EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT
10.1
This
EMPLOYMENT AGREEMENT (this "Agreement")
is
made and entered into as of this 18th day of July 2008 (the “Effective
Date”),
by
and between FOLDERA, INC., a Nevada corporation ("Employer"),
and
XXXXX X. XXXXXXX ("Employee").
RECITALS
A. Employer
desires to obtain the benefit of the services of Employee and Employee desires
to render such services to Employer.
B. Employer
and Employee desire to set forth the terms and conditions of Employee’s
employment with Employer on the terms and subject to the conditions of this
Agreement.
AGREEMENT
In
consideration of the foregoing recitals and of the mutual covenants and
conditions contained herein, the parties, intending to be legally bound, agree
as follows:
1. Term.
Employer agrees to employ Employee, and Employee agrees to serve Employer,
in
accordance with the terms of this Agreement, for a term beginning on the
Effective Date and continuing for a period of three (3) years thereafter unless
earlier terminated in accordance with the provisions hereof. To the extent
that
Employee remains employed by Employer after the expiration of the initial Term,
and the initial Term of this Agreement is not otherwise renewed or continued
in
writing by Employer and Employee, then Employee’s employment status shall no
longer be subject to the terms and conditions of this Agreement and shall be
“at-will” without any continuing right to employment by Employer.
2. Employment
of Employee.
(a) Specific
Positions.
Employer and Employee hereby agree that, subject to the provisions of this
Agreement, Employer will employ Employee and Employee will serve Employer as
the
President and Chief Executive Officer of Employer. Employee shall perform such
usual and customary duties of such office and as may be delegated to Employee
from time to time by Employer, subject always to the policies as determined
from
time to time by Employer. In addition, Employee’s reporting relationship shall
initially be determined by the Chief Executive Officer of Employer. Employer
reserves the right to change Employee's position and reporting relationship
subject to the needs of its business.
(b) Promotion
of Employer's Business.
During
the term of this Agreement, Employee shall not engage in any business
competitive with Employer. Employee agrees to devote his full business time,
attention, knowledge, skill and energy to the business, affairs and interests
of
Employer and matters related thereto, and shall use his best efforts and
abilities to promote Employer's interests; provided,
however,
that
Employee is not precluded from devoting reasonable periods of time required:
(i)
for serving as a director or committee member of any organization that does
not
compete with Employer or that does not involve a conflict of interest with
Employer; or (ii) for managing his personal investments; so long as in either
case, such activities do not materially interfere with the regular performance
of his duties under this Agreement
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(c) Principal
Office.
Employee's principal office and normal place of work shall be at Employer's
Executive offices in Southern California or as otherwise assigned by Employer
consistent with the needs of its business. Employee's normal place of work
shall
be defined as any office where Employee is consistently requested by Employer
to
commute to more than one day per week.
3. Salary.
Employer shall pay to Employee during the term of this Agreement a base salary
("Base
Salary")
of
$250,000 per year payable in accordance with Employer’s normal payroll. The Base
Salary may be reviewed annually thereafter and may be increased (but not
decreased) at Employer's sole discretion in accordance with Employer's normal
review process. Notwithstanding the foregoing, and regardless of payments of
partial salary, upon Employer‘s obtaining financing by the fourth quarter 2008
(the “financing”),
in
the original minimum principal amount of $5,000,000 executed by Employer, the
Base Salary shall then come into effect.
4. Bonuses. In
addition to the Base Salary, Employee shall be entitled to the following
additional compensation:
(a) Bonus
Plans Established by Employer.
Subject
to Employee’s meeting applicable eligibility requirements, Employee shall be
entitled to participate in any bonus plan that may be established by the Board
of Directors of Employer (the “Board”)
for
the benefit of Employer’s employees. Nothing in this Section 4(a), however,
shall be construed or interpreted to require Employer to adopt or implement
any
such bonus plan.
(b) Discretionary
Bonuses.
The
Employee shall be entitled to participate in discretionary bonuses and incentive
payments which are now or become authorized and declared by the CEO/President
or
its authorized representative and approved by the Board of Directors. The
Employee shall be entitled to an annual cash performance bonus of up to 100%
of
base salary, plus stock options at the discretion of the Board of Directors,
depending upon the achievement of specific goals set by the CEO/President.
5. Stock
Options.
(a) Employer
shall grant to Employee, effective as of the Effective Date, an option to
purchase 69,338,810 [pre-reverse stock split] shares (the “Original
Option Shares”)
of
Employer common stock, at an exercise price in an amount equal to $0.03 per
share of common stock, which is at least equal to the fair market value of
the
common stock of Employer as of the Effective Date, with vesting as follows:
one
third of all option shares shall vest upon commencement of employment with
Employer; one third of all option shares shall vest ninety (90) days from the
commencement of employment with Employer; and, the remaining one third of all
option shares shall vest one hundred eighty (180) days from the commencement
of
employment with Employer.
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(b) If
at any
time during the term of this Agreement, the Employee is either terminated
without cause, or for good reason, or death or disability, such Employee shall
be immediately vested in all of his remaining option shares (as designated
in 5a
above).
6. Benefits.
(a) Fringe
Benefits.
During Employee's employment by Employer under this Agreement, Employee shall
be
eligible for participation in and shall be covered by any and all such medical,
dental, life, disability and other voluntary insurance plans and such other
similar benefits generally available to other employees of Employer in similar
employment positions, on the same terms as such employees, subject to meeting
applicable eligibility requirements; provided,
however,
that
Employer shall pay or reimburse Employee for the actual cost of his and his
dependents’ medical and dental insurance premiums.
(b) Reimbursements.
During Employee's employment with Employer under this Agreement, Employee shall
be entitled to receive prompt reimbursement of all reasonable expenses incurred
by Employee in performing services hereunder, including all expenses of travel
at the request of, or in the service of, Employer provided that such expenses
are incurred and accounted for in accordance with the policies and procedures
established from time to time by Employer.
(c) Nonqualified
Deferred Compensation.
In its sole and absolute discretion, Employer may establish a nonqualified
deferred compensation plan for the benefit of Employee. The terms and conditions
of such arrangement shall be set forth in a separate plan document, which shall
specify the obligations of Employer and Employee. Employer contributions may
be
subject to vesting requirements and payment of compensation, and may require
Employee to sign a release agreement in favor of Employer. The Plan shall only
be available to a "select group of management" as defined under Employee
Retirement Income Security Act of 1974. Any Plan assets that have been set
aside
to fund Employer's obligation to make payment of deferred compensation shall
be
at all times subject to Employer’s general creditors.
7. Termination.
(a) Termination
for Cause.
Employer shall have the right, exercisable immediately upon written notice,
to
terminate Employee's employment for "Cause."
(i) Definition
of Cause.
As used
herein, "Cause"
means
any of the following: (A) illegal use of narcotics by Employee; (B) consistent
public drunkenness by Employee which materially and adversely affects Employee's
performance under this Agreement; (C) Employee is convicted by a court of
competent jurisdiction, pleads "no contest" to a felony or any other conduct
of
a criminal nature involving moral turpitude (other than minor traffic
violations); (D) Employee intentionally engages in fraud, embezzlement or any
other illegal conduct substantially detrimental to the business or reputation
of
Employer, regardless of whether such conduct is designed to defraud Employer
or
others; (E) Employee imparts material confidential information relating to
Employer or its business to competitors or to other third parties other than
in
the course of carrying out Employee's duties; (F) Employee refuses to perform
his duties hereunder or otherwise breaches any material covenant, warranty
or
representation of this Agreement, or Employee's Confidential Information and
Assignment of Inventions and Copyrights Agreement with Employer, and fails
to
cure such breach (if such breach is then capable of being cured) within 10
business days following written notice thereof specifying in reasonable detail
the nature of such breach, or if such breach is not capable of being cured
in
such time, a cure shall not have been diligently initiated within such 10
business day period, (G) violation of any rules, policies or procedures of
Employer, as documented in Employer’s employee manual, associate guidebook or
other written or electronically published company policies; (H) Employee’s
willful failure to follow any lawful directive of the Board; and (I) any action
on the part of Employee which materially discredits or disparages Employer
or
its reputation.
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(ii) Effect
of Termination.
Upon
termination in accordance with this Section 7(a), Employee shall be entitled
to
no further payments from Employer under this Agreement, except for the payments,
of cash and in-kind, provided for under Sections 3 and 6 of this Agreement
accrued hereunder through, but not including, the effective date of such
termination. Employer's exercise of its right to terminate for Cause shall
be
without prejudice to any other remedy to which it may be entitled at law, in
equity or under this Agreement.
(b) Voluntary
Termination.
Employee may terminate his employment at any time by giving no less than 30
days' written notice to Employer. Employer reserves the right to accept
Employee's voluntary termination immediately, without notice and without any
further payment obligation except as described below.
(i) No
Reason.
Upon
termination in accordance with this Section 7(b), except as otherwise provided
in Section 7(b) (ii), below, Employee shall be entitled to no further payments
from Employer under this Agreement, except for the payments, of cash and
in-kind, provided for under Sections 3 and 6 of this Agreement accrued hereunder
through, but not including, the effective date of such termination.
(ii) Good
Reason.
Notwithstanding anything to the contrary in Section 7(b) (i), above, if Employee
terminates his employment under this Section 7(b) for Good Reason (as defined
below), Employee shall be entitled to receive from Employer all of the
compensation and benefits provided for in Section 7(d), below. As used herein,
"Good
Reason"
means
any of the following: (A) the assignment to Employee of duties materially
inconsistent with those of other employees of Employer in similar employment
positions, and Employee provides written notice to Employer within 60 days
of
such assignment that such duties are materially inconsistent with those duties
of such similarly-situated employees, and Employer fails to release Employee
from his obligation to perform such inconsistent duties and to re-assign
Employee to his customary duties within 20 business days after Employer's
receipt of such notice; or (B) if, without the consent of Employee, Employee's
normal place of work is or becomes situated more than 25 linear miles from
Employee's personal residence as of the Effective Date, or (C) a failure by
Employer to comply with any other material provision of this Agreement which
has
not been cured within 60 days after notice of such noncompliance has been given
by Employee to Employer, or if such failure is not capable of being cured in
such time, a cure shall not have been diligently initiated by Employer within
such 60 day period.
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(c) Termination
Due to Death or Disability.
This
Agreement shall automatically terminate upon the death of Employee. In addition,
if any disability or incapacity of Employee to perform his duties as the result
of any injury, sickness or physical, mental or emotional condition continues
for
a period of 70 consecutive days or a total of 70 days in any 90-day period,
Employer may terminate Employee's employment upon written notice to Employee.
Upon termination in accordance with this Section 7(c), Employee (or Employee's
estate, as the case may be) shall be entitled to those payments, of cash and
in-kind, provided for under Sections 3 through 6, inclusive, of this Agreement
accrued hereunder through, but not including, the date of death or, in the
case
of disability, the date of termination. During such time that Employee is unable
to perform his duties as a result of any injury, sickness or physical, mental
or
emotional condition, Employer, at its option, may reduce the Base Salary by
the
amount, if any, of the disability insurance or similar benefits for which
Employee receives as a result of such injury, sickness or physical, mental
or
emotional condition.
Such
reductions to the Base Salary, if any, shall be limited to benefits actually
received by Employer from disability insurance plans paid for by Employer or
from state or federal government mandated disability plans. The Base Salary
shall not be reduced by any disability insurance benefits received by Employee,
if any, from plans purchased by Employee.
(d) Termination
Without Cause.
Employer shall have the right, exercisable upon written notice, to terminate
Employee's employment under this Agreement for any reason other than set forth
in Sections 7(a) and (c), above, at any time during the Term. If Employee is
so
terminated by Employer pursuant to this Section 7(d) during the Term,
Employer
agrees to (i) pay
to Employee the Base Salary, and (ii) provide the same medical, dental,
long-term disability and life insurance pursuant to Section 6(a) to which
Employee was entitled hereunder as of the date of termination provided, however,
that in the case of such medical and dental insurance, that Employee makes
a
timely election for continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”),
in
each case (i.e.,
the
Base Salary and insurance), until the earlier to occur of (A) the
expiration of the remaining portion of the Term of this Agreement, or
(B) the nine-month period commencing on the date Employee is terminated.
Employer shall make such payments in accordance with its regular payroll
schedule.
If any
such payments are due Employee upon a Cessation of Business, all remaining
payments shall become immediately due and payable upon the occurrence of such
Cessation of Business.
(f) Change
in Control.
If
during the Term of this Agreement there are both:
| i. |
a
"change in control" of the Employer; and
|
| ii. |
a
termination of the Employee without cause pursuant to Section
7.d.,
|
| iii. |
or
a termination by the Employee for "good reason"; then the Employee
shall
be entitled to the following compensation and benefits:
|
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(1) In
addition to any benefits that had accrued to the Date of Termination, the
Employer shall pay to the Employee his base salary through the remaining term
of
this Agreement, based on the rate in effect at the time of
Termination.
The
term
"change in control" as applied to the Employer is defined solely as; (1) any
person (as the term is used in Sections 13(d) and 14(d) of the Exchange Act)
is
or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly of securities of the Employer representing 50%
or
more of the combined voting power of the Employer’s outstanding securities; (2)
a reorganization, merger, consolidation, sale of all or substantially all of
the
assets of the Employer or a similar transaction in which the Employer is not
the
surviving entity.
(g) Exclusive
Remedy.
The payments contemplated by this Agreement shall constitute Employee's
exclusive and sole remedy for any claim that Employee might otherwise have
against Employer under this Agreement which, but for Employee's termination
of
employment hereunder, might otherwise be due and payable by Employer to
Employee. Employee covenants not to assert or pursue any such remedies, other
than an action to enforce the payments due to Employee under this Agreement.
Nothing in this Section 7(e), however, shall be construed to bar, preclude
or
otherwise limit Employee's right to bring an action against Employer if
Employee's termination of employment with Employer was otherwise unlawful or
in
violation of public policy.
8. Miscellaneous.
(a) Withholdings.
All payments to Employee hereunder shall be made after reduction for all
federal, state and local withholding and payroll taxes, all as determined under
applicable law and regulations, and Employer shall make all reports and similar
filings required by such law and regulations with respect to such payments,
withholdings and taxes.
(b) Succession.
This Agreement shall inure to the benefit of and shall be binding upon Employer,
its successors and assigns. The obligations and duties of Employee hereunder
shall be personal and not assignable.
(c) Notices.
Any and all notices, demands, requests or other communications hereunder shall
be in writing and shall be deemed duly given when personally delivered to or
transmitted by overnight express delivery or by facsimile to and received by
the
party to whom such notice is intended (provided the original thereof is sent
by
mail, in the manner set forth below, on the next business day after the
facsimile transmission is sent), or in lieu of such personal delivery or
overnight express delivery or facsimile transmission, on receipt when deposited
in the United States mail, first-class, certified or registered, postage
prepaid, return receipt requested, addressed to the applicable party at the
address set forth below such party's signature to this Agreement. The parties
may change their respective addresses for the purpose of this Section 8(c)
by
giving notice of such change to the other parties in the manner which is
provided in this Section 8(c).
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(d) Entire
Agreement.
This Agreement contains the entire agreement of the parties relating to the
subject matter hereof, and it replaces and supersedes any prior agreements,
whether oral or written, between the parties relating to said subject
matter.
(e) Headings.
The headings of Sections herein are used for convenience only and shall not
affect the meaning or contents hereof.
(f) Waiver;
Amendment.
No provision hereof may be waived except by a written agreement signed by the
waiving party. The waiver of any term or of any condition of this Agreement
shall not be deemed to constitute the waiver of any other term or condition.
This Agreement may be amended only by a written agreement signed by the parties
hereto.
(g) Severability.
If any of the provisions of this Agreement shall be held unenforceable by the
final determination of a court of competent jurisdiction and all appeals
therefrom shall have failed or the time for such appeals shall have expired,
such provision or provisions shall be deemed eliminated from this Agreement
but
the remaining provisions shall nevertheless be given full effect. In the event
this Agreement or any portion hereof is more restrictive than permitted by
the
law of the jurisdiction in which enforcement is sought, this Agreement or such
portion shall be limited in that jurisdiction only to the extent required by
the
law of that jurisdiction.
(h) Governing
Law.
This Agreement shall be governed by and construed in accordance with the laws
of
the State of California.
(i) Counterparts.
This Agreement may be executed in any number of counterparts each of which
shall
be enforceable against the parties executing such counterparts, and all of
which
together shall constitute a single document. Except as otherwise stated herein,
in lieu of the original documents, a facsimile transmission or copy of the
original documents shall be as effective and enforceable as the
original.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
set forth above.
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"EMPLOYER":
a
Nevada corporation
By:
/s/
Xxxx
Xxxxxxxxx
Xxxx
Xxxxxxxxx
Chief
Executive Officer
|
"EMPLOYEE":
XXXXX
X. XXXXXXX
/s/
Xxxxx X.
Xxxxxxx
Xxxxx
X. Xxxxxxx
|
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