EMPLOYMENT AGREEMENT
Exhibit
10.2
THIS
EMPLOYMENT AGREEMENT
(the
“Agreement”) is made and entered into to be effective as of March 23, 2007 by
and between ANTs
software inc.,
a
Delaware corporation (the “Company”), and the Executive set forth on the
signature page hereof (the “Executive”).
NOW,
THEREFORE,
in
consideration of the agreements of the parties contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Employment.
The
Company hereby employs Executive to serve in such capacity and with such title
as are set forth on the signature page hereto (the “Position”), and Executive
agrees to serve in the Position with the Company,
or to
serve in such other position or positions as the Company may determine in its
sole discretion.
The
Executive hereby accepts such employment and agrees to devote his or her best
efforts and his or her full time and attention exclusively to the business
and
affairs of the Company, as such business and affairs now exist and as they
may
be hereafter changed or augmented, under and pursuant to the general direction
of the Board of Directors of the Company (the “Board”) and the Chief Executive
Officer of the Company. The Company shall retain full direction and control
of
the manner, means and methods by which the Executive performs the services
for
which he or she is employed hereunder and of the place or places at which such
services shall be rendered.
2. Term
of
Employment.
The term
of the Executive’s employment shall continue until terminated by either party
pursuant to the terms of this Agreement. Executive is employed by the Company
“at will” and Executive’s employment may be terminated at any time, by Executive
or the Company, for any reason and for no reason.
3. Compensation
and Expenses.
(a) Salary.
As
compensation for the Executive’s services during the term of the Executive’s
employment hereunder, the Company shall pay the Executive an annual salary
(the
“Salary”) as is set forth on the signature page hereto, payable in 24 equal
semi-monthly installments, subject to required tax and other fiduciary
withholding requirements. Both Executive and Company agree and acknowledge
that
Executive’s Salary may change following the date hereof, and the provisions
hereof apply to the then outstanding Salary.
(b) Expenses.
The
Company shall reimburse the Executive for all reasonable and necessary business
expenses incurred by him or her in connection with the performance by him or
her
of his or her duties hereunder and in accordance with the Company’s policies and
procedures with respect thereto, as they may be changed from time to
time.
(c) Stock
Options.
As of
the date of this Agreement Executive has been granted the Stock Options set
forth on Attachment 1 hereto, and the aggregate number of shares subject to
such
Stock Options is set forth on the signature page hereof. Both Executive and
Company agree and acknowledge that the Stock Option grants and the number of
shares of common stock subject to such Stock Options may change following the
date hereof, and the provisions hereof apply to all such then outstanding Stock
Options.
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(d) Vacation.
The
Executive shall be entitled to that number of annual paid personal days as
are
set forth on the signature page hereto. Personal days taken for vacations shall
be taken at such times as the Executive and the Company may mutually
agree.
(e) Other
Employee Benefits.
The
Executive shall be entitled to participate in the Company’s health insurance
plans or programs and such other benefit plans as may be adopted, from time
to
time, by the Company, to the extent that they, by their terms, cover the
Executive. Nothing in this Agreement shall preclude the Company or any affiliate
of the Company from terminating or amending any employee benefit plan or program
at any time or from time to time.
(f) Insurance.
The
Company may, at its discretion, secure at its own expense certain insurance
policies, including without limitation, a “key-man” life insurance policy upon
the life of the Executive, payable to the Company in the event of the
Executive’s death. The Executive agrees that any such insurance policy shall be
for the Company’s benefit only and acknowledges that no person claiming by or
through the Executive shall have any right to the proceeds of such insurance
policies. The Executive agrees to execute all documents and take all acts
reasonably requested by the Company to secure and enjoy the benefits of such
insurance policies.
4. Restrictive
Covenants.
(a) Other
Business Ventures.
During
the term of the Executive’s employment hereunder, the Executive shall not,
without the prior approval of the Board, directly or indirectly, either as
an
officer, director, employee, agent, advisor, consultant, principal, stockholder,
partner, owner or in any other capacity, on his own behalf or otherwise, in
any
way engage in, represent, be connected with or have a financial interest in,
any
business which is or, to the best of his or her knowledge, is about to become
competitive with the business of the Company; provided, however, that nothing
herein contained shall be deemed to prohibit the Executive from being a passive
investor owning up to 1% of any class of outstanding securities of any company
whose stock is publicly traded.
(b) Proprietary
Information and Inventions Agreement.
The
Executive agrees that the Executive’s employment by the Company is conditioned
upon the Executive promptly signing an agreement in substantially the form
of
the Company’s standard form of Proprietary Information and Inventions Agreement.
5. Termination
of Employment by Executive For Good Cause.
In the
event the employment of the Executive with the Company is terminated by the
Executive for “Good Cause,” the Executive shall immediately and fully vest in
all of the Severance Benefits set forth in Section 7 below. For purposes of
this
Section 5, “Good Cause” shall be defined as: (i) a decrease in Executive’s
compensation of greater than twenty-five percent (25%) of his or her
compensation (x) immediately prior to such decrease or (y) in the aggregate
over
a period not exceeding two years (not including any decrease in compensation
that is applied to each of the Company’s executive officers equally), (ii) a
material change in Executive’s corporate position, title or responsibilities, or
(iii) the relocation of the principal offices of the Company more than 80 miles
from their present location without the Executive’s consent. In the event of the
existence of Good Cause, the Executive may terminate his employment at any
time.
6. Termination
of Employment Without Cause.
In the
event the employment of the Executive with the Company is terminated without
“Cause” after six months of employment, the Executive shall immediately and
fully vest in all of the Severance Benefits set forth in Section 7 below. For
purposes of this Section 6, “Cause” shall be defined as the Executive’s: (i)
violation of any material provisions of any written agreement between the
Company and Executive, (ii) being convicted of a felony and lapse of all rights
of appeal, or (iii) commitment of any act of willful misconduct, gross
negligence, or dereliction of his or her duties.
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7. Severance
Benefits and Election.
In the
event that the employment of the Executive is terminated (i) by the Executive
for Good Cause pursuant to Section 5 or (ii) by the Company without Cause
pursuant to Section 6, Executive shall have thirty days to elect the Release
Severance or the No-Release Severance as set forth below:
(a) No-Release
Severance.
Executive may elect to receive the following severance benefits without agreeing
to a general release of all claims known and unknown: The Company shall pay
Executive: (i) a lump sum equal to six month’s base salary of the Executive;
(ii) any and all accrued but unpaid bonuses and (iii) any and all target bonuses
for the six month period following such termination of employment, in all such
cases within 30 days from the effective date of the termination (the “No-Release
Severance”).
(b) Partial
Option Acceleration.
Additionally, upon election of the No-Release Severance, the Executive shall
(A)
immediately and fully vest in and have the right to exercise 75% of any and
all
unvested stock options granted to Executive, whether or not otherwise vested,
subject to the provisions concerning exercisability and restrictions on transfer
of such options, set forth below.
(c) Release
Severance.
Executive may elect to receive the following severance benefits upon agreeing
to
a general release of all claims known and unknown: The Company shall pay
Executive: (i) a lump sum equal to twelve month’s base salary of the Executive;
(ii) any and all accrued but unpaid bonuses and (iii) any and all target bonuses
for the twelve month period following such termination of employment, in all
such cases within 30 days from the effective date of the termination (the
“Release Severance”). .
(d) Full
Option Acceleration.
Additionally, upon election of the Release Severance, the Executive shall
immediately and fully vest in and have the right to exercise any and all
unvested stock options granted to Executive, whether or not otherwise vested,
subject to the provisions concerning exercisability and restrictions on transfer
of such options, set forth below.
(e) Election
Period.
The
thirty day period during which Executive may elect the Release Severance or
the
No-Release Severance shall commence the day following Executive’s last day of
employment and shall expire on the 31st
day
following Executive’s last day of employment. In the event that Executive does
not timely elect the Release Severance or the No-Release Severance, it shall
conclusively be deemed election of the No-Release Severance and the right to
elect the Release Severance shall be forever waived. Nothing herein shall create
any obligation on the Company to notify Executive of his or her right to elect
the Release Severance or the No-Release Severance.
(f) Restrictions
on Option Exercise and Stock Sale.
Executive and Company agree that, in the event that the employment of the
Executive is terminated (i) by the Executive for Good Cause pursuant to Section
5 or (ii) by the Company without Cause pursuant to Section 6, then the following
shall apply:
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(i) The
exercise period of all of Executive’s Stock Options shall be extended to and
exercisable until, that date which is the fifth year anniversary of the date
of
termination of Executive’s employment; and
(ii) Executive
covenants and agrees that, unless (x) there is a Corporate Transaction, as
defined in the Stock Option Agreements by and between Executive and Company,
or
(y) the Company conducts a secondary stock offering in which the Company sells
not less than 50% of its shares of common stock outstanding immediately
preceding such offering, then (a) he or she will not sell any shares purchased
under Executive’s Stock Options prior to the first six months following the date
of termination of Executive’s employment, and (b) he or she will not sell more
than 20% of the common stock purchased in exercise of any of Executive’s Stock
Options during any three month period thereafter. Executive acknowledges and
agrees that the Company can place stop transfer instructions to assist in
enforcing these covenants.
(g) Release. In
the
event that Executive elects the Release Severance, then Executive agrees as
follows: Executive, on behalf of himself or herself and his or her heirs,
successors and assigns, hereby fully releases and forever discharges the
Company, and its officers, directors, agents, employees, attorneys, parents,
affiliates, and subsidiaries (the “Released Parties”), from any and all claims,
actions and liabilities of any kind or character whatsoever, arising in law
or
in equity, known or unknown, suspected or unsuspected, that Executive has ever
had, now has or may now have against the Released Parties, including, without
limitation, all claims directly or indirectly related to or arising out of
Executive’s employment by the Company, the performance of his duties during that
employment, and/or the termination of or his resignation from that employment.
This waiver and release specifically includes, but is not limited to, all
claims, if any, whether arising in tort or in contract, related to Executive’s
employment, including any and all claims for wrongful discharge or wrongful
termination; claims for alleged violation of public policy or breach of implied
covenant of good faith and fair dealing; claims for breach of fiduciary duty;
claims for negligent or intentional infliction of emotional distress; claims
arising in connection with Executive’s compensation, benefits, warrants and/or
stock options; claims for breach of express or implied contract or for further
monetary compensation by way of additional salary or bonus allegedly due
Executive by reason of his employment with the Company; and all other claims,
based on common law or federal or state statute, including claims for
discrimination based on age arising under state statute or the federal Age
Discrimination in Employment Act, the Older Workers’ Benefits Protection Act, or
any similar federal or state law prohibiting age discrimination.
Executive
further understands and expressly agrees that this Release specifically extends
to all claims, whether those claims are presently known to the party or not,
or
suspected by the party or not. Executive agrees that he or she has not assigned
or transferred, in whole or in part, any of the claims, actions or liabilities
released by him or her herein. By signing below, Executive expressly waives
the
benefits of Section 1542 of the California Civil Code, which
provides:
“A
general release does not extend to claims which the creditor does not know
or
suspect to exist in his favor at the time of executing the release which if
known by him must have materially affected his settlement with the
debtor.”
8. Confidentiality.
Executive agrees that the terms and conditions of this Agreement are and shall
remain strictly confidential, and that he or she will not disclose those terms
and conditions to any third party (i) except for Executive’s tax or legal
advisors or his spouse, or (ii) unless compelled by law to do so.
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9. Noninterference.
Executive agrees that, during the term of his or her employment and for a period
of 12 months thereafter, he or she shall not, on his or her own behalf or on
behalf of any other person, solicit or in any manner influence or encourage
any
current or prospective customer, employee or other person who has a business
relationship with the Company or any affiliate, to terminate or limit in any
way
their relationship with the Company, or interfere in any way with such
relationship. For purposes hereof, (i) the term person is to be construed in
the
broadest sense and means and includes any natural person, company, limited
liability company, partnership, joint venture, corporation, business trust,
unincorporated organization or any governmental authority, and (ii) a person
shall be considered a “prospective” customer or employee if the Company or any
affiliate has entered into discussions or otherwise made contact with the person
for the purpose of any such engagement within the six-month period prior to
any
solicitation by the Executive, and such fact is known or made known to the
Executive.
10. Non-Competition.
The
Executive agrees not to, during his or her employment and for a period of 12
months thereafter, voluntarily or involuntarily, directly or indirectly,
individually or on behalf of any entity or person, as a partner, stockholder,
director, officer, principal, agent, employee, or in any other capacity or
relationship, engage in, aid, or assist, in any competition with the Company
within the United States of America or any foreign country where the Company
conducts business. The Company and the Executive acknowledge the reasonableness
of this covenant not to compete and the reasonableness of the geographic area
and duration of time which is part of this covenant. The provisions of this
paragraph 10 shall survive the termination of this Agreement by either
party.
11. Voluntary
Agreement.
Executive expressly acknowledges and warrants that he or she has read and fully
understands this Agreement; that he or she have had the opportunity to consult
with legal counsel of his or her own choosing in order to have the terms and
conditions of this Agreement fully explained to him or her; that he or she
is
not executing this Agreement in reliance on any promises, representations or
inducements other than those set forth herein; that he or she understands he
or
she is giving up legal rights by signing this Agreement; and that he or she
is
executing it voluntarily, free of any duress or coercion, after due
deliberation, with a full understanding of what it means to do so.
12. Mediation,
Venue and Arbitration.
If a
dispute arises in connection with this Employment Agreement, Executive and
Company agree that any legal action, mediation or arbitration will be conducted
in the court, arbitration or other body having subject matter jurisdiction,
in
the city of Burlingame, California, and venue shall be proper only therein.
Any
dispute, controversy or claim arising out of or relating to provisions of this
Employment Agreement shall be finally settled by arbitration in accordance
with
the Commercial Arbitration Rules of the American Arbitration Association (AAA)
or the Judicial Arbitration and Mediation Service (JAMS), or other mutually
acceptable arbitral body, in effect on the date of this Agreement. The
arbitration tribunal shall adopt rules of procedure supplementary to the rules
of the AAA or JAMS as it deems equitable under the circumstances. An award
rendered by the arbitrator shall be final and binding, and judgment may be
entered upon it in any court having jurisdiction. In no event shall this
subsection be construed as conferring upon any court authority or jurisdiction
to inquire into or review such award on its merits.
13. Miscellaneous.
(a) Governing
Law.
This
Agreement shall be governed by, and construed, interpreted and enforced in
accordance with, the internal laws of the State of California without reference
to principles of conflict of laws.
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(b) Captions.
The
section headings contained herein are for reference purposes only and shall
not
in any way affect the meaning or interpretation of this Agreement.
(c) Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding of the parties
hereto with respect to the subject matter hereof, and supersedes all prior
agreements, arrangements and understandings, written or oral, between the
parties hereto with respect to the subject matter hereof.
(d) Further
Assurances.
Each
party hereto shall furnish to the other party hereto such instruments and other
documents as the other party may reasonably request for the purpose of carrying
out or evidencing the transactions contemplated by this Agreement.
(e) Attorneys’
Fees.
If any
lawsuit or other action or proceeding relating to this Agreement is brought
by
either party hereto against the other party hereto, the prevailing party shall
be entitled to recover reasonable attorneys’ fees, costs and disbursements (in
addition to any other relief to which the prevailing party may be
entitled).
(f) Notices.
Any
notice, request, consent or approval required or permitted to be given under
this Agreement or pursuant to law shall be deemed effective upon the actual
receipt by the Executive or the agent for service of process for the Acquirer
or
Company, as applicable.
(g) Amendments;
Waivers.
This
Agreement may be amended, modified, superseded, canceled, renewed or extended
and the terms or covenants hereof may be waived, but only by a written
instrument executed by the Executive and the Company or the Acquirer as the
case
may be. The failure of either party at any time or times to require performance
of any provision hereof shall in no manner affect such party’s right at a later
time to enforce the same. No waiver by either party of the breach of any term
or
covenant contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
(h) Severability.
Any term
or provision of this Agreement which is prohibited, invalid or unenforceable
in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
(but only to the extent) of such prohibition, invalidity or unenforceability
without invalidating or affecting any other term or provision hereof, any such
prohibition, invalidity or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such term or provision in any other
jurisdiction.
(i) Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed to be an original, but all of which together shall constitute one and
the
same instrument.
(j) Successors
and Assigns.
The
terms and provisions of this Agreement shall inure to the benefit of, and shall
be binding upon, the successors and assigns of the Company and/or Acquirer.
In
view of the personal nature of the provisions of this Agreement to be performed
by the Executive, the Executive shall not have the right to assign or transfer
any of the obligations or rights and benefits hereunder, nor shall said rights
and benefits be otherwise subject to voluntary or involuntary alienation except
as provided herein.
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(k) No
Rules of Xxxxxxxxxxxx.Xx
rules
of construction are intended by the parties hereto and none shall be employed
or
used in the interpretation of this Agreement. For all purposes, both parties
hereto shall be deemed joint authors hereof.
IN
WITNESS WHEREOF,
the
parties have duly executed this Separation Agreement as of the date first above
written.
| a Delaware Corporation | |||||||||
|
By:
|
|||||||||
|
Name
and Title:
|
Xxxxxxx Xxxxxxx - Chairman | ||||||||
|
Address:
|
000 Xxxxxxx Xxxx., Xxxxx 000 | ||||||||
| Xxxxxxxxxx, XX 00000 | |||||||||
| EXECUTIVE | |||||||||
|
By:
|
|||||||||
|
Name:
|
Xxxxxx Xxxxx | ||||||||
|
Address:
|
C/O ANTs software inc. | ||||||||
| 000 Xxxxxxx Xxxx. Xxxxx 000 | |||||||||
| Xxxxxxxxxx, XX 00000 | |||||||||
|
Position:
|
President and Chief Executive Officer | ||||||||
|
Annual
Salary:
|
$200,000 | ||||||||
|
Annual
Eligible Bonus:
|
$200,000 | ||||||||
|
Total
Stock Options Granted:
|
1,000,000 | ||||||||
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Attachment 1
Outstanding
Stock Options - Xxxxxx Xxxxx
|
No.
of Shares
|
Grant
Number
|
Expiration
Date
|
Exercise
Price
|
|
125,000
|
224
|
05/03/15
|
$2.36
|
|
375,000
|
227
|
06/09/15
|
$3.01
|
|
135,000
|
244
|
10/12/15
|
$2.60
|
|
200,000
|
276
|
06/18/16
|
$2.28
|
|
165,000
|
292
|
10/27/16
|
$2.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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