EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of November 1, 2006 to be
effective as of the date services were first rendered, by Solana Technologies,
Inc., a Nevada corporation (the “Company”) and Xxx XxXxxxxxx (the
“Executive”).
WHEREAS,
the Company desires to retain the services of a President of the Company and
the
Executive desires to render such services on the terms and conditions set forth
herein;
NOW,
THEREFORE, in consideration of the mutual promises contained herein, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Employment
Term.
The
Company employs the Executive and the Executive accepts employment by the
Company for one year, upon the terms and subject to the conditions set forth
in
this Agreement. Employment may be sooner terminated under other terms of this
Agreement. The period of the Executive’s employment by the Company hereunder is
referred to herein as the “Employment Term”.
2. Responsibilities
and Reporting.
The
Executive shall devote the Executive's time, efforts, attention and skill to,
and shall perform faithfully, loyally and efficiently the Executive's duties
as
the President of the Company. Executive shall have such responsibilities and
duties as may, from time to time, be designated by the Company. The
Executive
shall report to the Company’s Chief Executive Officer. Further, the Executive
will punctually and faithfully perform and observe all rules and regulations
which the Company may now or shall hereafter reasonably establish governing
the
Executive's conduct and the conduct of the Company's business which are
consistent with this Agreement.
3. Compensation;
Benefits.
In
consideration of the services rendered to the Company by the Executive, the
Company shall provide the Executive will the following compensation and benefits
during the Employment Term:
(a)
Salary.
(i)
The
Company will pay the Executive a salary at the annual rate of $120,000 (the
“Salary”).
(ii)
The
Salary shall be payable in accordance with the normal payroll practices of
the
Company then in effect. The Salary, and all other forms of compensation paid
to
the Executive hereunder, shall be subject to all applicable taxes required
to be
withheld by the Company pursuant to federal, state or local law. The Executive
shall be solely responsible for income taxes imposed on the Executive by reasons
of any cash or non-cash compensation and benefits provided by this Agreement.
(b)
Bonus.
The
Company will pay the Executive (together with the Company’s Vice
President-Engineering) a quarterly bonus (the “Bonus”) equal to the excess, if
any, of (x) the Applicable Percentage (as defined below) of the cumulative
earnings before interest, taxes, depreciation and amortization of the Company
(calculated without reduction for any fees paid by the Company to Monarch Bay
Management Company, LLC), as determined by Company, from the date hereof through
the end of such fiscal quarter (“Cumulative EBITDA”), minus (y) the cumulative
amount of Bonus that has been paid to Executive and the Company’s Vice
President-Engineering for prior periods. The Bonus will be payable within 45
days following the end of each fiscal quarter. The “Applicable Percentage”
means:
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%
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Cumulative
EBITDA
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20%
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if
Cumulative EBITDA is less than the product of (i) $100,000, multiplied
by
(ii) the number of quarters elapsed during Employment Term
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22%
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if
Cumulative EBITDA equals or is greater than (i) the product of
(x)
$100,000, multiplied by (y) the number of quarters elapsed during
Employment Term, and is less than (ii) the product of (x) $250,000,
multiplied by (y) the number of quarters elapsed during Employment
Term
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24%
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if
Cumulative EBITDA equals or is greater than the product of (i)
$250,000,
multiplied by (ii) the number of quarters elapsed during Employment
Term
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The
allocation of the Bonus between Executive and the Company’s Vice
President-Engineering will be determined by Executive. Bonus targets will be
adjusted, as may be agreed by the Company and Executive, for each fiscal year
beginning with the fiscal year commencing January 1, 2008.
(c)
Options.
The
Company will grant to Executive an option to purchase a number of shares of
the
Company’s common stock equal to 14% of the number of currently outstanding
shares of common stock. The exercise price of such option will be $.025 per
share. The option will vest 20% upon grant, and thereafter equally per quarter
over the next succeeding eight quarters, and, so long as you continue to be
employed by the Company. The option will remain exercisable during the
Employment Term and for a period of 90 days thereafter; provided that upon
any
termination of Executive’s employment pursuant to clause (vi) of Paragraph 4
below, the option will remain exercisable through the Expiration Date (as
defined below).
(d)
Expenses
and Benefits.
(i)
The
Executive will be entitled to the following time off from work with pay: (A)
all
legal and religious holidays, and (B) three weeks vacation per annum. The
Executive shall arrange for vacations in advance at such time or times as shall
be mutually agreeable to the Executive and the Company’s Chief Executive
Officer. The Executive may not receive pay in lieu of vacation.
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(ii)
The
Company will provide the Executive with, or reimburse the Executive for the
cost
of obtaining, medical and dental insurance for Executive. The Executive may
participate in all other employee benefit plans and/or arrangements adopted
by
the Company relating to pensions, hospital, medical, dental, disability and
life
insurance, deferred salary and savings plans, and other similar employee benefit
plans or arrangements to the extent that the Executive meets the eligibility
requirements for any such plan as in effect from time to time.
(iii)
The
Company will provide the Executive with a car allowance of $1,000 per month.
In
addition, the Company will pay, or the Executive will receive reimbursement
by
the Company, for reasonable and customary business and out-of-pocket expenses
incurred by the Executive in connection with the performance by the Executive
of
the Executive's duties under this Agreement in accordance with the Company's
policies and practices for reimbursement of such expenses, as in effect from
time to time, including, without limitation, reasonable and necessary travel,
lodging, entertainment and meals incurred by the Executive in furtherance of
the
Company's business and at the Company's request.
4. Termination
of Employment.
The
Executive's employment hereunder shall terminate upon the earliest to occur
of
any the following events, on the dates and at the times specified below:
(i)
the
close of business on the date that is two years after the effective date of
this
Agreement, unless renewed in writing by the Company and the Executive (the
“Expiration Date”);
(ii)
the
close of business on the date of the Executive's death (“Death”);
(iii)
the
close of business on the Termination Date (as defined below) specified in the
Notice of Termination (as defined below) which the Company shall have delivered
to the Executive due to the Executive's Disability. “Disability” shall mean if
(i) the Executive is absent from work for 30 calendar days in any twelve-month
period by reason of illness or incapacity whether physical or otherwise) or
(ii)
the Company reasonably determines that the Executive is unable to perform his
duties, services and responsibilities by reason of illness or incapacity
(whether physical or otherwise) for a total of 30 calendar days in any
twelve-month period during the Employment Term. The Executive agrees, in the
event of any dispute under this Section, and after receipt by the Executive
of
such Notice of Termination from the Company, to submit to a physical examination
by a licensed physician selected by the Company. The Executive may seek a second
opinion from a licensed physician acceptable to the Company. If the results
of
the first examination and the second examination are different, a licensed
physician selected by the physicians who have performed the first and second
examinations shall perform a third physical examination of the Executive, the
result of which shall be determinative for purposes of this
Section;
(iv)
the
close of business on the Termination Date specified in the Notice of Termination
which the Executive shall have delivered to the Company to terminate his
employment (“Voluntary Termination”);
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(v)
the
close of business on the Termination Date specified in the Notice of Termination
which the Company shall have delivered to the Executive to terminate the
Executive's employment for Cause. “Cause” as used herein means termination based
on (i) the Executive's material breach of this Agreement, (ii) conviction of
the
Executive for (a) any crime constituting a felony in the jurisdiction in which
committed, (b) any crime involving moral turpitude whether or not a felony),
or
(c) any other criminal act against the Company involving dishonesty or willful
misconduct intended to injure the Company (whether or not a felony), (iii)
substance abuse by the Executive, (iv) the failure or refusal of the Executive
to follow one or more lawful and proper directives of the Board of Directors
delivered to the Executive in writing, or (v) willful malfeasance or gross
misconduct by the Executive which discredits or damages the Company;
and
(vi)
the
close of business on the Termination Date specified in the Notice of Termination
which the Company shall have delivered to the Executive to terminate the
Executive's employment other than for Cause.
Any
purported termination by the Company or the Executive (other than by reason
of
Death or on the Expiration Date) shall be communicated by written Notice of
Termination to the other. As used herein, the term “Notice of Termination” shall
mean a notice which indicates the specific termination provision in this
Agreement relied upon and sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. After receipt of a Notice of
Termination related to a Voluntary Termination, the Executive shall continue
to
be available to the Company on a part-time basis at reasonable and customary
hourly rates to assist in the necessary transition.
As
used
herein, the term “Termination Date” shall mean, (i) in the case of Death, the
date of the Executive's death, (ii) in the case of expiration of the term
hereof, the Expiration Date, or (iii) in all other cases, the date specified
in
the Notice of Termination.
Upon
the
termination of Executive’s employment, the Company shall pay to the Executive
within five (5) days all sums due hereunder earned prior to or on the
Termination Date; provided that upon any termination of Executive’s employment
pursuant to clause (vi) of this Paragraph 4, the Company shall pay the Executive
the balance of the Salary payable for the period from the Termination Date
through the Expiration Date.
5. Employee
Covenants.
(a)
Trade
Secrets and Proprietary Information.
The
Executive agrees and understands that due to the Executive's position with
the
Company, the Executive will be exposed to, and has received and will receive,
confidential and proprietary information of the Company or relating to the
Company's business or affairs collectively, the “Trade Secrets”), including but
not limited to technical information, product information and formulae,
processes, business and marketing plans, strategies, customer information,
other
information concerning the Company's services or products, promotions,
development, financing, expansion plans, business policies and practices and
other forms of information considered by the Company to be proprietary and
confidential and in the nature of trade secrets. Trade Secrets shall not include
any such information which (A) was known to the Executive prior to his
employment by the Company or (B) was or becomes generally available to the
public other than disclosure by the Executive in violation of the provisions
of
this Section. Except to the extent that the proper performance of the
Executive's duties, services and responsibilities hereunder may require
disclosure, the Executive agrees that during the Employment Term and at all
times thereafter the Executive will keep such Trade Secrets confidential and
will not disclose such information, either directly or indirectly, to any third
person or entity without the prior written consent of the Company. This
confidentiality covenant has no temporal, geographical or territorial
restriction. On the Termination Date unless the Executive remains as an employee
of the Company thereafter (in which case, on the date which the Executive is
no
longer an employee of the Company), the Executive will promptly supply to the
Company all property, keys, notes, memoranda, writings, lists, files, reports,
customer lists, correspondence, tapes, disks, cards, surveys, maps, logs,
machines, technical data, formulae or any other tangible product or document
which has been produced by, received by or otherwise submitted to and retained
by the Executive in the course of his employment with the Company. Any material
breach of the terms of this Paragraph shall be considered Cause.
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(b)
Prohibited
and Competitive Activities.
The
Executive and the Company recognize that due to the nature of the Executive's
engagement hereunder and the relationship of the Executive to the Company,
the
Executive has had and will have access to, has had and will acquire, and has
assisted and may continue to assist in, developing confidential and proprietary
information relating to the business and operations of the Company and its
affiliates, including, without limitation, Trade Secrets. The Executive
acknowledges that such information has been and will be of central importance
to
the business of the Company and its affiliates and that disclosure of it to,
or
its use by, others (including, without limitation, the Executive (other than
with respect to the Company's business and affairs)) could cause substantial
loss to the Company.
The
Executive and the Company also recognize that an important part of the
Executive's duties will be to develop good will for the Company and its
affiliates through the Executive's personal contact with Clients (as defined
below), employees, and others having business relationships with the Company,
and that there is a danger that this good will, a proprietary asset of the
Company, may follow the Executive if and when the Executive's relationship
with
the Company is terminated. The Executive accordingly agrees that the Executive
will not at any time during the Employment Term or for a period of twelve months
thereafter : (A) (other than in the course of the Executive's employment)
disclose or furnish to any other person or, directly or indirectly, use for
the
Executive's own account or the account of any other person, any Trade Secrets,
no matter from where or in what manner he may have acquired such Trade Secrets,
and the Executive shall retain all such Trade Secrets in trust for the benefit
of the Company, its affiliates and the successors and assigns of any of them,
(B) directly or through one or more intermediaries, solicit for employment
or
recommend to any subsequent employer of the Executive the solicitation for
employment of, any person who, at the time of such solicitation, is employed
by
the Company or any affiliate, (C) directly or indirectly, whether for the
Executive's own account or for the account of any other person, solicit, divert,
or endeavor to entice away from the Company or any entity controlled by the
Company, or otherwise engage in any activity intended to terminate, disrupt,
or
interfere with, the Company's or any of its affiliates’ relationships with,
Clients, or otherwise adversely affect the Company's or any of its affiliates'
relationships with Clients or other business relationships of the Company or
any
affiliate thereof, or (D) publish or make any statement critical of the Company
or any shareholder or affiliate of the Company or in any way adversely affect
or
otherwise malign the business or reputation of any of the foregoing persons
(any
activity described in clause (A), (B), (C) or (D) of this Section being referred
to as a Prohibited Activity”); provided, however, that if in the written opinion
of counsel, the Executive is legally compelled to disclose Trade Secrets to
any
tribunal or else stand liable for contempt or suffer other similar censure
or
penalty, then the disclosure to such tribunal of only those Trade Secrets which
such counsel advises in writing are legally required to be disclosed shall
not
constitute a Prohibited Activity provided that the Executive shall give the
Company as much advance notice of such disclosure as is reasonably practicable.
As used herein, the term “Clients” shall mean those persons who, at any time
during the Executive's course of employment with the Company (including, without
limitation, prior to the date of this Agreement) are or were clients or
customers of the Company or any affiliate thereof or any predecessor of any
of
the foregoing.
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(c)
Remedies.
The
Executive agrees that any breach of the terms of this Section would result
in
irreparable injury and damage to the Company for which the Company would have
no
adequate remedy at law. The Executive therefore agrees that in the event of
said
breach or any threat of breach, the Company shall be entitled to an immediate
injunction and restraining order to prevent such breach and/or threatened breach
and/or continued breach by the Executive and/or any and all persons and/or
entities acting for and/or with the Executive, without having to prove damages.
The terms of this paragraph shall not prevent the Company from pursuing any
other available remedies to which the Company may be entitled at law or in
equity for any breach or threatened breach hereof, including but not limited
to
the recovery of damages from the Executive. The provisions of this Section
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shall survive any termination of this Agreement.
(d)
Proprietary
Information and Inventions.
The
Executive agrees that any and all inventions, discoveries, improvements,
processes, formulae, business application software, patents, copyrights and
trademarks made, developed, discovered or acquired by him prior to and during
the Employment Term, solely or jointly with others or otherwise, which relate
to
the business of the Company, and all knowledge possessed by the Executive
relating thereto collectively, the “Inventions”), shall be fully and promptly
disclosed to the Board of Directors and to such person or persons as the Board
of Directors shall direct and the Executive irrevocably assigns to the Company
all of the Executive's right, title and interest in and to all Inventions of
the
Company and all such Inventions shall be the sole and absolute property of
the
Company and the Company shall be the sole and absolute owner thereof. The
Executive agrees that he will at all times keep all Inventions secret from
everyone except the Company and such persons as the Board of Directors may
from
time to time direct. The Executive shall, as requested by the Company at any
time and from time to time, whether prior to or after the expiration of the
Employment Term, execute and deliver to the Company any instruments deemed
necessary by the Company to effect disclosure and assignment of the Inventions
to the Company or its designees and any patent applications (United States
or
foreign) and renewals with respect thereto, including any other instruments
deemed necessary by the Company for the prosecution of patent applications,
the
acquisition of letters patent and/or the acquisition of patents or copyrights
in
any and all countries and to vest title thereto in the Company or its
nominee.
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6. Representations
and Warranties of the Executive.
The
Executive represents and warrants to the Company that:
(i)
The
Executive's employment by the Company as contemplated will not conflict with,
and will not be constrained by, any prior or current employment, consulting
agreement or relationship, whether written or oral; and
(ii)
The
Executive does not possess confidential information arising out of any
employment, consulting agreement or relationship with any person or entity
other
than the Company which could be utilized in connection with the Executive's
employment by the Company.
7. Binding
Effect or Assignment. This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective heirs, executors, representatives, estates, successors and
assigns, including any successor or assign to all or substantially all of the
business and/or assets of the Company, whether direct or indirect, by purchase,
merger, consolidation, acquisition of stock, or otherwise; provided, however,
that no party hereto shall assign all or any portion of the such party’s rights
or obligations under this Agreement without the prior written consent of the
other party.
8. Notices.
All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made as of the date
delivered, mailed or transmitted, and shall be effective upon
receipt.
9. Amendment
and Modification.
No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by each
of
the Executive and the Company. No such waiver or discharge by either party
hereto at any time or any waiver or discharge of any breach by the other party
hereto of, or compliance with, any condition or provision of this agreement
to
be performed by such other party, shall be deemed a waiver or discharge of
similar or dissimilar provisions or conditions, or a waiver or discharge of
any
breach of any provisions, at the same or at any prior or subsequent
time.
10. Governing
Law. This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of California without giving effect to the conflict of law principles
of
that state.
11. Severability.
In the
event that any one or more of the provisions of this Agreement shall be held
to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other portion of this Agreement, and
this Agreement shall be construed as if such provision had never been contained
herein.
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12. Withholding
Taxes.
Notwithstanding anything contained herein to the contrary, all payments required
to be made hereunder by the Company to the Executive, or his estate or
beneficiaries, shall be subject to the withholding of such amounts as the
Company may reasonably determine it should withhold pursuant to any applicable
federal, state or local law or regulation.
13. Arbitration
of Disputes. The
parties hereto mutually consent to the resolution by arbitration of all claims
and controversies arising out of or relating to this Agreement.
14. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original, but all of which together shall constitute one and
the
same instrument.
15. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties and supersedes
any and all prior agreements, written or oral, understandings and arrangements,
either oral or written, between the parties with respect to the subject matter,
and shall, as of the date hereof, constitute the only employment agreement
between the parties.
16. Further
Assurances.
Each
party shall do and perform, or cause to be done and performed, all further
acts
and things and shall execute and deliver all other agreements, certificates,
instruments, and documents as any other party reasonably may request in order
to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated.
17. Construction.
The
headings in this Agreement are for reference purposes only and shall not limit
or otherwise affect the meaning or interpretation of this
Agreement.
[continued
on following page]
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IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be executed
as of
the date first above written.
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“Company”
Solana
Technologies, Inc.
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| By: | ||
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Name:
Xxxxx Xxxxxxx
Title:
Chairman and Chief Executive Officer
“Executive”
Xxx
XxXxxxxxx
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| By: |
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