RETENTION BONUS AGREEMENT
Exhibit
10.2
This
Retention Bonus Agreement (the "Agreement") is made and entered into effective
as of January 27, 2010 (the "Effective Date"), by and between Xxxxxx Xxxxxxx
(the "Employee") and Verecloud, Inc. (the "Company").
RECITALS
A. Due
to the termination of the SkyTerra contract which generated over 95% of revenue
in this current year, the Company has initiated a series of steps to reduce
costs while additional revenue and/or funding resources are
secured. These steps include, but are not limited to, the reduction
of workforce along with a 25% reduction in pay for the Leadership
Team. The Board of Directors of the Company (the "Board") recognizes
that such actions are a distraction to the Employee as a member of the
Leadership Team and may cause the Employee to consider alternative employment
opportunities. The Board has determined that it is in the best interests of the
Company and its stockholders to assure that the Company will have the continued
dedication and objectivity of the Employee.
B. The
Board believes that it is in the best interest of the Company and its
stockholders to provide the Employee with an incentive to continue his
employment and to motivate the Employee to maximize the value of the
Company.
In
consideration of the mutual covenants herein contained, and in consideration of
the continuing employment of Employee by the Company, the parties agree as
follows:
1.
Definitions.
For purposes of this Agreement, the following definitions shall
apply:
(a) "Bonus" shall mean a lump sum
payment equal to the amount of salary reductions from November 1, 2009 through
the Triggering Event. The lump sum payment may be in the form
of cash, freely trading stock, or equivalent as declared by the Board of
Directors in its sole discretion.
(b) “Cause” shall have the same
meaning as defined in the 2009 Equity Incentive Plan, a copy of which has been
given to Employee.
(c) “Continuous Service” shall have
the same meaning as defined in the 2009 Equity Incentive Plan, a copy of which
has been given to Employee.
(d) “Triggering Event” shall mean
the formal declaration to pay the Bonus by the Board of Directors
based on one of the following events: (1) a Change in Control, as defined in the
2009 Equity Incentive Plan, (2) removal of the “going concern” status rendered
by external audit and as reported in Company filings; (3) intermediate-term
financing which has been determined the Board, in its sole discretion, to merit
the approval of a Bonus; or (4) entry into a material definitive agreement,
which has been determined by the Board, in its sole discretion, to merit the
approval of a Bonus.
2.
Payment of
Bonus. As long as the Employee has maintained Continuous
Service with the Company or its successor from the Effective Date through the
date of a Triggering Event, the Bonus will be paid to the Employee not later
than five (5) business days after the date of the Triggering Event.
3.
Accrual of Right;
Effect of Termination of Employment. No right shall accrue
hereunder in the event that Employee's employment with the Company is terminated
for any reason, with or without Cause, and whether initiated by Employee or by
Company, at any time prior to the date of the Triggering Event.
4.
At-Will
Employment. This Agreement does not guarantee or imply any right to
continued employment for any period whatsoever. The Company and the Employee
acknowledge that the Employee's employment is, and shall continue to be,
at-will, as defined under applicable law. If the Employee's
employment terminates for any reason, all payments of compensation and benefits
shall cease and thereafter the Employee shall not be entitled to any payments,
benefits, damages, awards or compensation except as may otherwise be available
in accordance with the Company's established employee plans and practices or
other agreements with the Company at the time of termination.
5.
Duration. The
terms of this Agreement shall terminate upon the date that all obligations of
the parties hereunder have been satisfied; provided, however, that this
Agreement may be extended for an additional period or periods by resolution
adopted by the Board at any time during the period that the
Agreement
is in effect.
6.
Miscellaneous
Provisions.
(a)
Whole
Agreement. No agreements, representations or understandings (whether oral
or written and whether express or implied) which are not expressly set forth in
this Agreement have been made or entered into by either party with respect to
the subject matter hereof.
(b)
Employment
Taxes. All payments made pursuant to this Agreement will be subject to
withholding of applicable income and employment taxes.
(c)
Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together will constitute one and the same
instrument.
(d) Section
409A. The parties acknowledge and agree that this Agreement is intended
to be exempt from Section 409A of the Internal Revenue Code of 1986, as
amended. The Company may adopt (without any obligation to do so or to
indemnify the Employee for failure to do so) such limited amendments to this
Agreement and appropriate policies and procedures, that the Company reasonably
determines are necessary or appropriate to (i) exempt the Bonus from Section
409A and/or preserve the intended tax treatment of the compensation and benefits
provided with respect to this Agreement or (ii) comply with the requirements of
Section 409A. No provision of this Agreement shall be interpreted or
construed to transfer any liability for failure to comply with the requirements
of Section 409A from the Employee to the Company or any of its affiliate,
employees or agents.
IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of
the Company by its duly authorized officer, as of the day and year first above
written.
| COMPANY |
|
|
| By: /s/ Xxxx XxXxxxxx | ||
| Title: President & CEO | ||
| EMPLOYEE: | /s/ Xxxxxx Xxxxxxx |
