Contract
Exhibit 10.53
This
Employment Agreement ("Agreement"), is entered into
as of the date that the Company raises a net of $5,000,000 in new funds (the
"Effective Date") by
and between Location Based Technologies, a Nevada Corporation ("Company"), and Xx. Xxx Xxxxxx
("Executive").
W I T N E S S E T
H:
WHEREAS,
Company is a technology and telecommunications company that has designed and
patented wireless communications products and systems combining advanced
wireless technology to provide features of location based devices;
and
WHEREAS,
Company wishes to assure itself of the services of Executive for the period and
upon the terms and conditions provided in this Agreement; and
WHEREAS,
Executive is willing to serve in the employ of Company on a full-time basis for
said period and upon the terms and conditions provided in this
Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties hereto agree as follows:
1.
Employment.
a. Term and
Title. Subject to the terms and conditions of this Agreement,
Company hereby agrees to employ Executive as Chief Marketing and Sales Officer,
or in such other responsible or additional executive capacity as set forth
herein, commencing on the Effective Date and continuing in full force and effect
until the First (1st) anniversary of the Effective
Date; additional one-year periods may be extended prior to the end of the term
then in effect (“Employment Term”) upon agreement of both
parties.
b. Duties and
Responsibilities. During the Employment Term, Executive agrees
to devote his/her working time and attention to the business and affairs of
Company and to faithfully and efficiently perform all reasonable
responsibilities and duties commensurate with his/her position in Company to the
best of his/her skill and abilities, in a competent and professional
manner. Executive agrees to fulfill such general management duties
and responsibilities as are consistent with his/her position.
c. Exclusive
Services. During the Employment Term, Executive further agrees
not to engage in any business or perform any services that are competitive with
the business of or services provided by Company or that may be deemed to
constitute a conflict of interest. Notwithstanding anything to the
contrary contained in this Section 1(c),
Executive shall not be prohibited from (i) rendering services to relatives,
charitable or community organizations; (ii) managing his/her personal
investments in such manner as to not interfere with the performance of his/her
duties hereunder; or (iii) owning no more than 4.99% of the equity
securities of a corporation or other entity, whose securities are registered pursuant to Section 12
of the Securities Exchange Act of 1934, as amended.
2.
Compensation;
Benefits. During the Employment Term, Executive shall be
entitled to the compensation package and benefits provided below:
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a. Base Salary and Stock
Compensation. During the Employment Term, in full
consideration for the services to be rendered by Executive and in complete
discharge of Company's salary obligations hereunder, Company shall pay to
Executive a base salary ("Base
Salary") of Twelve-Thousand five hundred dollars ($12,500) per month,
which amount shall be paid to Executive in accordance with Company's payroll
policies as in effect from time to time for senior executives of Company,
subject to all standard payroll deductions, if any.
b. Adjustments to Base
Salary. The base monthly salary shall be automatically
increased upon achievement of each of the following subscriber
benchmarks: (i) $ 2,500 upon attaining a total of 100,000 PocketFinder,
PetFinder, or PocketFinder Fleet subscribers; (ii) $2,500 upon
attaining a total of 250,000 PocketFinder, PetFinder, or PocketFinder Fleet
subscribers. The increase to the Executives base monthly salary shall be
effective immediately upon reaching the designated subscriber goal and shall be
reflected in the immediately succeeding payroll of the Executive.
c. Commissions. Each
quarter, the Executive will recive a commission payout which will be based on
achieving specific annual Gross Sales targets that are established by the Board
and are as follows:
1. 0.5% commission on
annual Gross Sales up to $50,000,000
2. 0.25% commission on
annual Gross Sales over $50,000,000
Commission
payments will be made to Executive within fifteen (15) days after the end of
each quarter.
d.
Stock Incentive
Plan/Options for Performance. Executive shall be entitled to participate
in the Stock Incentive Plan (“Plan”) of the Company on the terms and
conditions set forth in this Agreement and as otherwise provided in the Plan.
The provisions of the Plan are hereby incorporated herein by reference. Except
as otherwise expressly set forth herein, this Agreement shall be construed in
accordance with the provisions of the Plan and any capitalized terms not
otherwise defined in this Agreement shall have the definitions set forth in the
Plan.
. In
addition, stock options with a strike price of $1.13 shall be granted
for the initial milestone. Subsequent option prices will be established by the
Board at or near the time of milestone achievement or as otherwise provided in
the Plan:
1. 150,000 options upon
signing the Employment Agreement.
2. 300,000 options upon
achieving $50,000,000 in Gross Sales.
3. 300,000 options upon
achieving $250,000,000 in Gross Sales.
4. 350,000 options upon
achieving $500,000,000 in Gross Sales.
Upon
acquisition the next tiered award above what has been achieved to date will be
accelerated and awarded to the Executive.
e.
Expenses. Company
recognizes that in connection with Executive's performance of Executive's duties
and obligations under this Agreement, Executive shall incur certain expenses of
a business character. Company shall reimburse Executive for all
ordinary and reasonable expenses incurred by Executive in connection with
performance of his/her duties hereunder, provided that Executive submits to
Company substantiation of such expenses.
f.
Fringe
Benefits/Insurance. Executive shall be entitled to participate
in any and all benefits and perquisites as are generally provided by the Company
for the benefit of its executive employees including, but not limited to,
eligibility for participation in any group life, health, dental, vision,
hospitalization, disability or accident insurance, pension plan, retirement
savings plan, 401(k) plan, or other such benefit plan or policy which may
presently be in effect or which may hereafter be adopted by the Company;
provided, however, that nothing herein contained shall be deemed to require the
Company to adopt or maintain any particular plan or policy, or to preclude the
Company from amending or terminating any plan or policy.
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g.
Vacation and
Holidays. Executive shall be entitled to 3 weeks paid vacation
per year. Executive shall also be entitled to all paid holidays given
by Company to its employees.
3. Termination of
Employment.
a.
Termination upon Death or
Incapacity. Executive's employment hereunder shall
terminate upon his death. If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been absent from his duties
hereunder on a full-time basis for the entire period of two consecutive months,
and within thirty (30) days after written notice of termination is given,
Executive shall not have returned to the performance of his
duties hereunder on a full-time basis, the Company may terminate
Executive's employment hereunder.
b. Termination by
Executive-Resignation. Executive may resign his/her current
position with Company and thereby terminate his/her employment, for any reason
by giving Company 60 days advance written notice.
c.
Termination for
Cause. Notwithstanding anything to the contrary contained in
this Agreement, Company may, by written notice to Executive, immediately
terminate Executive's employment for "Cause." For
purposes of this Agreement, "Cause" shall mean that one of
the following events (each, a "Cause Event") shall have
occurred after the Effective Date: (i) Executive's ongoing
material breach of a material provision of this Agreement, following written
notice of such breach from the board of directors of Company and a reasonable
period of time to cure; (ii) chronic alcoholism or any other form of addiction
that prevents Executive from performing the essential functions of his/her
position with a reasonable accommodation; (iii) gross negligence or willful
misconduct of the Executive in connection with carrying out the performance
objectives of the Company that have been conveyed to the Executive in
writing.
d.
Suspension for
Cause. Company may, by written notice to Executive, suspend
the employment of Executive only for Cause. If Company exercises such
right of suspension, Executive's obligation to render services, and the
Company's obligation to pay Executive's Base Salary, shall be suspended for the
period of time set forth in the notice; but in no event shall such suspension
exceed a period of time equal to 3 consecutive months. Company may,
in its reasonable discretion by written notice, terminate the employment of
Executive at or during the suspension period.
e. Termination without Cause by
Company. Without limiting the
foregoing, “Termination Without Cause” may occur under any of the following
circumstances: (i) termination of Executive’s full-time employment
hereunder for any reason other than set forth in Sections 3(a) through (d)
above; (ii) failure to elect or re-elect, or appoint or re-appointment,
Executive as Chief Marketing and Sales Officer of the Company; (iii) termination
of Executive’s full-time employment pursuant to Company’s unfettered
discretion.
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4.
Rights Upon
Termination.
a. Upon
termination of Executive's employment pursuant to
Sections 3(a) through Section 3(e) hereof, Executive shall receive (i) any
salary or monies previously due and owing to Executive and remaining unpaid and
all other salary and monies due for amounts earned up to and including the date
of termination; (ii) outstanding reimbursable business expenses; (iii) all
earned but unused vacation time; (iv) and all commissions that are due, accrued
or that will be due for the quarter ending
on or after the date of termination for Gross Sales generated by Executive up to
and including the date of termination.
b.
In addition to the amounts that Executive is entitled to receive pursuant
Section 4 (a) hereof, if Executive’s employment is terminated without cause
under Section 3(e), Executive shall be entitled to receive Severance Pay from
Company for a period (the “Severance Period”) equal to the lesser of (i) twelve
months or (ii) the number of months (including fractional amounts for any period
that is less than a complete month) from the Effective Date through the date of
termination. The amount of Severance Pay to be paid to Executive each month
shall be equal to Executive's monthly Base Salary and automobile allowance
(adjusted for any fractional month hereunder) at the time the Agreement is
terminated, less applicable payroll tax withholding. Severance pay shall be due
and payable regardless of whether or not Executive becomes employed during such
Severance Period.
c. Sole Obligations of
Company. Company shall have no other contractual obligations
to Executive upon termination of Executive's employment for any reason, except
as explicitly set forth in this Section 4 of this
Agreement.
5.
Cooperation
Following Termination.
Executive
agrees that, following notice of termination of his/her employment with Company,
he/she will cooperate fully with Company in all matters relating to the
completion of his/her pending work on behalf of Company and the orderly
transition of such work to such other officer as Company may
designate. Executive further agrees that during and following the
termination of his/her employment with Company, s/he will cooperate fully with
Company as to any and all claims, controversies, disputes or complaints over
which he has any knowledge other than his or her employment relationship with
Company; provided,
however, Executive will be reimbursed by Company for any out of pocket
expenses incurred pursuant to his/her duties under this Section 5 and
reasonably compensated for his/her time. Such cooperation includes,
but is not limited to, providing Company with all information known to him/her
related to such claims, controversies, disputes or complaints and appearing and
giving testimony in any forum.
6.
Confidential
Information.
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a. Company
Information. Executive acknowledges that during the course of
employment, Executive will have access to information about Company and that
Executive's employment with Company shall bring Executive into close contact
with proprietary information of Company. In recognition of the
foregoing, Executive agrees at all times during and following Executive's
employment with Company, to hold in confidence, and not to use, except for the
benefit of Company, or to intentionally disclose to any person, firm,
corporation or other entity without written authorization of Company, any
"Confidential Information" of Company which Executive obtains or
creates. Further, Executive shall not solicit customers, suppliers or
vendors of Company to compete, directly or indirectly, therewith following the
conclusion of his employment. Executive understands that "Confidential Information"
means any Company proprietary information, technical data, trade secrets or
know-how, including, but not limited to, research, product plans, products,
services, suppliers, customer lists, prices and costs, markets, software,
developments, inventions, laboratory notebooks, processes, formulas, technology,
designs, drawing, engineering, hardware configuration information, marketing,
licenses, finances, budgets or other business information disclosed to Executive
by Company in writing or by drawings of parts or equipment, or created by
Executive during the period of Executive 's employment (the "Employment
Period"). Executive understands that "Confidential
Information" includes information pertaining to any aspects of Company's
business which is either information not known by actual or potential
competitors of Company or is proprietary information of Company or its customers
or suppliers, whether of a technical nature or otherwise. Executive
further understands that Confidential Information does not include any of the
foregoing items which have become publicly known and made generally available
through no wrongful act of Executive.
b. Third Party
Information. Executive recognizes that Company has received and in the
future will receive confidential or proprietary information from third parties
subject to a duty on Company's part to maintain the confidentiality of such
information and to use such information only for certain limited
purposes. Executive agrees to hold all such confidential or
proprietary information in confidence and not to intentionally disclose it to
any person, firm or corporation or to use it except as necessary in carrying out
my work for Company consistent with Company's agreement with such third
party.
7.
Inventions.
a. Inventions Retained and
Licensed. Executive represents and warrants to Company that
there are no inventions, original works of authorship, developments,
improvements, or trade secrets which were made by Executive prior to the
commencement of his/her employment with the Company under this Agreement
(collectively, "Prior
Invention(s)"), which belong solely to Executive or belong to Executive
jointly with another, which relate in any way to any of Company's proposed
businesses, products or research and development, and which are not assigned to
Company hereunder. If, in the course of the Employment Period,
Executive incorporates into a Company product, process or machine a Prior
Invention owned by Executive, Company is hereby granted and shall have a
non-exclusive, non-royalty-based, license to make, have made, copy, modify, make
derivative works of, use, sell and otherwise distribute such Prior Invention as
part of or in connection with such Company product, process or
machine.
b. Assignment of
Inventions. Executive agrees that Executive will promptly make
full written disclosure to Company, will hold in trust for the right and benefit
of Company, and hereby assigns to Company, or its designee, all rights, title
and interests throughout the world in and to any and all inventions, original
works of authorship, developments, concepts, know-how, improvements or trade
secrets, whether or not patentable or registerable under copyright or similar
laws, which Executive may solely or jointly conceive or develop or reduce to
practice, or cause to be conceived or developed or reduced to practice during
the Employment Period that (i) relate at the time of conception or development
to the actual or demonstrably proposed business or research and development
activities of Company; (ii) result from or relate to any work performed for
Company during normal business hours; and (iii) are developed through the use of
Confidential Information (collectively, "Inventions"). Executive
further acknowledges that all Inventions, which are made by Executive (solely or
jointly with others) within the scope of and during the period of Executive’s
employment with Company, are "works made for hire" and are compensated by the
Base Salary, unless regulated otherwise by a separate agreement between the
“Company” and the “Executive”.
c. Inventions on Executive's
Own Time. The provisions of Section 7(a) and 7(b)
above do not apply to any invention which qualifies fully under the provisions
of California Labor Code §2870, which provides as follows:§ 2870 - Invention on
Own time - Exemption from Agreement:
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(1). Any
provision in an employment agreement which provides that an Executive shall
assign, or offer to assign, any of his or her rights in an invention to his or
her employer shall not apply to an invention that the Executive developed
entirely on his or her own time without using the employer's equipment,
supplies, facilities, or trade secret information except for those inventions
that either (i) relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer; or(ii) result from any work performed
by the Executive for the employer.
(2). To the
extent a provision in an employment agreement purports to require an Executive
to assign an invention otherwise excluded from being required to be assigned
under subdivision (a) of Section 2870, the provision is against the public
policy of this state and is unenforceable.
d. Patent
and Copyright Rights. Executive agrees to assist Company, or
its designee, at Company's expense, in every reasonable way to secure Company's
rights in the Inventions and any copyrights, patents, trademarks, mask work
rights, moral rights, or other intellectual property rights relating thereto in
any and all countries, including the disclosure to Company of all pertinent
information and data with respect thereto, the execution of all applications,
specifications, oaths, assignments, recordation’s, and all other instruments
which are necessary in order to apply for, obtain, maintain and transfer such
rights and in order to assign and convey to Company, its successors, assigns and
nominees the sole and exclusive rights, title and interest in and to such
Inventions, and any copyrights, patents, mask work rights, or other intellectual
property rights relating thereto.
8.
Return of Company
Documents. Executive agree that, at the time of termination of
employment with Company for any reason, Executive will deliver to Company (and
will not keep in my possession, recreate or deliver to anyone else) any and all
Confidential Information and all other documents, materials, information or
property belonging to Company, its successors or assigns. Executive further
agrees that any property situated on Company's premises and owned by Company,
including disks and other storage media, filing cabinets or other work areas, is
subject to inspection by Company personnel at any time with or without
notice.
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9.
Injunctive
Relief. Executive expressly acknowledge that any breach or
threatened breach of any of the terms and/or conditions set forth in Sections 6 and 7 of
this Agreement will result in substantial, continuing and irreparable injury to
Company. Therefore, Executive hereby agrees that, in addition to any
other remedy that may be available to Company, Company shall be entitled to
injunctive relief, specific performance or other equitable relief by a court of
appropriate jurisdiction in the event of any breach of threatened breach of the
terms of this Agreement.
10.
Miscellaneous.
a.
Governing Law.
This Agreement is deemed to be entered into and performed in Orange County,
California. Except as otherwise explicitly noted, this Agreement
shall be governed by and construed in accordance with the laws of the State of
California, without giving effect to the conflict of law rules of
California. The parties hereby submit to the exclusive jurisdiction
of the state of California in connection with any dispute arising from or
related to this Agreement, and Orange County shall be the sole venue
therefore.
b.
Modifications and
Amendments. This Agreement may be modified or amended only by
a written instrument executed by the parties hereto and approved in writing by a
duly authorized officer of Company and signed by the Executive impacted,. No
modification or amendment shall be effective absent such approval.
c.
Independence and
Severability. Each of the rights enumerated above shall be
independent of the others and shall be in addition to and not in lieu of any
other rights and remedies available to Company at law or in
equity. If any of the covenants contained herein or any part of any
of them is hereafter construed or adjudicated to be invalid or unenforceable,
the same shall not affect the remainder of the covenant or covenants or rights
or remedies which shall be given full effect without regard to the invalid
portions. If any of the covenants contained herein are held to be
invalid or unenforceable because of the duration of such provision or the area
or scope covered thereby, Executive agrees that the court or arbitrator making
such determination shall have the power to reduce the duration, scope and/or
area of such provision and in its reduced form said provision shall then be
enforceable.
d.
Notice. For
the purpose of this Agreement, notices and all other communications provided for
in this Agreement shall be in writing and shall be deemed to have been duly
given as of the date if delivered in person or by telecopy, on the next business
day, if sent by a nationally recognized overnight courier service, and on the
third business day if mailed by registered mail, return receipt requested,
postage prepaid, and if addressed to the Company then at its principal place of
business, or if addressed to Executive, then his/her last known address on file
with the Company.
e.
Waiver. The
observation or performance of any condition or obligation imposed upon Executive
hereunder may be waived only upon the written consent of Company and the
Executive. Such waiver shall be limited to the terms thereof and
shall not constitute a waiver of any other condition or obligation of Executive
under this Agreement.
f.
Assignment. This
Agreement is personal to Executive and shall not be assigned by him/her. Company
may assign its rights hereunder to (a) any corporation or other legal entity
resulting from any merger, consolidation or other reorganization to which
Company is a party or (b) any corporation, partnership, association or other
legal entity or person to which Company may transfer all or substantially all of
the assets and business of Company existing at such time. All of the
terms and provisions of this Agreement shall be binding upon and shall inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns.
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g.
Headings. The
headings have been inserted for convenience only and are not to be considered
when construing the provisions of this Agreement.
h.
Counterparts. This
Agreement may be executed in one or more counterparts and transmitted by
facsimile, a copy of which shall constitute an original and each of which, when
taken together, shall constitute one and the same agreement.
i.
Survival of
Provisions. Notwithstanding anything to the contrary in this
Agreement, Sections 5,
6, 7, 8, 9 and 10 of this Agreement shall survive the termination of this
Agreement for the period of time so specified or implied in such Sections,
respectively.
j.
Arbitration. Any
controversy, dispute or claim of any nature whatsoever involving Company and
Executive or Executive's spouse or family, including without limitation any
claims arising out of, in connection with, or in relation to this Agreement or
Executive's employment with Company, any claims of unlawful discrimination,
sexual harassment or wrongful termination, and any issues of arbitrability of
any such disputes, will be resolved by final and binding arbitration before the
American Arbitration Association in Orange County, California, in accordance
with its employee arbitration rules. Both parties herein waive jury
trial, court trial, and all discovery rights, except for limited deposistions
that are approved by the assigned arbitrator. Said waiver is made to
the fullest extent possible and is made after each party has had the opportunity
to and been advised to seek independent cousel regarding this matter and all of
the provisions contained in this agreement. Said waiver of jury trial
and of discovery rights is done voluntarily, knowingly, and is binding in every
respect. Further, the parties agree that any dispute specified in
this paragraph shall be resolved solely and exclusively by
arbitration. Each party shall share arbitration fees equally, unless
a separate allocation is required by law. By initialing the space
immediately below, the parties agree to the terms specified in this
paragraph.
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Company
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Executive
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k.
Severability. If
any term or provision of this Agreement shall, to any extent, be held invalid or
unenforceable, the remainder of this Agreement shall not be
affected.Waivers. A waiver or breach of cevenanat or provision in
this Agreement shall not be deemed a wiaver of an other covenant or provision in
this Agreement, and no waiver shall be valid unless in writing and executed by
the waiving party. An extension of time for performance of any
obligation or act shall not be deemed an extension of the time for performance
of any other obligation or act.
l. Attorney
Fees. If litigation is commenced between the parties, the
Prevailing Party in that litigation shall be entitled to recover from the
nonprevailing party all reasonable attorney fees and
costs. “Prevailing Party” shall include without limitation a party
who dismissed an action in exchange for sums allegedly due; the party who
receives performance from the other party for an alleged breach or contract or a
desired remedy where the performance is substantially equal to the relief sought
in an action; or the party determined to be the prevailing party by a court of
law or arbitrator.
m.
Entire
Agreement. This Agreement constitutes the entire understanding
between the parties hereto in respect of the employment of Executive by Company,
superseding all negotiations, prior discussions, prior written, implied and oral
agreements, preliminary agreements and understandings with Company or any of its
officers, employees or agents.
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IN
WITNESS WHEREOF, this Agreement is executed and agreed to as of July 3,
2009.
EXECUTIVE
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/s/
Xxx Xxxxxx
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Xxx
Xxxxxx
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/s/
Xxxxx X. Xxxxx
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Xxxxx
X. Xxxxx
Chief
Executive Officer
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/s/
Xxxxxxx Xxxxx
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Xxxxxxx
Xxxxx
Chief
Operating Officer
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