EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this “Agreement” is made and entered into effective as of the 1st day of July, 2014 (the ”Effective Date”), by and between BRAC Global Automotive, Inc., a Nevada corporation (the “Company”) and Xxxxx Xxx Han (a/k/a Xxxxx Xxx) (the “Executive”).
1.2.1. During the Term, the Executive shall have the title of Senior Vice President and General Counsel of the Company, subject to the terms of this Agreement. The Executive shall faithfully and diligently discharge her duties hereunder and use her best efforts to implement the policies established by the Company’s Board of Directors (“Board”) and its Chief Executive Officer from time to time. During the Term, the Executive shall report directly to the Chief Executive Officer of the Company. Executive shall initially serve as Senior Vice President of the Company, and upon the Company qualifying as a “qualifying institution” pursuant to Rule 9.46 of the California Rules of the Court and the Executive registering as in-house-counsel for the Company pursuant to multi-jurisdictional practice program of the State Bar of California, the Executive shall serve as Senior Vice President and General Counsel of the Company.
1.2.2. Executive will be appointed to serve as a member of the Board and as the Senior Vice President and Corporate Secretary of the Company as of the Effective Date and shall continue to serve on the Board and as an officer of the Company during the entire Term. At each annual meeting of the Company’s stockholders during the Employment Term, the Company will nominate Executive to serve as a member of the Board and shall use its best efforts to obtain any required stockholder approval. Upon the termination of Executive’s employment for any reason, Executive will be deemed to have resigned from the Board (and any boards of subsidiaries) and as its officer voluntarily, without any further required action by the Executive, as of the end of the Executive’s employment and Executive, at the Board’s request, will execute any documents necessary to reflect her resignation.
1.2.3. The Executive shall devote substantially all of her business time, attention, knowledge and skills faithfully, diligently and to the best of her ability, in furtherance of the business and activities of the Company; provided, however, that nothing in this Agreement shall preclude the Executive from devoting reasonable periods of time required for: (i) service as an officer and member of the Board of Directors of her former employer prior to July 1, 2014, (SenTen Inc.), a Delaware corporation, in order to facilitate its on-going operation; (ii) service in any capacity with any civic, educational, or charitable organization, provided such services do not interfere with Executive’s obligations to Company; and (iii) managing her personal passive investments and affairs; provided that such activities do not materially, individually or in the aggregate, interfere with the due performance of her duties and responsibilities under this Agreement or create a conflict of interest with the business of the Company, as determined in good faith by the Board.
Annual Period
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Base Salary
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Year 1
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$300,000 (Three Hundred Thousand Dollars)
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Year 2
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$324,000 (Three Hundred Twenty-Four Thousand Dollars)
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Year 3
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$350,000 (Three Hundred Fifty Thousand Dollars)
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Year 4
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$378,000 (Three Hundred Seventy-Eight Thousand Dollars)
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Year 5
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$408,000 (Four Hundred Eight Thousand Dollars)
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· Business performance based on vehicle units sold, revenue, EBITDA, etc.;
· Securing distribution agreements with vehicle manufacturer, vehicle launches;
· Stock performance; and,
· New business development.
2.5. Vacation; paid holidays. Executive will be entitled to receive paid annual vacation in accordance with Company policy for other senior executive officers. In no event will Executive receive less than three (3) weeks of paid vacation time per calendar year. Executive will be able to carry forward any unused vacation time to the next calendar year; provided that in no event will Executive be able to carry or use more than five (5) weeks of paid vacation time per calendar year. Any un-used vacation time which is not carried forward at the end of any particular year shall not be cashed out or otherwise paid to Executive and shall expire. In addition to the foregoing, Executive shall be entitled to honor eleven (11) paid national holidays per calendar year. Personal time off, when taken consistent with the Company’s policies, shall be deemed paid within the Base Salary, and shall not be deducted therefrom.
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2.8. 401(k) Plan. Executive will be eligible to participate in the Company’s 401(k) plan, and the Company will match all contributions to such plan made by Executive up to ten percent (10%) of such contributions. If no such plan is in place at the Effective Date, the Company will adopt a 401(k) plan for executive officers of the Company as soon as practicable.
2.10. D&O Insurance. The Company assures Executive that as soon as practicable and at all times thereafter during Executive’s employment, a Directors and Officer’s insurance policy shall be maintained by the Company, with limits to be set under guidance from the Board of Directors of the Company.
3. PLACE OF PERFORMANCE. In connection with her employment by the Company, except as otherwise agreed in writing with the Executive, the Executive shall be based out of the Company’s headquarters, which shall be in Southern Los Angeles County or Northern Orange County, California. The Company shall provide executive offices and reasonably necessary support staff and equipment, as employees or as consultants, to facilitate Executive’s performance of her duties.
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(i) the willful and continued failure by the Executive to attempt in good faith to substantially perform her obligations under this Agreement (other than any such failure resulting from the Executive’s incapacity due to a Disability); provided, however, that the Company shall have provided the Executive with written Notice of Termination that such actions are occurring and the Executive has been afforded at least thirty (30) days to cure same as provided in the Notice;
(ii) the Executive’s conviction of or plea of guilty or nolo contendere to, a felony or any other crime involving dishonesty or moral turpitude;
(iii) the Executive’s willfully engaging in misconduct in the performance of her duties for the Company (including theft, fraud, embezzlement, and material and willful securities law violations or a violation of the Company’s Code of Conduct or other written policies) that is injurious to the Company, monetarily or otherwise; or
(iv) the Executive’s willfully engaging in misconduct other than in the performance of her duties for the Company (including theft, fraud, embezzlement, and material and willful securities law violations) that is materially injurious to the Company, or, in the good faith determination of the Board, is potentially materially injurious to the Company, monetarily or otherwise; or
(v) the Executive’s inability to perform her obligations under this Agreement due to or as a result of any Court order or order or decision of any regulatory body having authority over the Company.
(i) In the event that the Company makes a substantial change that results in a material diminution in Executive’s duties, compensation, authority, access to information, reporting relationships, or participation in the Company’s decision making, without performance or market justification, or without Executive's prior written consent, provided that Executive must first give written notice to the Company of the Good Reasons by Notice of Termination and the Company has been afforded at least thirty (30) days to cure same as provided in the Notice ; or
(ii) there is a relocation of Executive's principal office or a transfer of Executive to an office outside of a fifty-mile radius of Irvine, California without Executive’s prior written consent; or.
(iii) the Company fails (A) to have Adequate Working Capital at all times, or (B) to cause the Company to observe the corporate governance “best practices”, in each case as set forth in that certain agreement between the Company and Executive of even date herewith.
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4.4.7 Definition of “Change in Control”.
(A)
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"Change in Control" means the occurrence of any one or more of the following:
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(i) Any Person becomes an Acquiring Person, except as the result of (A) any acquisition of Voting Securities of the Company by the Company or (B) any acquisition of Voting Securities of the Company directly from the Company (as authorized by the Board).
(ii) Individuals who constitute the Incumbent Board cease for any reason to constitute at least a majority of the Board; and for this purpose, any individual who becomes a member of the Board after the date of this Agreement whose election, or nomination for election by holders of the Company’s Voting Securities, was approved by the vote of at least a majority of the individuals then constituting the Incumbent Board shall be considered a member of the Incumbent Board (except that any such individual whose initial election as director occurs as the result of an actual or threatened election contest, within the meaning of Rule 14a-11 under the Exchange Act, or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered).
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(iii) The consummation of a reorganization, merger, share exchange, consolidation, or sale or disposition of all or substantially all of the assets of the Company unless, in any case, the Persons who or which Beneficially Own the Voting Securities of the Company immediately before that transaction Beneficially Own, directly or indirectly, immediately after the transaction, at least 75% of the Voting Securities of the Company or any other corporation or other entity resulting from or surviving the transaction (including a corporation or other entity which, as the result of the transaction, owns all or substantially all of Voting Securities of the Company or all or substantially all of the Company’s assets, either directly or indirectly through one or more subsidiaries) in substantially the same proportion as their respective ownership of the Voting Securities of the Company immediately before that transaction.
(iv) The Company’s shareholders approve a complete liquidation or dissolution of the Company.
(B)
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Certain Definitions Associated with Change in Control:
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(i) “Acquiring Person" means any Person (other than an Excluded Person) who or which, alone or together with all Affiliates and Associates of that Person, is the Beneficial Owner of 51% or more of the Voting Securities of the Company then outstanding.
(ii) “Beneficial Owner" means beneficial owner as defined in Rule 13d-3 under the Exchange Act. ("Beneficially Owns" has the correlative meaning.) Any calculation of the number of Voting Securities outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding Voting Securities of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange Act.
(iii) "Excluded Person" means:
a. the Executive or any group (within the meaning of Section 13(d)(3) of the Exchange Act) of which the Executive is a member;
b. any Person that controls (as defined in Rule 12b-2 under the Exchange Act) the Company as of the date of the Agreement or any group of which any such Person is a member;
c. any employee-benefit plan, or related trust, sponsored or maintained by the Company or any of its Subsidiaries, or any trustee or other fiduciary thereof; or
d. any corporation or other entity owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the Voting Securities of the Company.
(iv) "Voting Securities" means securities or other interests having by their terms ordinary voting power to elect members of the board of directors of a corporation or individuals serving similar functions for a noncorporate entity
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The Company and the Executive acknowledge that the services to be performed by the Executive under this Agreement are unique and extraordinary and, as a result of such employment, the Executive shall be in possession of Confidential Information relating to the business practices of the Company and its subsidiaries and affiliates (collectively, the “Company Group”). The term “Confidential Information” shall mean any and all information (oral and written) relating to the Company Group, or any of their respective activities, or of the clients, customers, acquisition targets, investment models or business practices of the Company Group, other than such information which (i) is generally available to the public or within the relevant trade or industry, other than as the result of breach of the provisions of this Section 5, or (ii) the Executive is required to disclose under any applicable laws, regulations or directives of any government agency, tribunal or authority having jurisdiction in the matter or under subpoena or other process of law. The Executive shall not, during the Term nor at any time thereafter, except as may be required in the course of the performance of her duties hereunder and except with respect to any litigation or arbitration involving this Agreement, including the enforcement hereof, directly or indirectly, use, communicate, disclose or disseminate to any person, firm or corporation any Confidential Information regarding the Company Group nor of the clients, customers, acquisition targets or business practices of the Company Group acquired by the Executive during, or as a result of, her employment with the Company, without the prior written consent of the Company. Without limiting the foregoing, the Executive understands that the Executive shall be prohibited from misappropriating any trade secret of the Company Group or of the clients or customers of the Company Group acquired by the Executive during, or as a result of, her employment with the Company, at any time during or after the Term.
The Company shall defend (with counsel selected by Executive and subject to the consent of the Company, with such consent not to be unreasonably withheld), indemnify and hold harmless the Executive against any and all expenses reasonably incurred by her in connection with or arising out of (a) the defense of any action, suit or proceeding in which she is a party, or (b) any claim asserted or threatened against her, in either case by reason of or relating to her being or having been an employee, officer or director of the Company, whether or not she continues to be such an employee, officer or director at the time of incurring such expenses, except insofar as such indemnification is prohibited by law. Such expenses shall include, without limitation, the fees and disbursements of attorneys, amounts of judgments and amounts of any settlements, provided that such expenses are agreed to in advance by the Company. The foregoing indemnification obligation is independent of any similar obligation provided in the Company’s Certificate of Incorporation, Bylaws, or applicable State law, and shall apply with respect to any matters attributable to periods prior to the date of this Agreement, and to matters attributable to Executive’s employment hereunder, without regard to when asserted.
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7.6. Governing Law and Jurisdiction. This Agreement and the performance of the parties hereunder shall be governed by the internal laws (and not the law of conflicts) of the State of California. The Company and Executive unconditionally consent to submit to the exclusive jurisdiction of any court, Federal or State, within the State of California having subject matter jurisdiction over any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby (and agree not to commence any action, suit or proceeding relating thereto except in such courts), and further agree that service of any process, summons, notice or document by registered mail to the address set forth below shall be effective service of process for any action, suit or proceeding brought against the Company or the Executive, as the case may be, in any such court.
7.7.1. It is intended that the provisions of this Agreement comply with Section 409A of the Code and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. If any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Section 409A, the Company shall, upon the specific request of the Executive, use its reasonable business efforts to in good faith reform such provision to comply with Section 409A; provided, that to the maximum extent practicable, the original intent and economic benefit to the Executive and the Company of the applicable provision shall be maintained, but the Company shall have no obligation to make any changes that could create any additional economic cost or loss of benefit to the Company. The Company shall timely use its reasonable business efforts to amend any plan or program in which the Executive participates to bring it in compliance with Section 409A. Notwithstanding the foregoing, the Company shall not have any liability with regard to any failure of this Agreement to comply with Section 409A so long as it has acted in good faith with regard to compliance therewith.
7.7.2. Notwithstanding anything herein to the contrary, the payment (or commencement of a series of payments) hereunder of any nonqualified deferred compensation (within the meaning of Section 409A) upon a termination of employment shall be delayed until such time as the Executive has also undergone a “separation from service” as defined in Treas. Reg. 1.409A-1(h), at which time such nonqualified deferred compensation (calculated as of the date of the Executive’s termination of employment hereunder) shall be paid (or commence to be paid) to the Executive on the schedule set forth in Section 4.4 above as if the Executive had undergone such termination of employment (under the same circumstances) on the date of her ultimate “separation from service.” Any payment otherwise required to be made hereunder to the Executive at any date as a result of the termination of Executive’s employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the “Delay Period”) and it is expressly agreed that the payments under Subsections 4.4.1 and 4.4.2 shall be subject to the Delay Period if the Executive is deemed on the Date of Termination of employment to be a “specified employee,” within the meaning of that term under Section 409A(a)(2)(B) of the Code, using the identification methodology selected by the Company from time to time, or, if none, the default methodology. On the first business day following the expiration of the Delay Period, the Executive shall be paid, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.
With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A of the Code, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.
A Nevada corporation
By: /s/ Xxx Xxxxxxxxx
Xxx Xxxxxxxxx, President & CEO
Xxxxx Xxx Han
/s/Xxxxx Xxx Han
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