EMPLOYMENT AGREEMENT
Exhibit 10.12
This Employment Agreement (the “Agreement”) is made by and between Brand Engagement Network, Inc. (“Employer’’), and Xxxx Xxxxxxxx (“Executive”), in consideration of the mutual covenants and agreements hereinafter set forth. Employer and Executive are sometimes collectively referred to herein as the “Parties.”
WHEREAS, Employer wishes to employ Executive as its Chief Financial Officer.
WHEREAS, Employer has entered into a Business Combination Agreement and Plan of Reorganization, dated as of September 7, 2023 (the “BCA”), with DHC Acquisition Corp. (“DHCA”), BEN Merger Subsidiary Corp., a direct, wholly owned subsidiary of DHCA (“Merger Sub”), and, solely with respect to certain provisions thereto, DHC Sponsor, LLC, pursuant to which, upon the terms and subject to the conditions of the BCA, Employer will merge with and into Merger Sub (the “Merger”), with Employer surviving the Merger as a direct, wholly-owned subsidiary of DHCA (the closing date of the Merger, the “Closing Date”).
1. DEFINITIONS:
“Affiliates” as used in this Agreement shall mean any entities under common management and control of Employer, and all references to Employer herein shall include all Affiliates of Employer, unless the context requires otherwise.
“Business” shall mean the business engaged in by Employer within the immediately preceding one year period, and potential business the Employer has contemplated pursuing in the preceding six month period in which Employer has invested material resources during that six month period.
“Change in Control” shall mean:
(a) Acquisition of the Employer’s stock (other than by DHCA) or other equity such that more than 50% of the total fair market value or total voting power of the Employer is acquired by one or more persons or entities acting as a group; or
(b) The sale or other disposition of all, or substantially all, of the Employer, whether by merger, acquisition, or sale of all or substantially of the Employer’s operating assets (other than with DHCA); or
(c) any other transaction (excluding the transaction with DHCA) that the Board of Directors determines should be considered to constitute a Change in Control (with due consideration of the rules set forth under Treasury Regulation Section 1.409A-3(i)(5)), at the Administrator’s sole and absolute discretion.
“Customer” as used in this Agreement shall include any Entity: (a) to which Employer provided products or services for the Business within the one (1) year period immediately preceding the termination of Executive’s employment with Employer.
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 1 |
“Good Cause” means any of the following events which are not cured within 10 business days of Employer providing notice to Executive of such events, to the extent the Employer in its discretion deems such event(s) capable of being cured:
(a) Executive’s material breach of this Agreement or any other agreement between Executive and Employer;
(b) Executive’s dishonesty or fraudulent conduct in dealings with Employer or any Customer;
(c) Executive’s gross personal misconduct or repeated personal misconduct in dealings with Employer or any Customer, and its or their personnel;
(d) Executive’s willful misconduct or grossly negligent conduct, whether or not in the course of employment, resulting in, or that, if publicized would be reasonably likely to result in, material and demonstrable damage to Employer’s business or reputation;
(e) Executive’s appropriation (or attempted appropriation) of a material business opportunity of Employer, including attempting to secure or securing any personal profit in connection with any duties undertaken under this Agreement;
(f) Executive’s misappropriation (or attempted misappropriation) of funds or property of Employer or any Customer, or its or their personnel;
(g) The conviction of, the entering of a guilty plea or a plea of no contest, or the acceptance of a deferral of adjudication with respect to a felony, the equivalent thereof, or any misdemeanor involving theft or dishonesty; or
(h) Executive’s material breach of Employer policy.
“Good Reason” means any of the following events: (a) Employer’s material breach of this Agreement; (b) material diminution of Executive’s title, duties or authority; or (c) relocation without Executive’s consent to a location more than 50 miles from Executive’s home address at execution (excluding, for the avoidance of doubt, any changes contemplated or permitted to the Employer by Section 3 of this Agreement). In order to resign for Good Reason (i) Executive must give Employer written notice specifying with reasonable detail the basis for Executive’s determination that Good Reason exists within thirty (30) days of the first instance of Good Reason, (ii) the Employer must fail to reasonably effect a cure within thirty (30) days of the date Employer receives such notice, and (iii) Executive must terminate Executive’s employment and resigns from all other positions and offices within thirty (30) days after such failure.
“Prospective Customer” as used in this Agreement shall include any Entity: (a) to which Employer submitted a bid or proposal or engaged in substantive negotiations for the sale of products or services for the Business within the six-month period immediately preceding the Closing Date; or (b) to which Employer has submitted a bid or proposal or engaged in substantive negotiations for the sale of products or services for the Business within the most recent six-month period prior to Executive’s termination of employment with Employer.
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 2 |
“Entity” as used in this Agreement shall include persons, partnerships, firms, associations, corporations, or business organizations.
2. TERM: Subject to Section 7, the term of this Agreement is the period beginning on October 1, 2023, and ending on the date of Executive’s termination of employment for any reason (the ‘‘Term’’). This Agreement terminates, supersedes and replaces all prior employment agreements between the Employer and Executive.
3. TITLE AND DUTIES: Employer hereby employs Executive on a full-time basis as Chief Financial Officer, reporting directly to the CEO, with powers and duties customary for such position. Executive’s primary work location will initially be remote. Executive will be expected to travel as reasonably necessary for the Business. Executive’s employment relationship is at-will. Either Executive or the Employer may terminate the employment relationship at any time, with or without Good Cause or advance notice. Upon termination of Executive’s employment for any reason, Executive shall resign from all positions and terminate any relationships as an employee, advisor, officer or director with the Employer and any of its affiliates, each effective on the date of termination.
Executive agrees to, and it will be a condition of Executive’s employment that Executive, remain a United States resident and remain authorized to work in the United States, unless XXX expressly agrees in writing to Executive’s relocation outside of the United States. Additionally, Executive agrees: (a) if requested during the Term, to begin reporting to XXX’s Santa Xxxxxx office, or such other office as XXX xxx request that is within 50 miles of either Executive’s current home or Executive’s then current home, and (b) that Executive will travel as reasonably requested and/or is required to fulfill Executive’s job duties. Whether or not requested by XXX, Executive may choose to work from BEN’s Santa Xxxxxx office. In the event of Executive’s relocation of employment, Executive agrees, as a material term of this Agreement and Executive’s continued employment with the Employer, to execute all necessary amendments to this Agreement an other documents and agreements required by Employer. For the avoidance of doubt, if Xxxxxxxx agrees to Executive’s relocation, then the foregoing is not intended to permit Employer to unilaterally relocate Executive back to within 50 miles of his current home.
4. EXTENT OF SERVICES: Executive agrees to devote Executive’s entire and undivided business time, attention, effort, care, skill, and energies to the business of Employer and the duties and responsibilities assigned to Executive by Employer, which may be changed at any time and from time to time at Employer’s sole discretion. Executive shall not, during the Term of this Agreement, (i) engage in any other business activity unless Executive has obtained the prior written consent of an officer of Employer to engage in such activity, unless such activity by Executive is for passive investment purposes only and will not require any services to be rendered by Executive, or (ii) is for civic or charitable purposes which would not conflict or interfere with the performance of Executive’s duties hereunder. Executive shall make a request to Employer for the Approval for Executive to sit on boards of directors and committees, and Employer shall have the right in its sole discretion to approve or deny such a request. Notwithstanding the foregoing, (a) Executive shall be permitted to serve in a management advisory role for American Tire Distributors, Inc. for up to six (6) months from the beginning of the Term, and to continue to serve on the board of directors and audit committee of KPI Integrated Solutions; and (b) Executive’s passive investment in a company that is not engaged in the Business shall not violate this Agreement. Executive’s ownership of less than 5% of the equity of a publicly traded company, regardless of whether they are engaged in the Business, also shall not violate this Agreement.
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 3 |
5. COMPENSATION: For all services rendered by Executive hereunder, Employer shall compensate Executive as follows:
(A) Executive will be paid a base salary (“Salary”) at the annual rate of $500,000, paid in accordance with Employer’s regular pay schedule for its other employees, less applicable taxes and withholding, but in any event not less than twice per month. Executive’s salary shall be reviewed annually for potential increases. Executive’s salary cannot be decreased without Executive’s prior written agreement.
(B) Executive will be eligible to receive a discretionary, cash bonus based on performance metrics to be established annually by the Employer (the “Annual Bonus”). Executive’s target Annual Bonus shall not be less than 70% of Executive’s then current base salary and Executive shall be eligible to receive up to 200% of Executive’s then current base salary as a bonus. Executive must continue to be employed through the date the Annual Bonus is paid in order to earn such bonus.
Notwithstanding any other provision of this Agreement, for 2023, Executive’s annual cash bonus shall not be less than $250,000 payable on or before February 15, 2024, so long as Executive is not terminated for Good Cause and does not provide notice of resignation without Good Reason prior to February 15, 2024 (the “2023 Bonus”).
(C) Executive will, during the Term of this Agreement, be permitted to participate pursuant to the terms thereof in all employee benefit plans generally available to employees of Employer.
(D) Each year, Executive will be entitled to sick leave as required by local law and 30 days of paid time off (“Annual PTO”) consistent with Employer’s existing policies and as such policies may be amended from time to time, in addition to regular holidays of not less than eight (8) per year. If not used each year, by the end of the term of this Agreement, or at the time the employment of Executive ends for any reason, Executive will be entitled to payment for all unused earned vacation time. Such payment shall be made on the last day of Executive’s employment. Executive shall receive and be deemed to have earned his Annual PTO on January 1 of each year. Unused Annual PTO shall carry over to the next year, consistent with Employer’s existing policies and as such policies may be amended from time to time, but Executive shall not be permitted to take unreasonable or excessive Annual PTO in any given year.
(E) Executive will receive a bonus on the Closing Date for the successful closing of the Merger in the amount of $150,000 so long as Executive is not terminated for Good Cause and does not provide notice of resignation without Good Reason prior to the Closing Date (the “Merger Bonus”).
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 4 |
(F) Subject to approval by the board of directors of Employer or its applicable designee, Executive will be concurrently with such board approval awarded stock options pursuant to BEN’s 2021 Incentive Stock Option Plan (the “ISOP”) for the acquisition of 1,000,000 common shares, with an exercise price equal to the fair market value of BEN’s common stock at the date of grant of such options and vesting over a three-year period. The award of options will be subject to certain customary terms as set forth in a separate award letter in addition to the terms of the ISOP. Executive understands and agrees, however, that on the Closing Date, each option exercisable for ISOP shares that is outstanding as of immediately prior to the closing of the Merger will be converted into an option exercisable for shares of DHCA, with number of shares subject to such converted options and the exercise price adjusted proportionately in accordance with the Exchange Ratio (as defined in the BCA). Subject to the ISOP, if the Merger does not close and the BCA is terminated in accordance with its terms and Employer remains a private company, then for each of the next three years following the termination of the BCA, subject to approval by the board of directors of Employer, Executive will also be awarded fully vested options that entitle Executive to acquire at least 55,000 common shares in BEN. If Employer terminates, replaces, or amends the ISOP then Employer shall take such reasonable steps necessary (if any) to equitably adjust Executive’s award.
6. EXPENSES: Executive shall be reimbursed for reasonable and necessary out-of-pocket, work-related expenses according to Employer’s standard expense and mileage reimbursement policies.
7. TERMINATION: Executive’s term of employment, compensation, and any and all other rights of Executive under this Agreement, including Executive’s employment by Employer, may be terminated in accordance with this Section 7:
(A) In the event of termination of Executive’s employment for any reason, Executive shall be paid within the period of time required under applicable law for persons separating from employment all accrued but unpaid compensation owed to Executive by Employer as of the date of termination (including accrued Salary and vacation), and in any event within 30 days following the termination of Executive’s employment, as well as such other earned payments or vested benefits to which Executive is entitled pursuant to any of Employer’s employee benefit plans pursuant to the terms thereof (the “Accrued Obligations”);
(B) Upon thirty days written notice by Executive at any time without Good Reason, in which event, Employer shall have no further obligations under this Agreement other than the Accrued Obligations. Employer may accelerate the notice date, in its sole discretion, without converting the resignation into a termination by the Employer;
(C) Upon written notice by Employer without Good Cause, or by Executive for Good Reason, in which event, in addition to the Accrued Obligations, and provided that Executive’s termination constitutes a “Separation from Service” as defined under Treasury Regulation Section 1.409A-1(h), and provided further that Executive remains in compliance with the terms of this Agreement (including the conditions described in Section 7(G) below), the Employer shall provide Executive with the following benefits (the “Severance Benefits”):
(i) The Employer shall pay Executive, as severance, the equivalent of six (6) months (the “Severance Period”) of Executive’s Salary in effect as of the date of Executive’s employment termination, subject to standard payroll deductions and withholdings (the “Severance”). The Severance will be paid as a continuation on the Employer’s regular payroll, beginning no later than the first regularly-scheduled payroll date following the sixtieth (60th) day after Executive’s Separation from Service, provided the Release has become effective;
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 5 |
(ii) Executive will receive an Annual Bonus equal to Executive’s target bonus, pro-rated based on the number of full months actively worked in the year of Executive’s employment termination (the “Bonus Severance”). The Bonus Severance will be paid to Executive at the same time bonuses are paid to similarly-situated employees of the Employer, subject to all applicable deductions and withholdings; and
(iii) If applicable, the 2023 Bonus.
(D) Upon written notice by Employer for Good Cause, in which event, Employer shall have no further obligations under this Agreement other than the Accrued Obligations.
(E) Upon the death of Executive, upon which there shall be no liability or further obligation of Employer under this Agreement except for the payment of the Accrued Obligations and if applicable, the 2023 Bonus.
(F) Upon the Disability of Executive, upon which there shall be no liability or further obligation of Employer under this Agreement except for the payment of the Accrued Obligations and, provided that Executive remains in compliance with the terms of this Agreement (including the conditions described in Section H, below), Executive shall be eligible to receive the Severance and the Bonus Severance and, if applicable, the 2023 Bonus.
(G) Notwithstanding the foregoing, (i) Executive’s receipt of the Severance Benefits is conditioned upon Executive’s execution (and non-revocation in the time provided to do so) of a general release in favor of Employer in a form satisfactory to Employer (the “Release”) and (ii) Employer’s obligation to provide any Severance Benefits shall terminate if Executive materially breaches any of the terms of Sections 8, 9, 10, 11 and 12 of this Agreement. If the Release is not executed within 60 days of the date it is provided to Executive (or such other date agreed upon between the parties), or the execution is timely revoked, then Executive will not be entitled to receive any Severance Benefits.
(H) Executive will be deemed to have a “Disability” if, for physical or mental reasons, Executive is unable to perform Executive’s full-time essential job duties under this Agreement for 60 consecutive days, or 90 days in any twelve-month period, as determined in accordance with this Section 7(H). The disability of Executive will be determined by a medical doctor selected by written agreement of Executive and Employer upon the request of either party by notice to the other. If Employer and Executive cannot agree on the selection of a medical doctor, each of them will select a medical doctor and the two medical doctors will select a third medical doctor who will determine whether Executive has a Disability. The determination of the medical doctor selected under this Section 7(H) will be binding on both parties. Executive must submit to a reasonable number of examinations by the medical doctor making the determination of Disability under this Section 7(H) and Executive hereby authorizes the disclosure and release to Employer of such determination and all supporting medical records. Employer shall bear the cost of all such examinations and record collection. If Executive is not legally competent, Executive’s legal guardian or duly authorized attorney-in-fact will act in Executive’s stead, under this Section 7(H)(iii) for the purposes of medical doctor selection, submitting Executive to the examinations, and providing the authorization for the disclosures, required under this Section 7(H). Executive stipulates and agrees that (1)-Executive is a key employee of Employer, (2) Executive’s inability to perform Executive’s essential job duties under this Agreement on a full-time basis for 60 consecutive days, or 90 days during any twelve-month period, will cause substantial and grievous economic injury to Employer’s operations, and (3) Executive’s employment with Employer will therefore terminate under Section 7(F).
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 6 |
8. CONFIDENTIAL INFORMATION: The following information and materials, whether written or oral, whether having existed, now existing or developed or created during Executive’s employment with Employer under this Agreement are considered confidential and/or proprietary (collectively, “Confidential and/or Proprietary Information”), in each case as the Employer:
(A) All information and materials of Employer and the Business relating to software and hardware products, and software and hardware in the various stages of research and development, including, but not limited to, source codes, object codes, design specifications, design notes, flow charts, coding sheets, product plans, know-how, algorithms, and the processes and systems used in the Business;
(B) The computer systems and information technology of Employer and the Business, as such systems and technology may exist from time to time, including without limitation, computer and related equipment, computer programs (whether identified as software, firmware or other and on whatever media), databases, documentation, manuals, hardware and software support systems and methods, techniques or algorithms of organizing or applying the same;
(C) Internal business procedures and policies, including, but not limited to, licensing techniques, vendor names, other vendor information, sales, marketing, operation, product development and other business plans and forecasts, financial information, and other information used in the Business;
(D) Any and all non-public Customer information, including, but not limited to, lists of actual or prospective Customers and Customer sites and the nature of Customer relationships of Employer (including types, prices and amounts of products acquired or anticipated to be acquired from Employer), including specific individuals associated with Customers, compiled in a format such as an account record card, Customer buying patterns, group run concepts and combination ordering patterns of the Customers of Employer, information related to particular applications of the Customers of Employer, information related to value added services provided to Customers of Employer, information related to targeted and/or anticipated product or service needs of Customers of Employer, and the policies and/or business practices of the Customers of Employer, pricing structures, Customer contracts, Customer data, Customer negotiations, Customer relations materials, Customer service materials, and past Customers;
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 7 |
(E) Non-public lists and sales volume and other information, including the prices at which Employer sold or sells products or services to particular Customers or Customer groups;
(F) All developments, improvements, inventions and processes that have been, are or may be produced in the course of operations of the Business;
(G) Confidential and private matters of the Customers of, and Prospective Customers submitted for handling and processing to, Employer;
(H) Any information licensed to Employer on a confidential basis from third parties for internal use and/or for sublicense to end users by Employer;
(I) All legal rights including, but not limited to, trade secrets, pending patents, pending litigation and/or arbitrations relating to the Business or involving Employer, pending trademarks, and like properties maintained in confidence;
(J) Any non-public employee information of Employer, including, but not limited to, lists of employees, and any non-public information regarding such employees or their employment;
(K) Any information relating to the Business obtained while working for Employer which gives or could give Employer a competitive edge; and
(L) Any other information relating to the Business, not generally known, concerning the Business, and its operations, products, personnel, customers, or business, acquired, disclosed or made known to Executive while in the employ of Employer which, if used or disclosed other than in the performance of Executive’s job duties for Employer, could with reasonable possibility, adversely affect the Business of Employer or give a competitor a competitive edge.
(M) Notwithstanding the foregoing, this Section 8 and Section 10 shall not extend to any Confidential and/or Proprietary Information that (i) was generally known or generally available to the public before its disclosure to Executive, or (ii) becomes generally known or generally available to the public subsequent to disclosure to Executive through no wrongful act of Executive.
9. EXECUTIVE’S WARRANTY: The undertaking of this Agreement will not constitute a breach of any agreement to which Executive is a party or any obligation to which Executive is bound. Executive is not bound by any non-disclosure or non-compete agreement that would in any way affect Executive’s performance of this Agreement. Executive has no obligations to others that are inconsistent with the terms of this Agreement or with Executive’s faithful performance of duties as an employee of Employer under this Agreement. Executive understands and agrees that Employer does not wish to receive, and Executive shall not provide to Employer, any confidential, proprietary or trade secret information that is owned by a third party, including any former employer of Executive, that Executive is contractually or otherwise legally prohibited from providing to Employer. For the avoidance of confusion, Employer expects Executive to abide by all preexisting contractual commitments, to disclose all such commitments to Employer, and it will be a condition of Executive’s continued employed that Executive does not involve Employer in any breach of his contractual commitments.
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 8 |
10. RESTRICTIVE COVENANTS: Executive acknowledges that Executive will obtain and develop further specialized knowledge of Confidential and/or Proprietary Information and goodwill through Executive’s involvement in the business of Employer, including through Executive’s employment under this Agreement.
As a necessary condition of Employer’s employment of Executive, and in consideration for the mutual promises and undertakings in this Agreement and the specialized knowledge of and access to Confidential and/or Proprietary Information that Employer will continue to develop and/or that Executive will newly receive from Employer during the Term of this Agreement, and to ensure the protection of Confidential and/or Proprietary Information (wherever originating) during Executive’s employment and thereafter, Employer and Executive agree as follows:
(A) Upon termination of Executive’s employment, Executive shall return all property of Employer that are in Executive’s possession, custody, or control, including, but not limited to, any Confidential and/or Proprietary Information and copies thereof.
(B) During the Term, Executive shall not directly or indirectly, for Executive or others, perform, manage, supervise, or otherwise engage or participate in any business that competes with the Business of Employer.
(C) During the Term and continuing for (l) year after Executive’s employment with Employer has ended, to the extent permitted by law, Executive shall not directly or indirectly, for Executive or others, solicit or communicate (regardless of who initiates the communication) with any employee or independent contractor of Employer to induce, encourage, request, or advise any such employee: (a) to terminate Executive’s or her employment or engagement with Employer for any reason whatsoever; or (b) to accept employment or engagement with another Entity that offers or is planning to develop products or services that are the same or substantially similar to those offered or under development by Employer with respect to the Business.
(D) During the Term and, only if Executive is employed outside of California at the time Executive’s employment terminates (or to the extent California law otherwise governs and prohibits enforcement of the covenants), to the extent permitted by law, and continuing for (1) year after Executive’s employment with Employer has ended, Executive shall comply with all of the following restrictions:
(i) Executive shall not directly or indirectly, for Executive or others, perform, manage, supervise, or otherwise engage or participate in any business that competes with the Business of Employer anywhere in the Restricted Territory;
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 9 |
(ii) Except in connection with Executive’s employment for Employer, Executive shall not directly or indirectly, anywhere in the Restricted Territory, for Executive or others, solicit or communicate (regardless of who initiates the communication) with any Customer or Prospective Customer of the Business to induce, encourage, request, or advise any such Entity: (a) to not do business with the Business of Employer; (b) to curtail, cancel, or withdraw its business from the Business of Employer; (c) to place business elsewhere or divert business away from the Business of Employer; or (d) to purchase or contract for any product or service that is the same or substantially similar to those offered or under development by the Business of Employer. Nor shall Executive directly or indirectly otherwise aid any Entity to obtain or procure the sale of any product or service that is the same or substantially similar to any product or service offered or under development by Employer; and
(iii) Executive shall not, directly or indirectly, anywhere in the Restricted Territory, for Executive or others, solicit or communicate (regardless of who initiates the communication) with any vendor, supplier, reseller, or service provider for the Business of Employer during Executive’s employment with Employer to induce, encourage, request, or advise any such Entity: (a) to not do business with the Business of Employer; (b) to curtail or cease its business relationship with the Business of Employer; or (c) to cancel, rescind, terminate, decline to extend, or modify any agreement with the Business of Employer.
(E) Executive stipulates and agrees that, based upon the nature of Employer’s business operations and substantial relationships with Customers and Prospective Customers, the nature of Executive’s job duties with Employer, the goodwill associated with Employer’s business, the specialized knowledge of Confidential and/or Proprietary Information that Executive has received and will further receive during the Term of this Agreement and any extensions, and to ensure the protection of that Confidential and/or Proprietary Information, the scope of activity restrained and the duration of the restrictions set forth in Section 10(D) above are reasonable and no greater than necessary to protect the legitimate business interests of Employer and its Affiliates. Executive further stipulates and agrees that in the event Executive does engage in any of the activities restrained under Section 10(D) above, Executive will inevitably use or disclose Confidential and/or Proprietary Information to the detriment of the business interests of Employer.
(F) Executive stipulates and agrees that the Business of Employer extends, or is anticipated to extend worldwide (the “Restricted Territory”). Executive specifically acknowledges that the anticipated expansion of the business of Employer to the full scope of the Restricted Territory with respect to both existing and Prospective Customers, contributed significantly to the Employer’s value. Executive further stipulates and agrees that the geographic limitations of the Restricted Territory are reasonable and no greater than necessary to protect the legitimate business interests of Employer and its Affiliates, and that any violation by Executive of any restrictions set forth in Section 10 would cause irreparable injury to Employer and/or its Affiliates.
(E) Executive and Employer acknowledge that this Section 10 was negotiated in good faith by the Parties. Executive acknowledges that Executive had the opportunity to consider the terms of this Agreement and to review the terms of the restrictions contained in this Section with an attorney before signing, if Executive chose to do so.
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 10 |
11. COVENANT NOT TO DISCLOSE:
(A) Executive warrants, covenants and agrees that, except in the performance of Executive’s duties under this Agreement, Executive has not and will not at any time or in any manner, make or cause to be made any copies, pictures, duplicates, facsimiles or other reproductions or recordings, or any abstracts or summaries of any reports, studies, memoranda, correspondence, manuals, Customer lists, employee lists, records, plans, data programs, software, or other written, printed or otherwise recorded material of any kind whatsoever, belonging to or in the possession of Employer, which may be produced or created by or come into the possession of Executive in the course of Executive’s employment, or which is related in any manner to the past, present or prospective business of Employer. Executive shall have no right, title or interest in any such material. Executive agrees that, except in the performance of Executive’s duties under this Agreement, Executive will not, without the prior written consent of Employer remove any such material without prior written consent or other proper authorization from any premises of Employer or any applicable Affiliate thereof, and that Executive will surrender all such material to Employer immediately upon the termination of Executive’s employment or at any time prior to termination upon request of Employer, respectively.
(B) Executive warrants, covenants and agrees that, except in the performance of Executive’s duties under this Agreement, or with the prior written consent of Employer, Executive will not at any time, whether during or after Executive’s employment with Employer, use, publish, or otherwise disclose for Executive’s own benefit or purpose or for the benefit or purpose of any other Entity, either directly or indirectly, any Confidential and/or Proprietary Information. Executive hereby acknowledges that the Confidential and/or Proprietary Information and materials are commercially and competitively valuable to Employer, and are vital to the success of Employer’s business at all locations at which Employer does business; that by this Agreement, Employer is taking reasonable steps to protect its legitimate interest in its confidential information; and that the restrictions set forth in this Agreement are reasonably necessary in order to protect Employer’s legitimate interest in its Confidential and/or Proprietary Information.
(C) Executive acknowledges and agrees that this covenant shall have full force and effect through the Term of this Agreement and shall remain in effect indefinitely after the Term of this Agreement.
(D) Notice of Immunity Under the Defend Trade Secrets Act of 2016. Notwithstanding any other provision of this Agreement:
(i) Executive will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that:
(a) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or
(b) is made in a complaint or other document filed under seal in a lawsuit or other proceeding.
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 11 |
(ii) If Executive files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Executive may disclose Employer’s trade secrets to Executive’s attorney and use the trade secret information in the court proceeding if Executive: (a) files any document containing trade secrets under seal; and (b) does not disclose trade secrets, except pursuant to court order.
12. INTELLECTUAL PROPERTY: Executive hereby assigns and agrees to assign to Employer, without further compensation, all right, title and interest in and to Intellectual Property (as defined below) relating to the Business of Employer, that Executive in anyway causes to be used in the Business of Employer, that Executive develops in the course of Executive’s performance of Executive’s responsibilities for Employer, or that is developed using any property or other resources of Employer, that Executive individually or jointly develops, conceives, invents, or creates during the Term of this Agreement.
(A) Executive acknowledges that works of authorship developed, conceived, or created during the Term of this Agreement and any subsequent employment with Employer are “works for hire” as that term is defined under U.S. copyright law, and include moral rights as defined under U.S. and foreign copyright law.
(B) During the Term of this Agreement and thereafter upon Employer’s reasonable request, Executive shall, without additional compensation, (i) execute and deliver any and all applications, assignments, documents, and other instruments that Employer shall deem necessary to protect the right, title and interest of Employer and its designee in or to Intellectual Property; (ii) reasonably cooperate and assist in providing information for making and completing regulatory and other filings; (iii) reasonably cooperation and assist in providing information for or participating in any action, threatened action, or considered action relating to Intellectual Property; and (iv) take any and all other reasonable actions as Employer may otherwise reasonably require with respect to Intellectual Property. As used in this Agreement, “Intellectual Property” means anything that is, has been, or is capable of being patented, protected as a trade secret, trademark, service mark, or trade name, protected by copyright law, or protected by or under any other U.S. or foreign laws or statutes relating to intellectual property rights. Without limiting the foregoing, Intellectual Property may take the form of inventions, discoveries, ideas, improvements, schematics, diagrams, know-how, information, data, business plans, plans, designs, methods, specifications, processes, hardware or software.
(C) Executive further agrees that, as soon as practicable, Executive shall make full disclosure to Employer of all inventions or discoveries subject to this Agreement, and shall deliver or cause to be delivered to Employer all papers, including patent and copyright applications, relating to any rights assigned or to be assigned under this Agreement.
(D) THIS IS TO NOTIFY Executive in accordance with Cal. Lab. Code § 2870, this intellectual property assignment between Executive and Employer does not apply to an invention that Executive developed entirely on Executive’s own time without using Employer’s equipment, supplies, facilities, or trade secret information, except for those inventions that either:
(l) Relate at the time of conception or use to Employer’s business, or actual or demonstrably anticipated research or development; or
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 12 |
(2) Result from any work Executive performed for Employer.
To the extent a provision in this Agreement purports to require Executive to assign an invention otherwise excluded from the preceding paragraph, the provision is against the public policy of the state of California and is void and unenforceable.
13. EXIT INTERVIEW: Upon separation from employment with Employer, Executive agrees to participate in an exit interview with a designee of Employer, wherein Executive will review Executive’s obligations under this Agreement. At the exit interview, Executive will ask any questions that Executive may have concerning whether information that Executive was exposed to is considered confidential under this Agreement. Executive will also provide the name of Executive’s new employer and the position in which Executive will be employed, when known, for one year following Executive’s separation from employment with Employer. Executive understands that Employer may request assurances from Executive that if Executive accepts subsequent employment with a competing company, Executive will be working in a position which would avoid the risk of disclosure of Employer’s Confidential and/or Proprietary Information. Executive further agrees to return to Employer all property in Executive’s possession belonging to Employer, including all written, electronic, or printed materials and copies thereof, keys, cards, equipment, cars, and any other item that is the property of Employer, within five (5) business days following Executive’s separation from employment, or Employer’s provision of a prepaid envelope or shipping container, whichever is later. To the extent that Executive has any Employer property, including, but not limited to, any Confidential and/or Proprietary Information stored on any computer, Executive agrees to immediately return such information to Employer, along with any copies of such information. Executive further agrees that after Executive returns any computerized information to Employer, Executive will make reasonable efforts to purge all such information from the source computer or make the computer available for inspection and data removal by Employer.
14. DISPUTE RESOLUTION. THIS AGREEMENT IS SUBJECT TO ARBITRATION. To ensure the rapid and economical resolution of disputes that may arise in connection with Executive’s employment with the Employer, Executive and the Employer agree that in the event of any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation of this agreement, Executive’s employment with the Employer, or the termination of Executive’s employment, shall be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. § 1-16, to the fullest extent permitted by law, by final, binding and confidential arbitration conducted by the American Arbitration Association (“AAA”) or its successor, under AAA’ then applicable rules and procedures for employment disputes before a single arbitrator (available upon request and also currently available at xxxxx://xxx.xxx.xxx/xxxxxxxxxx/). The arbitration will be held in Manhattan, New York or, if required by law, the county and state where Executive last performed services for the Employer, or at another location agreed upon by Executive and the Employer. Executive acknowledges that by agreeing to this arbitration procedure, both Executive and the Employer waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding. In addition, all claims, disputes, or causes of action under this section, whether by Executive or the Employer, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class or representative proceeding, nor joined or consolidated with the claims of any other person or entity. The arbitrator may not consolidate the claims of more than one person or entity, and may not preside over any form of representative or class proceeding. To the extent that the preceding sentences regarding class claims or proceedings are found to violate applicable law or are otherwise found unenforceable, any claim(s) alleged or brought on behalf of a class shall proceed in a court of law rather than by arbitration. This paragraph shall not apply to any action or claim that cannot be subject to mandatory arbitration as a matter of law, including, without limitation, claims brought pursuant to the California Private Attorneys General Act of 2004, as amended, the California Fair Employment and Housing Act, as amended, and the California Labor Code, as amended, to the extent such claims are not permitted by applicable law(s) to be submitted to mandatory arbitration and the applicable law(s) are not preempted by the Federal Arbitration Act or otherwise invalid (collectively, the “Excluded Claims”). In the event Executive intends to bring multiple claims, including one of the Excluded Claims listed above, the Excluded Claims may be filed with a court, while any other claims will remain subject to mandatory arbitration. Executive will have the right to be represented by legal counsel at any arbitration proceeding. Questions of whether a claim is subject to arbitration under this agreement shall be decided by the arbitrator. Likewise, procedural questions which grow out of the dispute and bear on the final disposition are also matters for the arbitrator. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written statement signed by the arbitrator regarding the disposition of each claim and the relief, if any, awarded as to each claim, the reasons for the award, and the arbitrator’s essential findings and conclusions on which the award is based. The arbitrator shall be authorized to award all relief that Executive or the Employer would be entitled to seek in a court of law. The Employer shall pay all AAA arbitration fees in excess of the administrative fees that Executive would be required to pay if the dispute were decided in a court of law. Nothing in this letter agreement is intended to prevent either Executive or the Employer from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration, including, without limitation, in the event of a dispute arising pursuant to the provisions of Sections 8, 9, 10, 11 or 12 above. Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction.
15. EQUITABLE RELIEF: Executive acknowledges and agrees that in the event of a breach or threatened breach by Executive of Section 10 this Agreement, that Employer’s remedies at law would be inadequate, and that Employer shall be entitled to an injunction (without any bond or other security being required, but if such is required, bond shall be limited to one thousand dollars ($1,000.00)) without the necessity of proof of actual damage. In addition, if Executive fails to comply with any timed restriction set forth in Section 10 of this Agreement, Executive agrees that the time period for that restriction will be extended by one day for each day Executive is found to have violated the restriction, up to the full duration of the bargained-for restriction. Nothing in this Section 15 shall be construed to preclude Employer from pursuing any action or further remedy, at law or in equity, for any breach or threatened breach, including, but not limited to, the recovery of damages and attorney’s fees if applicable.
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 13 |
16. JUDICIAL MODIFICATION: If the scope of any restriction contained in this Agreement (including, but not limited to Sections 8, 9, 10, 11 or 12) is too broad to permit enforcement of such restriction to its full extent, then such restriction shall be enforced to the maximum extent permitted by law, and the parties consent and agree that such scope may be accordingly judicially modified in any proceeding brought to enforce such restriction. Moreover, Executive acknowledges it is Executive’s intention and agreement that such restrictions be enforced to the fullest extent permitted and consents to their reformation to that extent as applied to Executive.
17. NOTICES: Any notice required or permitted to be given under this Agreement shall be sufficient if in writing, and if sent prepaid by certified mail, return receipt requested, by nationally recognized overnight courier (i.e. Federal Express, UPS), or personally delivered with receipt to the parties at the following address (or at any other address as any party hereto shall have specified by notice in writing to the other party hereto):
If to Executive, to:
Xxxxxxx Xxxxxxxx
0000 Xxxxx Xxxxxx # 0000
Santa Monica, CA 90401
Or the most recent address on the payroll records of the Employer.
If to Employer, to:
Brand Engagement Network, Inc.
Xxxxx@xxxxxx.xx
with a copy to:
Brand Engagement Network, Inc.
000 X. Xxxx Xxxx Xxxxxx- PO Box 1045
Jackson, WY 83001
Attn: Legal Department
Notices will be deemed effective upon receipt or refusal to receive, except that notices sent by email shall be deemed immediately effective upon transmission provided that they are also accompanied by a mailed copy sent to the appropriate address sent not later than the next business day. Address changes shall be affected through the notice process set forth in this Section.
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 14 |
18. WAIVER OF BREACH: No waiver by either party (i) of a breach of any provision of this Agreement by the other party or (ii) of compliance with any condition or provision of this Agreement to be performed by the other party, will operate or be construed as a waiver of any subsequent breach by the other party nor of a waiver of any similar or dissimilar provisions and conditions at the same or any prior or subsequent time. Failure of any party to act on any breach will not deprive the party of the right to take action at any time while such breach continues.
19. ASSIGNMENT: The provisions and terms of this Agreement, and particularly but without limitation, the terms and provisions of Sections 8, 9, 10, 11 and 12 above, shall be binding on Executive and inure to the benefit of Executive, Executive’s heirs-at-law, legatees, distribute, executors, administrators, and legal representatives, and shall inure to the benefit of Employer, its Affiliates, and their respective successors and assigns. Sections 8 through 24 of this Agreement shall survive the termination of Executive’s employment and this Agreement. Neither party may assign its rights and obligations under this Agreement without the consent of the other party, except that Employer may assign (including any assignment effected through a merger) its rights and obligations under this Agreement to any affiliate in the event of a corporate re-organization or to a purchaser of all or substantially all of the assets of Employer without the consent of Executive, in which case the terms and conditions of this Agreement shall be binding on, and inure to the benefit of, such affiliate or purchaser.
20. ENTIRE AGREEMENT: This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes all prior and contemporaneous agreements, if any, between the parties relating to the subject matter hereof. It may not be changed or modified in whole or in part except in a writing executed by Executive and an authorized officer of Employer.
21. PARTIAL INVALIDITY: If any provision of this Agreement or the application of such provision is held unenforceable for any reason by a court or arbitrator of competent jurisdiction and such unenforceability is not cured pursuant to Section 16, then such provision shall be modified to the extent required to render it enforceable (or, if held impossible to modify in a manner permitting enforcement, then severed from this Agreement) and the remainder of this Agreement shall not be affected.
22. GOVERNING LAW AND FORUM: This Agreement shall be governed by the laws of the State of New York without regard to the conflicts of laws provisions thereof. The exclusive forum and venue for any court action permitted by Section 14 of this Agreement will be a court of competent jurisdiction located in Manhattan, New York. For any such court action, both Executive and Employer stipulate and consents to the exercise of personal jurisdiction over them by all courts located in Manhattan, New York, and hereby waive their right to object to any such exercise of jurisdiction over Executive in New York. Executive acknowledges that Executive is in fact individually represented by legal counsel in negotiating the terms of this Agreement to designate both the venue or forum in which a controversy arising from the Agreement may be adjudicated and the choice of law to be applied.
23. COUNTERPARTS: This Agreement may be executed in several counterparts, each of which shall be deemed an original for all purposes.
24. HEADINGS, GENDER, NUMBER: Any headings contained in this Agreement are for convenience in locating particular provisions only and are not to be considered in the interpretation and enforcement of this Agreement. Wherever used or appearing in this Agreement, pronouns of the masculine gender shall include the persons of the female, and the singular shall include the plural, wherever applicable.
[Remainder of page intentionally left blank, signature page follows]
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
| PAGE | 15 |
IN WITNESS HEREOF, the parties have executed this Agreement as of the date first above written.
| EMPLOYER: | ||
| Brand Engagement Network Inc. | ||
| Signature: | /s/ Xxxxx X. Xxxxxxxxx, Xx. | |
| Printed Name: | Xxxxx X. Xxxxxxxxx, Xx. | |
| Title: | Director and Corporate Counsel | |
| EXECUTIVE: | |
| /s/ Xxxx Xxxxxxxx | |
| Xxxx Xxxxxxxx |
SIGNATURE PAGE TO
EMPLOYMENT AGREEMENT – XXXX XXXXXXXX
