EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made this 25th day of August
2014, (the "EFFECTIVE DATE") by and between IVDesk Holdings, Inc. (the
"COMPANY") and Xxxx Xxxxxxx ("EMPLOYEE").
RECITALS
A. The Company desires to employ Employee in accordance with the terms of this
Agreement.
B. The Company and Employee desire to enter into this Agreement.
AGREEMENT
In consideration of the above recitals and the promises set forth in
this Agreement, the parties agree as follows:
1. NATURE AND CAPACITY OF EMPLOYMENT. The Company hereby agrees to employ
Employee, pursuant to the terms of this Agreement. As of the Effective
Date, Employee's title shall be Chief Executive Officer ("CEO"). Employee
agrees to perform, or be available to perform, on a full-time basis, the
functions of this position and such other duties as assigned by the
Company, pursuant to the terms of this Agreement. Employee also agrees to
serve the Company as a member of its Board of Directors. In the event that
Employee's employment with the Company ends for any reason, Employee shall
immediately resign from the Board.
2. AT-WILL EMPLOYMENT. Employee understands that Employee's employment with
the Company is at will and may be terminated by either the Employee or the
Company for any reason at any time, with or without advance notice.
Notwithstanding the foregoing, Employee will be eligible for separation pay
if the Company terminates him without Cause in accordance with and on the
conditions set forth in Section 6 below.
3. COMPENSATION
3.1. ANNUAL BASE SALARY. As of the Effective Date, Employee's annualized
gross base salary shall be $200,000.00, which salary shall be earned
by Employee on a pro rata basis as Employee performs services for the
Company and which salary shall be paid in accordance with the
Company's regular payroll practices. Employee's compensation is
subject to review and change by the Company in its sole discretion
from time to time.
3.2. ISSUANCE OF STOCK OPTIONS: VESTING SCHEDULE. Following Employee's
execution of this Agreement and on the conditions set forth in this
Section, the Company will recommend to the Board of Directors that
Employee be granted an option pursuant to the Company's 2012 Omnibus
Stock Incentive Plan to purchase up to 300,000 shares of the Company's
common stock. This option will vest at a rate of 16.67% on the
six-month anniversary of the Effective Date and monthly thereafter in
equal proportions over a three year period, provided that Employee is
still employed by the Company on each such vesting date. The exercise
price for each share purchased by Employee under the option shall be
the fair market value of the share on the date of the option grant.
Employee agrees that, in order to be eligible to receive the stock
option grant set forth in this Section, the Company's Board of
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Directors must approve the grant to Employee and Employee will also be
required to sign a stock option agreement in a form prepared by and
acceptable to the Company. Such stock option agreement shall provide
that the vesting of any option granted to Employee under this Section
shall be accelerated upon a change of control as set forth in the
stock option agreement.
3.3. PARTICIPATION IN BONUS PLANS: Following Employee's integration into
the Company, the Board of Directors, working with the Employee, may
develop and institute a bonus program that the Employee will
participate in. Said program currently doesn't exist but is planned.
4. EMPLOYEE BENEFITS; PERSONAL TIME OFF (PTO). During employee's employment
with the Company, Employee shall be entitled to participate in all
retirement plans, health plans, and other employee benefits and policies
made available by the Company to its employees generally, as they may be
changed from time to time. Employee acknowledges and agrees that the
Company is under no obligation to Employee to establish and maintain any
employee benefit plan in which Employee may participate, and that the terms
and provisions of any employee benefit plan of the Company are matters
within the exclusive province of the Company's Board of Directors, subject
to applicable law. Upon the termination of Employee's employment, Employee
shall be entitled to continue those benefits as may be required by state or
federal law.
The Company agrees that Employee shall also be entitled to Paid Time Off
("PTO") of up to six (6) weeks per year without reduction of the minimum
annual base salary payable to Employee pursuant to Section 3 of this
Agreement. Such PTO shall be earned and may be used in accordance with the
Company's general paid time off policies, as they may change from time to
time.
5. UNDERTAKINGS OF EMPLOYEE. Employee agrees to spend Employee's full working
time and effort in performance of Employee's duties with the Company so
long as employed by the Company, and Employee will not, during the course
of employment by the Company, without prior written approval of the Board
of Directors of the Company, become an employee, director, officer, agent,
partner of or consultant to, or a stockholder of (except a stockholder of a
public company in which Employee owns less than five percent (5%) of the
issued and outstanding capital stock of such company) any company or other
business entity which is a competitor or significant supplier, or customer
of the Company.
6. SEVERANCE PAY ELIGIBILITY.
6.1. CAUSE DEFINITION. For purposes of this Agreement, "Cause" shall mean
the occurrence of any of the following, as determined by the Company's
Board of Directors in its sole discretion:
(a) conduct by Employee which is (or will be if continued) injurious
to the Company, monetarily or otherwise; or
(b) fraud, misappropriation or embezzlement by the Employee; or
(c) Employee's conviction of a felony crime or a crime of moral
turpitude; or
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(d) Employee's material breach of this Agreement or the Company's
policies.
6.2. SEVERANCE PAY UPON TERMINATION WITHOUT CAUSE AFTER MORE THAN 90 DAYS
OF EMPLOYMENT. In the event that Employee's employment is terminated
by the Company without Cause more than ninety (90) days after the
Effective Date, the Company shall, on the conditions set forth herein,
pay Employee severance pay in a gross amount, before applicable
withholdings, equal to six (6) months of Employee's annualized base
salary at the time of such termination, less the amount of any debt
then owed by Employee to the Company, whether or not such debt is then
due or payable (the "SEVERANCE AMOUNT").
Notwithstanding the foregoing, Employee shall only be entitled to
receive the Severance Amount if Employee signs a Separation Agreement
at the time of termination in a form prepared by and acceptable to the
Company that includes adequate provisions for at least the following:
(i) Employee's general release of any and all legal claims; (ii)
Employee's return of all of the Company's property in Employee's
possession; (iii) nondisparagement of the Company, any affiliated
entities, and their employees and representatives; (iv)
confidentiality of terms; and (v) acknowledgement of Employee's
continuing contractual obligations to the Company, including
Employee's continuing noncompetition, confidentiality, and invention
obligations under Sections 7 through 10 of this Agreement; and (vi)
Employee's forfeiture of ninety percent (90%) of the Severance Amount
upon any breach by Employee of his noncompetition, confidentiality,
and invention obligations under Sections 7, 8 or 9 of this Agreement.
7. CONFIDENTIAL INFORMATION.
7.1. DEFINITION OF CONFIDENTIAL INFORMATION. For purposes hereof,
"CONFIDENTIAL INFORMATION" means any non-public information regarding
the Company or any affiliated entity or Partner, (each, an
"Affiliate") or any of their employees, directors, representatives,
suppliers, vendors, shareholders, members, customers or other third
parties or entities with whom the Company or any Affiliate does
business which the Employee learns or develops during Employee's
application for and/or employment with the Company, whether developed
by Employee or by others and in whatever form, and includes, but is
not limited to, trade secrets, Inventions (as defined below),
financial information, personnel policies and key personnel
information, and information relating to such matters as existing or
contemplated products, services, research and/or development,
insurance arrangements, profit margins, fee schedules, pricing,
design, processes, formulae, business plans, sales techniques,
marketing techniques, training methods, manuals and materials,
policies or practices related to business, personnel or other matters,
computer databases, computer programs, software and other technology,
customer lists, customer preferences or requirements, vendor lists, or
supply information. Any information disclosed to the Employee or to
which the Employee has access during the time of Employee's
application for and/or employment with the Company that Employee
reasonably considers to be Confidential Information, or which the
Company or any Affiliate treats as Confidential Information, will be
presumed Confidential Information.
7.2. RESTRICTIONS. Employee agrees not to, directly or indirectly, use or
disclose any Confidential Information for the benefit of anyone other
than the Company either during Employee's employment with the Company
or after Employee's employment with the Company ends, regardless of
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the reason for such separation of employment. Employee recognizes that
the Confidential Information constitutes a valuable asset of the
Company and hereby agrees to act in such a manner as to prevent its
disclosure and use by any person unless such use is for the benefit of
the Company and in the proper course of Employee's duties with the
Company. Employee's obligations under this paragraph are unconditional
and shall not be excused by any conduct on the part of the Company,
except prior voluntary disclosure by the Company of the information,
other than by Employee.
7.3. RETURN OF CONFIDENTIAL INFORMATION AND OTHER PROPERTY. When Employee's
employment with the Company ends, regardless of the reason for such
separation of employment, Employee will promptly turn over to Company
in good condition all property of the Company or any Affiliate in
Employee's possession or control, including, but not limited to, all
originals, copies of or electronically stored documents or other
materials containing Confidential Information, regardless of who
prepared them. In the case of electronically stored information
retained by Employee outside of Company's electronic systems, Employee
will promptly make a hard copy of such information in paper, audio
recording, disc format or other format as appropriate, turn that hard
copy over to Company, and then destroy Employee's electronically
stored information. Further, Employee agrees to execute written
confirmation that all Confidential Information in the Employee's
possession, or to which the Employee has access, has been turned over
to Company or destroyed.
8. INVENTIONS.
8.1. DEFINITION. The term "INVENTIONS" as used herein shall mean all
concepts (including business opportunities), discoveries,
improvements, products, inventions, and works of authorship (including
literary, pictorial, sculptural, graphic, audio or visual works),
whether published or unpublished, whether patentable or unpatentable,
in whatever form, that are made, conceived, generated or first reduced
to writing, drawing or practice solely by the Employee or jointly by
the Employee with others during Employee's employment by the Company
and for a period of one (1) year after Employee's employment with the
Company ends, regardless of the reason for such separation of
employment, and relating to, or arising out of any developments or
products of, or pertaining to the business of the Company, its
divisions or its subsidiaries (companies in which the Company owns
more than 10% of the voting equity).
8.2. OBLIGATION TO DISCLOSE AND ASSIGN. Employee agrees to promptly
disclose to the Company or its designee any and all Inventions that
relate to the business of the Company and such Inventions shall be the
absolute property of the Company. Upon request by the Company or its
designee and at the Company's expense, and without additional
compensation to the Employee, the Employee agrees to execute all the
instruments deemed necessary by the Company or its designee for the
filing and prosecution of any applications for Letters Patent and/or
copyright registration (or their equivalent in countries other than
the United States) on Inventions and agrees to perform any and all
acts deemed necessary by the Company to aid the Company in securing
the allowance of such applications or registrations.
At the Company's expense, and without additional compensation to the
Employee, the Employee agrees to assign and Employee hereby does
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assign to the Company Employee's entire right, title and interest in
and to all of the Inventions that relate to the business of the
Company and in and to all applications for Letters Patent and/or
copyright registration (or their equivalent in countries other than
the United States) that may be filed upon, and Employee agrees to
execute any documents necessary to make such assignments.
Notwithstanding the foregoing, Employee understands that this
assignment of inventions does not apply to any work of authorship for
which no equipment, supplies, facility or trade-secret information of
the Company was used and which was developed entirely on Employee's
own time, and (a) which does not relate (i) directly to the business
of the Company or (ii) to the Company's actual or demonstrably
anticipated research or development; or (b) which does not result from
any work performed by Employee for the Company.
8.3. PRE-EXISTING INVENTIONS. Employee has identified on EXHIBIT A attached
hereto a complete list of all inventions or improvements which have
been made or conceived or first reduced to practice by Employee alone
or jointly with others prior to Employee's employment by the Company
and which Employee desires to exclude from the operation of this
Agreement. If there is no such list on EXHIBIT A, Employee represents
that Employee has made no such inventions or improvements at the time
of signing of this Agreement.
9. NON-COMPETITION.
9.1. ACKNOWLEDGEMENT. Employee acknowledges that (a) Employee's services to
be performed for Company are of a special and unique nature; (b) the
Company operates in a highly competitive environment and would be
substantially harmed if Employee were to compete with Company or
divulge its confidential information; (c) Employee has received
valuable and sufficient consideration for entering into this
Agreement, including but not limited to the Company's offer of
employment to Employee under the this Agreement and the payments and
benefits associated with that employment, and receipt of the Company's
Confidential Information and (d) the provisions of this Section,
including all of its subparts, are reasonable and necessary to protect
the Company's business.
9.2. COVENANT NOT TO COMPETE. Employee agrees that during Employee's
employment with the Company and for an additional period of two years
(2) following Employee's termination of employment with the Company,
regardless of the reason for such termination (the "NONCOMPETE
PERIOD"), Employee shall not, within any geographic area in which the
Company is engaged in developing, manufacturing, marketing,
distributing, or selling its products and services, directly or
indirectly, hold any ownership interest in (except a stockholder of a
public company in which Employee owns less than five percent (5%) of
the issued and outstanding capital stock of such company), manage,
control, serve on the Board of Directors of, or render services of any
kind in any capacity to any person or entity engaged in the
development, manufacture, marketing, distribution, or sale of any
services or products of the same general type, which perform similar
functions, or which are used for the similar purposes as any product
or service that is then or was during Employee's last two (2) years of
employment with the Company being developed, manufactured, marketed,
distributed or sold by the Company.
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Employee understands and acknowledges that at the present time, (i)
the products and services of the Company encompassed by this Section
include Private Cloud Computing and (ii) the geographic market in
which the Corporation is actively marketing such products and services
is the United States. Employee understands and acknowledges, however,
that the foregoing description of Company's products and services and
geographic market may change, and the provisions of this Section shall
apply to the Company's products and services and its geographic
market, as they may change from time to time.
9.3. NON-SOLICITATION OF CUSTOMERS OR PROSPECTIVE CUSTOMERS. Employee
agrees that, during the Non-Compete Period, Employee shall not
directly or indirectly (a) canvass, solicit or accept business
concerning any service or product that competes with a service or
product of the Company from any person or entity who is then or was
during Employee's last two years (2) years of employment with the
Company a customer or a prospective customer of the Company with whom
Employee had contact while an Employee of the Company or about whom
Employee has Confidential Information; or (b) otherwise take any
action to divert business from or curtail the business of the Company.
9.4. NON-SOLICITATION OF EMPLOYEES OR BUSINESS RELATIONS. Employee agrees
that, during the Non-Compete Period, Employee shall not, directly or
indirectly, take any action to solicit, recruit, encourage or assist
any employee or any supplier, vendor, consultant, independent
contractor, subcontractor or any other business relation (each a
"BUSINESS RELATION") of the Company to terminate, curtail or lessen
his, her or its relationship with the Company. Employee further agrees
that Employee's obligations set forth in this Section shall apply
regardless of whether Employee initiates contact with a Company
employee or Business Relation or the Company employee or Business
Relation initiates contact with the Employee,
9.5. DISCLOSURE OF OBLIGATIONS. During the Non-Compete Period, Employee
will, prior to accepting employment or any other business relationship
with any other person or entity, inform that person or entity of
Employee's obligations under this Agreement.
9.6. EXTENSION OF NON-COMPETE PERIOD. If the Company obtains a court ruling
or judgment finding that Employee has violated any portion of Section
9, Employee agrees that the Non-Compete Period will be extended for a
period of time equal to the period of time during which Employee was
found to be in breach of this Section 9.
10. USE OF NAME AND PHOTOGRAPH. Employee consents to the present or future use
and any reproduction of Employee's name and photograph, or either, in any
facilities brochure or other advertising or publications of the Company.
Employee further consents to the entering of Employee's name and telephone
number onto any employee list which is public as to other Company employees
and Employee waives any rights to prevent Company employees from obtaining
this information. Employee promises to hold the Company harmless for
allowing its employees to access this information and promises to hold the
Company harmless for all non-willful disclosures to anyone who is not a
Company employee.
11. EMPLOYEE REPRESENTATIONS AND WARRANTIES. Employee represents and warrants
that the performance of Employee's duties for the Company and Employee's
obligations under this Agreement does not and will not cause Employee to
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violate the terms of any agreement, commitment or understanding Employee
has with any other person or entity, including, but not limited to, any
invention or intellectual property assignment agreement, any noncompete or
nonsolicitation agreement, or any agreement to keep in confidence the trade
secrets, proprietary, or other confidential information of such person or
entity. Employee also represents and warrants that Employee has not brought
and will not bring to the Company, or use for the benefit of the Company,
any materials, information and/or documents of any person or entity that
are not generally available to the public or within the Company's trade,
unless Employee has obtained written authorization from any such person or
entity permitting Employee to retain and use said materials, information
and/or documents. Employee hereby further represents and warrants that
Employee's use (or the Company's use) of any materials, information and/or
documents Employee may bring to the Company for use in Employee's
employment will not violate the intellectual property rights of any other
person or entity. Employee further agrees to indemnify and hold harmless
the Company against any expenses, damages, costs, losses or fees (including
legal fees) incurred by Company in any suit, claim or proceeding brought by
any third party based on a fact which constitutes a breach of the warranty
set forth in this Section.
12. MISCELLANEOUS.
12.1.INTEGRATION. This Agreement embodies the entire agreement and
understanding among the parties relative to subject matter hereof and
supersedes all prior agreements, understandings, or past practices,
whether written or oral, relating to such subject matter.
12.2.PAYMENTS. All amounts paid under this Agreement shall be subject to
normal withholdings or such other treatment as required by law.
12.3.SURVIVAL OF SECTIONS 7 - 13. Employee's confidentiality, inventions,
and noncompete and other obligations set forth at Sections 7 through
13 of this Agreement shall survive the termination of this Agreement
and Employee's termination of employment with the Company, regardless
of the reason for such terminations.
12.4.APPLICABLE LAW; VENUE. This Agreement and the rights of the parties
shall be governed by and construed and enforced in accordance with the
laws of the state of Minnesota, without regard to any state's choice
of law principles or rules. The venue for any action hereunder shall
be in the state of Minnesota, whether or not such venue is or
subsequently becomes inconvenient, and the parties consent to the
jurisdiction of the courts of the state of Minnesota, County of
Hennepin, and the U.S. District Court, District of Minnesota.
12.5.COUNTERPARTS. This Agreement may be executed in several counterparts
and as so executed shall constitute one agreement binding on the
parties hereto.
12.6.BINDING EFFECT. This Agreement is personal in nature to the Employee
and the Employee shall not assign any right or obligation hereunder in
whole or in part, without the prior written consent of the Company,
and any attempt to do so shall be void. The rights and obligations of
the Company under this Agreement may, in the discretion of the
Company, be transferred to the Company's successor and assigns.
12.7.NOTICES. All notices, requests and other communications hereunder
shall be given in writing and deemed to have been duly given or served
if personally delivered, sent by a confirmed receipt facsimile, or
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sent by first class, certified mail, return receipt requested, postage
prepaid, to the party at the address as provided below, or to such
other address as such party may hereafter designate by written notice
to the other party:
1. If to the Company, to the address of its then principal office.
2. If to Employee, to the address last shown in the records of the
Company.
12.8.REMEDIES. Employee acknowledges and agrees that a violation of this
Agreement, including but not limited to Employee's obligations under
Sections 7 through 11, would cause irreparable harm to Company, and
that Company's remedy at law for any such violations would be
inadequate. In recognition of the foregoing, Employee agrees that, in
addition to any other relief afforded by law or this Agreement,
including damages sustained by a breach of this Agreement, and without
any necessity of proof of actual damages or posting any bond, Company
will have the right to enforce this Agreement by specific remedies
which include, among other things, temporary and permanent
injunctions.
12.9.MODIFICATION BY THE PARTIES. This Agreement shall not be modified or
amended except by a written instrument signed by the parties. In
addition, no waiver of any provision of this Agreement shall be
binding unless set forth in a writing signed by the party effecting
the waiver. Any waiver shall be limited to the circumstance or event
specifically referenced in the written waiver document and shall not
be deemed a waiver of any other term of this Agreement or of the same
circumstance or event upon any recurrence thereof.
12.10. SEVERABILITY; BLUE PENCIL. The invalidity or partial invalidity of
any portion of this Agreement shall not invalidate the remainder
thereof, and said remainder shall remain in full force and effect.
Moreover, if one or more of the provisions contained in this Agreement
shall, for any reason, be held to be excessively broad as to scope,
activity, subject or otherwise, so as to be unenforceable at law, such
provision or provisions shall be construed by the appropriate judicial
body by limiting or reducing it or them, so as to be enforceable to
the maximum extent compatible with then applicable law.
12.11. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
12.12. THIRD PARTY BENEFICIARIES. Employee acknowledges and agrees that the
Affiliates are third party beneficiaries of this Agreement and may
enforce the provisions of this Agreement that confer benefits on them
as if they were each a signatory to this Agreement.
12.13. OPPORTUNITY TO OBTAIN ADVICE OF COUNSEL. Employee acknowledges that
Employee has been advised by the Company to obtain legal advice prior
to executing this Agreement, and that Employee had sufficient
opportunity to do so prior to signing this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
herein first above written.
COMPANY:
IVDesk Holdings, Inc.
-----------------------------------
By: Xxxxxxx Xxxxxxxx
Its: CEO
EMPLOYEE:
-----------------------------------
Xxxx Xxxxxxx
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EXHIBIT A
PRE-EXISTING INVENTIONS AND IMPROVEMENTS
NAME/TITLE OF
INVENTION OR IMPROVEMENT* DESCRIPTION OF INVENTION OR IMPROVEMENT
-------------------------- ---------------------------------------
* Note: If no Inventions or Improvements are listed above, Employee executing
the attached Confidentiality, Non-Solicitation and Invention Agreement
represents that none exist.