terms
and
conditions as generally apply to all other GEEKS ON CALL employees under these
plans and may be modified by GEEKS ON CALL from time-to-time.
(d) Expenses.
Executive shall be reimbursed by GEEKS ON CALL for all ordinary, reasonable,
customary and necessary expenses incurred by him in the performance of his
duties and responsibilities. Executive agrees to prepare documentation for
such
expenses as may be necessary for GEEKS ON CALL to comply with the applicable
rules and regulations of the Internal Revenue Service.
(e) Equity
Awards.
(i) Stock
Options.
Immediately following consummation of GEEKS ON CALL’S contemplated reverse
merger transaction with a to-be-identified public company (such transaction
referred to herein as the “Reverse Merger”; and the entity which results from
the Reverse Merger referred to herein as the “Merged Entity”), the Merged Entity
shall grant Executive options to purchase 1,000,000 shares of the Merged
Entity’s common stock (“Options”), pursuant to an Equity Incentive Plan to be
adopted by the Merged Entity (the “Incentive Plan”). Such grant shall be
evidenced by an Option Agreement, as contemplated by the Incentive Plan. The
per
share exercise price of the Options shall be $1.00, which represents the
contemplated fair market value per share of the Merged Entity’s common stock on
the date of the contemplated Reverse Merger. The term of the Option shall be
six
years from the Effective Date. Twenty-Percent (20%) of the Options shall become
exercisable immediately and Twenty Percent (20%) of the remaining Options shall
become exercisable on each anniversary of the Effective Date that Executive
remains employed by the Merged Entity. Upon a change of control, defined as
a
change of a controlling interest in the Merged Entity (over 50% of the voting
shares) all unvested Options will immediately vest.
(ii) Future
Grants.
Executive shall be eligible for grants of Options, restricted stock and other
permissible awards under the Incentive Plan, as the Board or Compensation
Committee of the Merged Entity shall, in its absolute and sole discretion,
determine.
(f) Automobile.
During
the Term, GEEKS ON CALL shall also provide Executive with the use of a company
automobile satisfactory to Executive.
5. Vacation.
At full
pay and without any adverse effect to his compensation, provided all other
terms
and conditions of this Agreement are satisfied, Executive shall be entitled
to
four (4) weeks of vacation for each full calendar year during the term of this
Agreement.
6. Termination.
Executive’s employment by GEEKS ON CALL shall terminate under the following
circumstances:
(a) Death.
If
Executive dies, Executive’s employment shall be terminated effective as of the
end of the calendar month during which Executive died.
(b) Disability.
In the
event Executive, by reason of physical or mental incapacity, shall be
substantially unable to perform his duties hereunder for a period of three
(3)
consecutive months, or for a cumulative period of six (6) months within any
twelve (12) month period (such incapacity deemed to be “Disability”), GEEKS ON
CALL shall have an option, at any time thereafter, to terminate Executive’s
employment hereunder as a result of such Disability. Such termination will
be
effective ten (10) days after the Board gives written notice of such termination
to Executive, unless Executive shall have returned to the full performance
of
his duties prior to the effective date of the notice. Upon such termination,
Executive shall be entitled to any benefits as to which he and his dependents
are entitled by law, and except as otherwise expressly provided herein, all
obligations of GEEKS ON CALL hereunder shall cease upon the effectiveness of
such termination other than payment of salary earned through the date of
Disability, provided that such termination shall not affect or impair any rights
Executive may have under any policy of long term disability insurance or
benefits then maintained on his behalf by GEEKS ON CALL. Executive’s base salary
shall continue to be paid during any period of incapacity prior to and including
the date on which Executive’s employment is terminated for
Disability.
(c) Cause.
GEEKS
ON CALL shall have the right to terminate Executive's employment for “Cause.”
For purposes of this Agreement, “Cause” shall mean:
(i) the
willful or continued failure by Executive to substantially perform his duties,
including, but not limited to, acts of fraud, willful misconduct, gross
negligence or other act of dishonesty;
(ii) a
material violation or material breach of this Agreement which is not cured
within 30 days written notice to Executive;
(iii) misappropriation
of funds, properties or assets of GEEKS ON CALL by Executive or any action
which
has a materially adverse effect on GEEKS ON CALL or its business;
(iv) the
conviction of, or plea of guilty or no contest to, a felony or any other crime
involving moral turpitude, fraud, theft, embezzlement or dishonesty; or
(v) abuse
of
drugs or alcohol which impairs Executive’s ability to perform his duties as set
forth in Section 1 above.
(d) Good
Reason.
Executive may terminate his employment for “Good Reason.” For purposes of this
Agreement, “Good Reason” shall mean: (i) a material diminution of Executive’s
authority or duties with GEEKS ON CALL (other than as a result of Executive’s
incapacity or disability); (ii) a reduction in Executive’s base salary; or (iii)
if Executive must relocate his principal office more than one hundred (100)
miles from any office that the Company is then maintaining for Executive as
Executive’s principal office. Prior to Executive terminating his employment with
GEEKS ON CALL for “Good Reason,” Executive must provide written notice to GEEKS
ON CALL that such “Good Reason” exists and setting forth, in detail, the grounds
Executive believes constitutes such “Good Reason” (a “Good Reason Notice”). If
GEEKS ON CALL does not cure the grounds upon which Executive believes “Good
Reason” exists within thirty (30) days after being provided with notice by
Executive, then Executive’s employment shall be deemed
terminated.
(e) Without
Cause.
GEEKS
ON CALL shall have the right to terminate Executive’s employment hereunder
without cause at any time by providing Executive with written notice of such
termination, which termination shall take effect 10 days after the date such
notice is provided.
(f) Voluntary
Resignation.
Executive shall have the right to terminate his employment hereunder by
providing GEEKS ON CALL with a written notice of resignation. Such notice must
be provided 60 days prior to the date upon which Executive wishes such
resignation to be effective. Upon receipt of such resignation, GEEKS ON CALL
shall have the option to accelerate the resignation to a date prior to the
expiration of the 60 day period.
7. Payments
Due Upon Termination.
In the
event Executive’s employment is terminated pursuant to Section 6(d) or (e)
above, then (i) any unvested Options held by Executive shall immediately vest,
(ii) GEEKS ON CALL shall continue pay to Executive his base salary as in effect
on the date of termination for a period of eighteen (18) months and
(iii) GEEKS ON CALL shall reimburse Executive for the costs of obtaining
comparable medical benefits for eighteen (18) months, unless Executive obtains
other employment which provides for comparable medical benefits as Executive
received while employed by GEEKS ON CALL. In the event Executive’s employment is
terminated for any other reason, then Executive shall be entitled to receive
his
base salary though the effective date of termination and GEEKS ON CALL shall
reimburse Executive for any reasonable expenses previously incurred for which
Executive had not been reimbursed prior to the termination of employment.
Executive acknowledges and agrees that prior to receiving any payments under
this Section, and as a material condition thereof, Executive shall, if requested
by GEEKS ON CALL, sign and agree to be bound by a general release of claims
against GEEKS ON CALL related to Executive’s employment (and termination of
employment) with GEEKS ON CALL in such form as GEEKS ON CALL may deem
appropriate. Upon Executive’s termination of employment for any reason, upon the
request of the Board, he shall resign any memberships or positions that he
then
holds with GEEKS ON CALL.
8. Surrender
of Books and Papers.
Upon
termination of this Agreement (irrespective of the time, manner, or cause of
termination, be it for cause or otherwise), Executive shall immediately
surrender to GEEKS ON CALL all books, records, or other written papers or
documents entrusted to him or which he has otherwise acquired pertaining to
GEEKS ON CALL and all other GEEKS ON CALL property in Executive’s possession,
custody or control.
9. Inventions
and Patents.
Executive agrees that Executive will promptly from time-to-time fully inform
and
disclose to GEEKS ON CALL any and all ideas, concepts, copyrights, copyrightable
material, developments, inventions, designs, improvements and discoveries of
whatever nature that Executive may have or produce during the term of
Executive’s employment under this Agreement that pertain or relate to the then
current business of GEEKS ON CALL (the “Creations”), whether conceived by
Executive alone or with others and whether or not conceived during regular
working hours. All Creations shall be the exclusive property of GEEKS ON CALL
and shall be “works made for hire” as defined in 17 U.S.C. §101, and GEEKS ON
CALL shall own all rights in and to the Creations throughout the world, without
payment of royalty or other consideration to Executive or anyone claiming
through Executive. Executive hereby transfers and assigns to GEEKS ON CALL
(or
its designee) all right, title and interest in and to every Creation. Executive
shall assist GEEKS ON CALL in obtaining patents or copyrights on all such
inventions, designs, improvements and discoveries being patentable or
copyrightable by Executive or GEEKS ON CALL and shall execute all documents
and
do all things necessary to obtain letters of patent or copyright, vest the
GEEKS
ON CALL with full and exclusive title thereto, and protect the same against
infringement by others, and such assistance shall be given by Executive, if
needed, after termination of this Agreement for whatever cause or reason.
Executive hereby represents and warrants that Executive has no current or future
obligation with respect to the assignment or disclosure of any or all
developments, inventions, designs, improvements and discoveries of whatever
nature to any previous Employer, entity or other person and that Executive
does
not claim any rights or interest in or to any previous unpatented or
uncopyrighted developments, inventions, designs, improvements or
discoveries.
10. Trade
Secrets, Non-Competition and Non-Solicitation.
(a) Trade
Secrets.
Contemporaneous with the execution of this Agreement and during the term of
employment under this Agreement, GEEKS ON CALL shall deliver to Executive or
permit Executive to have access to and become familiar with various confidential
information and trade secrets of GEEKS ON CALL, including without limitation,
data, production methods, customer lists, product format or developments, other
information concerning the business of GEEKS ON CALL and other unique processes,
procedures, services and products of GEEKS ON CALL, which are regularly used
in
the operation of the business of the GEEKS ON CALL (the “Confidential
Information”). Executive shall not disclose any of the Confidential Information
that he receives from GEEKS ON CALL, or their clients and customers in the
course of his employment with GEEKS ON CALL, directly or indirectly, nor use
it
in any way, either during the term of this Agreement or at any time thereafter,
except as required in the course of employment with GEEKS ON CALL. Executive
further acknowledges and agrees that Executive owes GEEKS ON CALL, a fiduciary
duty to preserve and protect all Confidential Information from unauthorized
disclosure or unauthorized use. All files, records, documents, drawings,
graphics, processes, specifications, equipment and similar items relating to
the
business of GEEKS ON CALL, whether prepared by Executive or otherwise coming
into Executive’s possession in the course of his employment with GEEKS ON CALL,
shall remain the exclusive property of GEEKS ON CALL and shall not be removed
from the premises of GEEKS ON CALL without the prior written consent of GEEKS
ON
CALL unless removed in relation to the performance of Executive’s duties under
this Agreement. Any such files, records, documents, drawings, graphics,
specifications, equipment and similar items, and any and all copies of such
materials which have been removed from the premises of GEEKS ON CALL, shall
be
returned by Executive to GEEKS ON CALL. Executive further acknowledges that
the
covenants of Executive herein are intended to include the protection of the
confidential information of each of GEEKS ON CALL’s customers and clients, that
come into the possession of Executive as a result of his employment with GEEKS
ON CALL, and that such customers and clients of GEEKS ON CALL shall be entitled
to rely on and enforce these covenants against Executive for their own
benefit.
5
(b) Non-Competition.
Executive acknowledges that he will be provided with and have access to the
Confidential Information, the unauthorized use or disclosure of which would
cause irreparable injury to GEEKS ON CALL, willingness to enter into this
Agreement is based in material part on Executive’s agreement to the provisions
of this Section 10(b)
and that
Executive’s breach of the provisions of this Section would materially and
irreparably damage GEEKS ON CALL. In consideration for GEEKS ON CALL’s
disclosure of Confidential Information to Executive, Executive’s access to the
Confidential Information, and the salary paid to executive by GEEKS ON CALL
hereunder, Executive agrees that during the term of Executive’s employment with
GEEKS ON CALL under this Agreement and for eighteen (18) months after the
termination of Executive’s employment and regardless whether such termination is
with or without cause, Executive shall not, directly or indirectly, either
as an
executive, employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director, advisor or in any other individual
or
representative capacity, engage or participate in any business that is in
competition in any manner whatsoever with the Restricted Business. GEEKS ON
CALL
has committed and deployed, or undertaken significant development of, its
managed solution. “Restricted Business” means any business conducted by GEEKS ON
CALL, either itself or through GEEKS ON CALL at any time prior to, or during
Executive’s employment pursuant to this Agreement.
(c) Reasonableness
of Restrictions.
Executive acknowledges that the restrictions set forth in Section
10(b)
of this
Agreement are reasonable in scope and necessary for the protection of the
business and goodwill of GEEKS ON CALL. Executive agrees that should any portion
of the covenants in Section
10
be
unenforceable because of the scope thereof or the period covered thereby or
otherwise, the covenant shall be deemed to be reduced and limited to enable
it
to be enforced to the maximum extent permissible under the laws and public
policies applied in the jurisdiction in which enforcement is
sought.
(d) Soliciting
Executives.
Executive shall not during the term of this Agreement or for a period of
eighteen (18) months after termination of Executive’s employment hereunder for
any reason, whether by resignation, discharge or otherwise, either directly
or
indirectly, employ, enter into agreement with, or solicit the employment of,
any
employee of GEEKS ON CALL for the purpose of causing them to leave the
employment of GEEKS ON CALL or take employment with any business that is in
competition in any manner whatsoever with the business of GEEKS ON
CALL.
(e) Injunctive
Relief; Extension of Restrictive Period.
In the
event of a breach of any of the covenants by Executive or GEEKS ON CALL
contained in this Agreement, it is understood that damages will be difficult
to
ascertain, and either party may petition a court of law or equity for injunctive
relief in addition to any other relief which Executive or GEEKS ON CALL may
have
under the law, including but not limited to reasonable attorneys’
fees.
11. Miscellaneous.
(a) This
Agreement shall be binding upon the parties and their respective heirs,
executors, administrators, successors and assigns. Executive shall not assign
any part of his rights under this Agreement without the prior written consent
of
GEEKS ON CALL.
(b) This
Agreement contains the entire agreement and understanding between the parties
and supersedes any and all prior understandings and agreements between the
parties regarding Executive’s employment.
(c) No
modification hereof shall be binding unless made in writing and signed by the
party against whom enforcement is sought. No waiver of any provisions of this
Agreement shall be valid unless the same is in writing and signed by the party
against whom it is sought to be enforced, unless it can be shown through custom,
usage or course of action.
(d) This
Agreement is executed in, and it is the intention of the parties hereto that
it
shall be governed by, the laws of the State of Virginia without giving effect
to
applicable conflict of laws provisions.
(e) The
provisions of this Agreement shall be deemed to be severable, and the invalidity
or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
(f) Any
notice or communication permitted or required by this Agreement shall be in
writing and shall become effective upon personal service, or service by wire
transmission, which has been acknowledged by the other party as being received,
or two (2) days after its mailing by certified mail, return receipt requested,
postage prepaid addressed as follows:
| (1) |
If
to GEEKS ON CALL:
|
Human
Resources Director
000
Xxxxxxxxxx Xxxx
Xxxxx
000
Xxxxxxx,
XX 00000
|
With
a copy to:
|
Xxxxxx
X.
Xxxxxx, Esq.
Xxxxxx
and Xxxxx, LLP
000
Xxxx
00xx Xxxxxx, Xxxxx 0000
Xxx
Xxxx,
Xxx Xxxx 00000
Fax:
000-000-0000
| (2) |
If
to Executive, to:
|
Xxxxxxx
X. Xxxx
0000
Xxxxxx Xxxxx Xxxxx
Xxxxxxxx
Xxxxx, XX 00000
(g)Non-Disparagement.
Both
parties acknowledge and agree not to defame or publicly criticize the services,
business, integrity, veracity or personal or professional reputation of the
other, in either a professional or personal manner, at any time during or
following the employment period. With respect to GEEKS ON CALL, this shall
include any officers, directors, partners, executives, employees,
representatives or agents of GEEKS ON CALL, or of the Merged
Entity.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF,
GEEKS
ON CALL and Executive have executed this Agreement
as of the Effective Date.
|
EXECUTIVE
|
||
|
By:
/s/ Xxxxxx
Xxxxx
|
/s/
Xxxxxxx X.
Xxxx
|
|
|
Xxxxxxx
X. Xxxx
|
||
|
Title:
Secretary
|
