EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of August 1, 2007 (the "Effective Date") by and between Modavox, Inc., a
Delaware corporation ("Employer"), and Xxxxx X. Xxxxxxxx, an individual
("Executive").
Executive has worked for Employer for some time in various capacities,
and both parties wish to modify the previous relationship and provide new mutual
promises and assurances that will define the nature and terms and conditions of
their continuing relationship. The recitals stated in this paragraph and the
mutual promises, acknowledgments and representations contained herein, the
parties agree as follows:
1. Employment and Duties. Executive will work exclusively and on a
full-time basis for Employer and shall devote his best efforts to accomplishing
the goals and objectives established by Employer's CEO and the Board of
Directors of Employer (the "Board"). Unless excused by the CEO, failure to
accomplish the goals and objectives established by Employer's CEO or the Board
shall be deemed a breach of this Agreement by Executive. Executive's title shall
be Chief Information Officer, in which capacity Executive shall have general
responsibility for Employer's intellectual property, computer systems and
information and other technologies that support Employer's goals, subject to the
direction and control of the CEO. Executive shall also provide direction and
assistance to other employees of Employer with respect to technology related
issues and perform such other duties related to Employer's intellectual
property, computer systems and information and other technologies as may be
assigned to him from time to time by the CEO. Executive shall report to the CEO
and shall present all issues of policy or strategy to the CEO for decision.
Executive's title and duties may be changed from time to time in the CEO's
discretion.
2. Term. Employment under this Agreement shall commence on the
effective date and shall continue for a period of one year, unless earlier
terminated as set forth in Section 5 below. Thereafter, this Agreement shall
automatically renew for additional one-year terms unless either party gives the
other written notice of non-renewal at least 30 days prior to the expiration of
the initial term or any renewal term.
3. Compensation.
(a) Base Salary. Employer agrees to pay Executive a base salary,
before deducting all applicable withholdings, at the rate of $105,000 per year,
which shall be payable in accordance with Employer's standard payroll policies
as they may be revised from time to time. Employer shall consider increases in
the annual rate of pay to be effective on August 1st of each year, commencing
August 1, 2008, but whether any increase occurs shall be up to the CEO or Board
acting in its sole discretion. Employer reserves the right to adjust Executives
compensation based on goals set forth by CEO or Board of Directors.
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(b) Incentive Bonus. Executive shall be entitled to participate
in a bonus plan for Employer's executives. By meeting specific objectives
established by the CEO, Executive may be able to earn, in addition to his base
salary, an incentive bonus of up to 20% of Executive's base salary per year
based one-half on Executive's individual performance, (as evaluated by the CEO)
and one-half on achieving budgeted pre-tax income goals for the company or a
specified division in which executive is involved. This incentive bonus will be
paid on an annual basis not later than August 15th of each following year.
Employer reserves the right to adjust Executives compensation based on goals set
forth by CEO or Board of Directors.
(c) Stock Options. In the discretion of the Board or Compensation
Committee of the Board, Executive may also be entitled to receive options to
acquire shares of the common stock of Employer at the fair market value of such
common stock at the time of grant. The options will be granted from an option
plan maintained by Employer and will be subject to Employer's standard terms of
grant.
4. Benefits. In addition to the compensation described above, while
Executive is employed, Employer shall provide Executive the benefits described
in this Section. All benefits shall terminate upon expiration or termination of
this Agreement and, except as specifically stated herein, unused benefits shall
have no cash value and shall not be compensated to Executive upon termination or
expiration of this Agreement.
(a) Health and Medical Insurance. Employer shall pay for and
provide Executive with the same types of health, medical, dental and vision
insurance, if any, as are provided from time to time to all Employer's
executive-level employees.
(b) Life Insurance. Employer may purchase a term life insurance
policy on Executive's life, with benefits payable to Employer and Employee
designate. Executive agrees to cooperate with Employer's efforts to obtain any
such policy.
(c) Vacation. Executive shall be entitled to two weeks (10
business days) vacation time annually. Executive may accumulate his unused
vacation time up to a maximum of four weeks, and any such accrued, but unused
vacation time, shall be the basis for cash compensation upon the termination of
Executive's employment.
(d) Expense Reimbursement. Employer shall, upon receipt of
appropriate documentation, reimburse Executive for his reasonable travel,
lodging and other ordinary and necessary business expenses consistent with
Employer's policies as in effect from time to time. Reimbursement for air travel
shall be limited to economy fares. Reimbursement for hotel stays shall be at the
lower of standard, or actual, room rates. All travel bonus miles and points
shall accrue to the benefit of Executive. Reimbursement for travel by private
automobile shall be at U.S. Government (GSA) rates, as adjusted from time to
time, but no reimbursement shall be made for commuting between any residence of
Executive and Executive's principal office at Employer's facilities. Employee
with adhere to company policy related to expense reimbursement as outlined in
Employers Company Handbook.
(e) 401(k) Program. Executive will be eligible to participate in
Employer's 401(k) retirement program under the same terms as those applicable to
Employer's other employees.
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5. Termination. The Board may terminate Executive's employment at any
time in the manner provided herein. Executive may terminate Executive's
employment at any time upon delivery of 30 days written notice. If Executive is
serving as a member of Employer's Board, Executive agrees to resign from the
Board immediately upon termination of his employment under this Agreement. This
Agreement shall survive the termination of Executive's employment to the extent
reasonably contemplated by the terms hereof.
(a) Notice of Non-Renewal. Notice of non-renewal shall be given
in writing at least 30 days prior to expiration of the then current term, in
which case, this Agreement shall not be automatically renewed and shall
terminate upon expiration of the then current term.
(b) For Cause. Employer may terminate this Agreement for Cause
immediately by giving written notice to Executive stating the facts constituting
such Cause. If Executive is terminated for Cause, Employer shall be obligated to
pay Executive base salary at the current rate due him through the date of
termination. For purposes of this section, "Cause" shall include: (1) material
neglect of duties; (2) material failure to abide by the instructions or policies
established by Employer or the Board; (3) Executive's material breach of this
Agreement; (4) breach by Executive of any other material obligation to Employer;
(5) the appropriation (or attempted appropriation) of a material business
opportunity of Employer, including attempting to secure or securing any personal
profit in connection with any transaction entered into on behalf of Employer;
(6) the misappropriation (or attempted misappropriation) of any of Employer's
funds or property; (7) the conviction of (or its procedural equivalent) or the
entering of a guilty plea or plea of no contest with respect to, a felony, or
any other crime; (8) any willful or grossly negligent act that results in a
misstatement in Employer's books of account; (9) any act or affiliation that
causes or could cause Employer to lose public trust and confidence, market
share, or respect; or (10) refusal to take or failure to pass a drug or alcohol
test as required by Employer's policies.
(c) Without Cause. Employer may terminate this Agreement at any
time immediately, without cause, by giving written notice to Executive. Within
72 hours after execution by Executive of a severance agreement and release
having commercially reasonable terms, Employer shall pay to Executive the base
salary due him through the date of termination plus an amount equal to base
salary for the remaining months of the agreement, not to exceed twelve total
months, less applicable withholdings. At it's sole discretion, the Board may
provide additional compensation or benefits upon termination without cause.
(d) Incapacity. If during the term of this Agreement, Executive
is unable to perform the essential duties described herein with or without a
reasonable accommodation due to illness or other incapacity Employer shall have
the right to terminate this Agreement without further obligation hereunder
except for any amounts payable pursuant to disability plans, if any, generally
applicable to Employer's employees.
(e) Death. If Executive dies during the term of this Agreement,
this Agreement shall terminate immediately, and Executive's legal
representatives shall be entitled to receive the base salary due Executive
through the end of the month in which death occurs, and any other death benefits
generally applicable to executive employees.
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6. Nondisclosure of Proprietary Information. Employer invents,
develops, manufactures and markets processes and products that involve
experimental or inventive work. Employer's success depends upon the protection
of these processes and products by patent or by secrecy. Executive has had, or
may have, access to Employer's "Proprietary Information." Access to this
Proprietary Information is given to Executive only because Executive agrees to
keep that information secret as follows:
(a) "Proprietary Information" shall mean: (a) any and all
methods, inventions, improvements, information, data or discoveries, whether or
not patentable, that are secret, proprietary, confidential or generally
undisclosed, (including information originated or provided by Executive) in any
area of knowledge, including information concerning trade secrets, processes,
software, products, patents, inventions, formulae, apparatus, techniques,
technical data, improvements, specifications, servicing, attributes and relative
attributes relating to any of Employer's equipment, devices, processes or
products; and (b) the identities of Employer's customers and potential customers
("Customers") including Customers Executive successfully cultivates or maintains
during his employment under this Agreement using Employer's products, name or
infrastructure; the identities of contact persons at Customers; the preferences,
likes, dislikes and technical and other requirements of Customers and contact
persons with respect to product types, pricing, sales calls, timing, sales
terms, rental terms, lease terms, service plans, and other marketing terms and
techniques; Employer's business methods, practices, strategies, forecasts,
know-how, pricing, and marketing plans and techniques; the identity of key
accounts; the identity of potential key accounts; and the identities of
Employer's key Customer representatives and employees. Proprietary Information
shall not be deemed to include (a) information that was known to Executive on a
nonconfidential basis prior to his employment under this Agreement or (b)
information that is or hereafter becomes known to the general public without a
breach or fault on the part of Executive.
(b) Executive acknowledges that Employer has exclusive property
rights to all Proprietary Information and Executive hereby assigns all rights he
might otherwise possess in any Proprietary Information to Employer. Except as
required in the performance of the duties of his employment with Employer,
Executive will not at any time during or after the term of this Agreement,
without the prior written consent of Employer, directly or indirectly use,
communicate, disclose, disseminate, lecture upon, publish articles or otherwise
put in the public domain, any Proprietary Information or any other information
of a secret, proprietary, confidential or general undisclosed nature relating to
Employer, its products, Customers, processes or services, including information
relating to testing, research, development, manufacturing, marketing or selling.
(c) All documents, records, notebooks, notes, memoranda,
databases, electronic storage devices and similar repositories containing
Proprietary Information made or compiled by Executive at any time, including any
and all copies thereof, are and shall be the property of Employer, shall be held
by Executive in trust solely for the benefit of Employer, and shall be delivered
to Employer by him upon termination of this Agreement or at any other time upon
the request of Employer.
(d) Executive agrees to certify in writing upon termination of
this Agreement that Executive no longer has in Executive's possession, custody
or control any copies of any business documents generated at or relating to
Employer nor any Proprietary Information, whether in hard copy, on a computer's
hard drive, on disks or electronic storage devices or in any other form or
media.
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(e) Executive agrees to provide notification, at the start of any
new engagement or employment, to all subsequent employers or contracting parties
who are involved in any way in the same industries as Employer or are otherwise
Employer's competitors or potential competitors, of the terms and conditions of
this Agreement, along with a copy of this Agreement.
7. Inventions.
(a) For purposes of this, the term "Inventions" shall mean
discoveries, concepts, and ideas, whether patentable or not, including
improvements, know-how, data, processes, methods, formulae, and techniques,
concerning any past, present or prospective Employer activities that Executive
makes, discovers or conceives (whether or not during his normal employment hours
or with the use of Employer's facilities, materials or personnel), either solely
or jointly with others during his employment by Employer and, if based on or
related to Proprietary Information, at any time after termination of such
employment. All Inventions shall be solely the property of Employer and
Executive agrees to perform the requirements of this Section with respect
thereto without the payment by Employer of any royalty or any consideration
other than as provided in this Agreement.
(b) Executive shall maintain written notebooks in which he or she
shall set forth on a current basis information as to all Inventions describing
in detail the procedures employed and the results achieved as well as
information as to any studies or research projects undertaken on Employer's
behalf, whether or not in Executive's opinion a given project has resulted in an
Invention. The written notebooks shall at all times be the property of Employer
and shall be surrendered to Employer upon termination of employment upon request
of Employer.
(c) Executive shall apply, at Employer's request and expense, for
United States and foreign patents either in Executive's name or otherwise as
Employer shall desire.
(d) Executive hereby assigns to Employer all rights to
Inventions, and to applications for United States and/or foreign patents and to
United States and/or foreign patents granted upon Inventions.
(e) Executive shall acknowledge and deliver promptly to Employer
without charge to Employer but at its expense such written instruments
(including applications and assignments) and do such other acts, such as giving
testimony in support of Executive's inventorship, as may be necessary in the
opinion of Employer to obtain, maintain, extend, reissue and enforce United
States and/or foreign patents relating to the Inventions and to vest the entire
right and title thereto in Employer or its nominee.
(f) Executive's obligation to assist Employer in obtaining and
enforcing patents for Inventions in any and all countries shall continue beyond
employment, but after the termination of Executive's employment, Employer shall
compensate Executive at a reasonable rate for time actually spent at Employer's
request on such assistance. If Employer is unable for any reason whatsoever to
secure Executive's signature to any lawful and necessary document required to
apply for or execute any patent application with respect to any Inventions,
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including renewals, extensions, continuations, division or continuations in part
thereof, Executive hereby irrevocably designates and appoints Employer and its
duly authorized officers and agents, as his agents and attorneys-in-fact to act
for and in his behalf and instead of Executive, to execute and file any
application and to do all other lawful permitted acts to further the prosecution
and issuance of patents with the same legal force and effect as if executed by
Executive.
(g) As a matter of record, Executive has identified on Exhibit A
attached hereto all inventions or improvements relevant to the activity of
Employer which have been made or conceived or first reduced to practice by
Executive alone or jointly with others prior to his employment by Employer, that
he desires to remove from the operation of this section and Executive covenants
that such list is complete. If there is no such list or if no Exhibit A is
attached, Executive represents that he has made no such inventions and
improvements at the time of signing this Agreement.
(h) Executive will not assert any rights under any inventions,
discoveries, concepts or ideas, or improvements thereof, or know-how related
thereto, as having been made or acquired by him prior to his employment by
Employer or during the term of his employment pursuant to this Agreement if
based on or otherwise related to Proprietary Information.
8. Shop Rights. Employer shall also have the royalty-free right to use
in its business, and to make, use and sell products, processes and/or services
derived from any inventions, discoveries, concepts and ideas, whether or not
patentable, including processes, methods, formulas and techniques, as well as
improvements thereof or know-how related thereto, which are not within the scope
of Inventions as defined in Section 7 but which are conceived or made by
Executive during the period he is engaged by Employer or with the use or
assistance of Employer's facilities, materials or personnel.
9. Non-solicitation of Customers or Executives of Employer.
(a) For a period of one year after termination of this Agreement,
Executive agrees not to solicit or call on any Customer of Employer whom
Executive solicited, called on, learned of, or became acquainted with during the
term of this Agreement, unless the products or service represented do not
compete with any of the products or services manufactured, assembled,
distributed, offered or sold by Employer.
(b) While this Agreement is in effect, and for a period of one
year after termination of this Agreement, Executive will not solicit any of
Employer's employees for a competing business or otherwise induce or attempt to
induce such employees to terminate their employment with Employer.
10. Exclusive Engagement. While this Agreement is in effect, Executive
shall not, without Employer's express written consent, engage in any employment,
consulting activity or business other than for Employer. Activity as a passive
investor in or outside director for another business enterprise shall not be
considered a violation of this section for so long as such business enterprise
is not competing or conducting business with Employer and so long as such
activities do not adversely impact the performance of the duties of his
employment with Employer.
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11. Non-Compete. The parties acknowledge that Executive has acquired or
will acquire much knowledge and information concerning Employer's business and
Customers as the result of Executive's engagement. The parties further
acknowledge that the scope of business in which Employer is engaged is
nationwide and very competitive, that such business is one in which few
companies can compete successfully, and that competition by Executive in that
business would injure Employer severely. Accordingly, Executive agrees that
during the period of this Agreement and for a period of one year following
termination of this Agreement, Executive will not take any of the following
actions within the United States, and additionally, if Executive had directly or
through his subordinate employees an assigned territory outside the United
States, in the territory or territories Executive or such employees worked in on
behalf of Employer:
(a) Directly or indirectly, sell or attempt to sell products or
services for or on behalf of any business that manufactures, assembles,
distributes, offers or sells any products or services that compete with any
services or products then manufactured, assembled, distributed, offered or sold
by Employer;
(b) Persuade or attempt to persuade any potential customer or
client to which Employer has made a proposal or sale, or with which Employer has
been having discussions, not to transact business with Employer, or instead to
transact business with another person or organization;
(c) Solicit the business of any company that has been a customer
or client of Employer at any time during Executive's employment by Employer,
provided, however, if Executive becomes employed by or represents a business
that exclusively sells products or services that do not compete with products or
services then marketed or intended to be marketed by Employer, such contact
shall be permissible.
12. Compliance with Law and Amendment by Court: If there is any
conflict between any provision of this Agreement and any statue, law, regulation
or judicial precedent, the latter shall prevail, but the provisions of this
Agreement thus affected shall be curtailed and limited only to the extent
necessary to bring it within the requirement of the law. If any part of this
Agreement shall be held by a court of proper jurisdiction to be indefinite,
invalid or otherwise unenforceable, the entire Agreement shall not fail on
account thereof, but: (i) the balance of the Agreement shall continue in full
force and effect unless such construction would clearly be contrary to the
intention of the parties or would result in an unconscionable injustice; and
(ii) the court shall amend the Agreement to the extent necessary to make the
Agreement valid and enforceable.
13. Freedom From Engagement Restrictions. Executive represents and
warrants that Executive has not entered into any agreement, whether express,
implied, oral, or written, that poses an impediment to Executive's employment by
Employer including Executive's compliance with the terms of this Agreement. In
particular, Executive is not subject to a preexisting non-competition agreement,
and no restrictions or limitations exist respecting Executive's ability to
perform fully Executive's obligations with Employer including Executive's
compliance with the terms of this Agreement.
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14. Third Party Trade Secrets. During the term of this Agreement,
Executive agrees not to copy, refer to, or in any way use information that is
proprietary to any third party (including any previous employer). Executive
represents and warrants that Executive has not improperly taken any documents,
listings, hardware, software, discs, electronic storage devices, or any other
tangible medium that embodies Proprietary Information from any third party, and
that Executive does not intend to copy, refer to, or in any way use information
that is proprietary to any third party in performing duties for Employer.
15. Injunctive Relief; Legal Fees. Executive acknowledges that any
breach of this Agreement is likely to result in irreparable and unreasonable
harm to Employer, that damages caused by a breach would be extremely difficult
to calculate, and that injunctive relief, as well as damages, would be
appropriate. If Executive breaches this Agreement, Executive shall promptly
reimburse Employer for all legal fees (and disbursements) incurred by Employer
to enforce this Agreement or to pursue remedies arising as a result of such
breach.
16. Successors and Assigns. This Agreement shall be binding upon
Executive, his heirs, executors, assigns, and administrators and shall inure to
the benefit of Employer, its successors, and assigns.
17. Prior Agreements; Waiver. If Executive currently has a written
confidentiality or non-compete agreement with Employer, this Agreement will
supersede all provisions of that agreement that cover the same subject matter as
this Agreement. This Agreement constitutes the entire Agreement between the
parties pertaining to the subject matter contained in it and supersedes those
provisions of all prior and contemporaneous agreements, representations and
understandings of the parties pertaining to the same subject matter including
the employment agreement between the parties executed during 2006. No waiver of
any of the provisions of this Agreement shall be deemed to, or shall constitute
a waiver of, any other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver. No waiver shall be binding unless executed in
writing by the party making the waiver.
18. Governing Law and Venue. Arizona law shall govern the construction
and enforcement of this Agreement and the parties agree that any litigation
pertaining to this Agreement shall be in courts located in Maricopa County,
Arizona, and each of the parties consents to the exclusive jurisdiction of such
courts and waives any objection to the jurisdiction or venue of such courts.
19. Construction. The language in all parts of this Agreement shall in
all cases be construed as a whole according to its fair meaning and not strictly
for nor against any party. The Section headings contained in this Agreement are
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. All terms used in one number or gender shall
be construed to include any other number or gender as the context may require.
The parties agree that each party has reviewed this Agreement and has had the
opportunity to have counsel review the same and that any rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall
not apply in the interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation. "
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20. Nondelegability of Executive's Rights and Employer Assignment
Rights. The obligations, rights and benefits of Executive hereunder are personal
and may not be delegated, assigned or transferred in any manner whatsoever, nor
are such obligations, rights or benefits subject to involuntary alienation,
assignment or transfer. Upon reasonable notice to Executive, Employer may
transfer Executive to an affiliate of Employer, which affiliate shall assume the
obligations of Employer under this Agreement. This Agreement shall be assigned
automatically to any entity merging with or acquiring Employer or its business.
21. Severability. If any term or provision of this Agreement is
declared by a court of competent jurisdiction to be invalid or unenforceable for
any reason, this Agreement shall remain in full force and effect, and either (a)
the invalid or unenforceable provision shall be modified to the minimum extent
necessary to make it valid and enforceable or (b) if such a modification is not
possible, this Agreement shall be interpreted as if such invalid or
unenforceable provision were not a part hereof.
22. Attorneys' Fees. Except as otherwise provided herein, if any party
hereto institutes an action or other proceeding to enforce any rights arising
out of this Agreement, the party prevailing in such action or other proceeding
shall be paid all reasonable costs and attorneys' fees by the non-prevailing
party, such fees to be set by the court and not by a jury and to be included in
any judgment entered in such proceeding.
23. Indemnification. Company agrees to indemnify and defend Executive
from and against, any and all liability, loss, damage, cost or expense arising
from Executive's performance of his duties under this Agreement except for
claims or damages caused by the gross negligence or willful misconduct of
Executive.
24. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed duly given upon receipt if personally delivered,
sent by U.S. certified mail, return receipt requested, or sent by a
nationally-recognized overnight courier service, addressed to the parties as
follows:
If to Employer: Modavox, Inc.
Attn: CEO
0000 X. Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
With a copy to:
P. Xxxxxx Xxxx, Esq.
Xxxxxxx & Xxxxx LLP
Renaissance Xxx
Xxx Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
If to Executive: At the address set forth following
Executive's signature on the last page
of this Agreement
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or to such other address as any party may provide in writing to the other.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
EMPLOYER: EXECUTIVE:
By: /s/ Xxxxx X. Xxx /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxx Xxxxx X. Xxxxxxxx
-------------------------------------
Title: President & Chief Executive Officer
Date: August 6, 2007
Date: August 6, 2007
Address:
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