EMPLOYMENT AGREEMENT
Exhibit
10.3
THIS
EMPLOYMENT AGREEMENT (the “Employment Agreement” or “Agreement”) is entered into
as of this __ day of August 2008, between Priviam, Inc., a New Jersey
corporation (the “Company”), and Xxxxxx Xxxxx (the “Employee”).
RECITALS:
WHEREAS,
the Company desires to employ Employee in the position of Chief Financial
Officer; and
NOW,
THEREFORE, the parties to this Agreement, intending to be legally bound, agree
as follows:
1. Employment. As
of the Effective Date, the Company hereby agrees to employ Employee, and
Employee accepts such employment and agrees to perform her duties and
responsibilities under this Agreement, in accordance with the following terms
and conditions.
1.1. Duties and
Responsibilities.
(a) Beginning
on the Effective Date, and thereafter until this Employment Agreement or
Employee’s employment terminates, Employee shall be employed by the Company as
its Chief Financial Officer. In such capacity, Employee shall have
such powers and duties reasonably related to and consistent with such position
and the terms of this Agreement as may be assigned to him by the Board of Directors
of the Company. The duties and responsibilities of Employee set
forth in this Agreement shall not be substantially changed without the mutual
agreement of the parties.
(b) Employee
represents to the Company that he is not subject to or a party to any employment
agreement, non-competition covenant, understanding or restriction which would
prohibit Employee from executing this Agreement and performing fully his duties
and responsibilities hereunder.
(c) Company
hereby acknowledges and permits that during the term of this Agreement Employee
may serve as an officer and/or director of another company or companies,
provided that such company or companies are not in direct or indirect
competition with the Company's business. Such company or companies shall
include, but not be limited to, Nexicon, Inc. a Nevada
corporation. Company further acknowledges that Nexicon, Inc. is not
considered to be in direct or indirect competition with the
Company. Notwithstanding the foregoing, Employee represents to the
Company that such duties shall not interfere with the attention and skills to
the business and affairs of the Company and its subsidiaries.
1.2. Salary. For
all of the services rendered by Employee hereunder, Employee’s annual base
salary shall be Sixty Thousand Dollars ($60,000), payable in accordance with the
Company's ordinary payroll practices (but in any event no less often than
monthly). Employee hereby agrees that such base salary shall commence
upon such time as the Company raises an amount of capital, in equity or debt, of
not less than Five Hundred Thousand Dollars ($500,000) in gross proceeds or
until such earlier time as the Company has obtained appropriate funds to cover
the cost of the base salary through other means which shall include but not be
limited to licensing fees. Company hereby agrees that upon completion
of the Capital Raise that it shall pay to Employee in one lump sum any amounts
owed under the accruals. Such base salary shall not be reduced
during the term of this Agreement without the express written consent of
Employee. The Company agrees that Employee’s base salary and
performance will thereafter be reviewed at least annually by the Company to
determine if an increase in compensation is appropriate, which increase shall be
in the sole discretion of the Board of Directors of the Company.
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1.3. Common Stock
Grant. Upon execution of this Agreement, the Company shall
issue to Employee an amount of Four Million (4,000,000) shares of its common
stock par value $.0001.
1.4. Benefits. During
the term of employment Employee shall be provided such benefits and be permitted
to participate in all fringe benefit plans made available to employees of the
Company generally and to executives of the Company which, from time to time at
the Company’s discretion may be provided.
1.5
Perquisites. Employee
shall be entitled to continue to receive perquisites and fringe benefits
pertaining to the office of the Executive Chairman of the Company in accordance
with present practice and appropriate to the industry.
1.6
Bonuses . Employee
shall be eligible for annual discretionary bonuses in an amount and on such
terms as may be approved by the Board of Directors of the Company and shall be
eligible to participate in any bonus plan approved by the Board of Directors for
executives of the Company with the nature and extent of such participation to be
determined by the Board of Directors in its discretion.
2. Expenses. The
Company shall reimburse Employee on a timely basis for all ordinary and
necessary business expenses incurred in the discharge of his duties and
responsibilities under this Agreement, in line with Company policy and in
accordance with the Company’s expense approval procedures then in effect upon
presentation to the Company of an itemized account and appropriate written proof
of such expenses.
3. Term and
Termination.
3.1. Generally. This
Agreement shall commence on the Effective Date and continue for a period of
three (3) years. The term of this Agreement will automatically renew
for successive one (1) year terms, unless written notice is given by either
party that such party desires to terminate the
Agreement. Notwithstanding the foregoing, this Agreement may be
terminated at any time (i) immediately by the Company for Cause pursuant to
Section 3.2; or (ii) by the Company without Cause subject to Section
3.3.
3.2. Termination by Company for
Cause. The term Cause shall mean (i) Employee’s material
breach of this Agreement or failure or refusal to render services to the Company
in accordance with Employee’s obligations under this Agreement, provided that if
Employee’s breach, failure or refusal is capable of remedy, a written notice
within three (3) months of such breach, failure or refusal and opportunity to
cure shall be afforded Employee and, in such event, Cause shall exist if
Employee fails to cure such breach, failure or refusal within a reasonable
period of time not to exceed thirty (30) business days or if such breach,
failure or refusal is timely cured, Employee repeats such breach, failure or
refusal; (ii) negligence in the performance of Employee’s duties
which results in or could reasonably be expected to injure the Company in any
material respect, (iii) excessive absenteeism, willful misconduct or repeated
insubordination or failure to perform duties reasonably requested of him by the
Board of Directors of the Company, (iv) the commission by Employee of an act of
fraud or embezzlement against the Company or the commission by Employee of any
other bad faith action which can be reasonably anticipated to injure the
Company; (v) an act of moral turpitude by Employee; or (vi)
Employee’s having been convicted of , or pleading nolo contendere to, a felony
(other than traffic offenses which do not bring Employee or the Company into
disgrace or disrepute). For purposes of this Section 3.2, the term
“Company” shall include the Company and its subsidiaries and
affiliates. Employee acknowledges that the events described in
Sections 3.2(ii) through (vi) shall be deemed incapable of remedy.
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3.3 Severance.
(a) In
addition to any accrued but unpaid base salary and bonus earned through the date
of termination of employment, which shall be payable to Employee regardless of
the reasons for such termination, if Employee’s employment under this Agreement
is terminated by the Company for other than Cause, then Employee shall be
entitled to receive his salary until the scheduled expiration of this Agreement;
provided, however, that during such time Employee shall seek other employment
(the "Severance Benefit").
(b) Notwithstanding
anything in this Agreement to the contrary, Employee shall not be entitled to
any of the Severance Benefit described herein if (i) in the event of a Change of
Control (A) Employee is offered Comparable Employment by a Successor Company (as
defined below); or (B) Employee accepts employment with a Successor Company
(other than transition services that may be requested of Employee by the
Successor Company), regardless of whether that employment constitutes Comparable
Employment or (ii) if Employee accepts employment with another company on
comparable terms following termination for other than Cause. The term
“Successor Company” means, upon a Change of Control, a successor to the Company
as a result of the acquisition of securities, a merger, liquidation,
reorganization, consolidation or sale of assets of the Company, or otherwise a
successor to the Company as a result of the Change of
Control. Severance benefits shall be payable only upon Employee’s
termination of employment with the Company as provided herein. In no
event shall the Company have any liability for severance with respect to
Employee’s termination of employment with a Successor Company. For purposes
of this Agreement, "Comparable Employment" shall mean an offer to continue this
Agreement for the remaining term, or an offer for a new contract incorporating
substantially all of the terms of this Agreement as they would apply as of the
date of the closing of a transaction which constitutes a Change of Control,
including, at least, Employee’s then current base salary, formula bonus,
perquisites and benefits.
(c) The
Company shall have the option of paying any payment under this Section 3.3
either in accordance with the Company's then-current payroll practices or in a
lump sum. If the Company elects to pay in accordance with the
Company's then-current payroll practice, the Company will continue to pay its
share of the Employee's group health coverage for the period during which
payments are made, consistent with the terms of the applicable group health
coverage plan(s). If the Company elects to make a lump sum payment, Employee
will be responsible for the costs associated with any continuation of group
health coverage, including COBRA. In the event of Employee's death,
payment under this Section shall be made by lump sum.
3.4. Definition of Change of
Control. A “Change of Control” with respect to the Company
shall be deemed to have occurred at the time of the earliest to occur of the
following:
(a)
any “person” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (“Exchange Act”) (other than the
Company, any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or any company owned, directly or indirectly, by
the share owners of the Company in substantially the same proportions as their
ownership of stock of the Company) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly (through a
plan of reorganization or otherwise), of securities of the Company representing
50% or more of the combined voting power of the Company’s then outstanding
securities;
(b) the
share owners of the Company approve (or, if share owner approval is not
required, the consummation of) a merger or consolidation of the Company with any
other company, other than (1) a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the company or such surviving entity
outstanding immediately after such merger or consolidation, or (2) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no “person” (as defined in (a) above) acquires
more than 50% of the combined voting power of the Company’s then outstanding
securities; or
(c)
the share owners of the Company approve (or, if share owner approval is
not required, the consummation of) a plan of liquidation of the Company or a
sale or disposition by the Company of all or substantially all of the Company’s
assets; or
(d)
the Company lists its shares on any publicly listed exchange.
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4. Covenant Not to
Compete.
(a) In
consideration of the payments to Employee described in Section 4(e) below, in
the event this Agreement is terminated (for reasons other than the expiration of
its term) the Employee agrees, for a period of 18 months (the “Restricted
Period”) not to, without the prior written consent of the Board of Directors of
the Company, for whatever reason, own, manage, control, operate, invest or
acquire an interest in, become employed by, interested in, associated with, or
otherwise engaged in, or act on behalf of any trade or business that is in
“Competition” (as defined below) with the business conducted by the Company in
the United States.
(b) The
trades, businesses or activities that are or would be in “Competition” with the
business of the Company include, but are not limited to: (1) the direct or
indirect ownership of or other participation in the design, manufacture, sale or
distribution of mobile security USB devices; (2) employment or other engagement
in a management or consulting position that includes responsibility for
oversight of the design, manufacture, sale or distribution of mobile security
USB devices.
(c) Nothing
in the preceding Sections 4(a) or (b) shall be construed to preclude Employee
from being employed by a competitor of the Company in a position not involving
any direct or indirect services by Employee by, for or on behalf of any
division, unit or enterprise which is engaged in competitive activities with the
business of the Company. Without limiting the generality of the
foregoing, for the avoidance of doubt, the Parties agree that Sections 4(a), (b)
and (c) preclude Employee, during the Restricted Period, from participating in
the design, production, sale, licensing or distribution of products or product
distribution systems that are competitive with the business of the
Company.
(d) It
is specifically agreed and understood that because of the nature of the
business, the duration and geographic scope of the covenants set forth in this
Section 4 (the “Restrictive Covenants”) are reasonable. However, in
furtherance of the provisions of this Section 4 and subsections hereunder, the
Parties agree that in the event a court should decline to enforce all of the
Restrictive Covenants, or any part thereof, the other Restrictive Covenants and
the remainder of any of the Restrictive Covenants so impaired shall not thereby
be affected and shall be given full effect, without regard to the invalid
portions. If any court determines that any of the Restrictive
Covenants or any parts thereof are unenforceable because of the duration or
scope thereof, such court shall have the power to reduce the duration or scope,
as the case may be and such Restrictive Covenants shall then be enforceable in
their reduced form.
5. Nonsolicitation.
(a) During
the Restricted Period, Employee will not, directly or indirectly (i) employ or
retain, or arrange to have any other person or entity recruit, solicit, employ
or retain, any person who was employed or retained by the Company as an
employee, consultant or agent at any time during Employee’s employment with the
Company; or (ii) influence or attempt to influence any such person to terminate
or modify his/her employment arrangement or other relationship with the
Company.
(b) During
the Restricted Period, Employee will not advertise or otherwise promote any
business (or any corporation, firm or enterprise carrying on business) in
Competition with the Company.
(c) During
the Restricted Period, Employee will not, directly or indirectly, solicit,
divert or take away, or attempt to divert or take away, the business or
patronage of any of the clients, customers or accounts, or prospective clients,
customers or accounts, of the Company.
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6. Confidentiality.
(a) Employee
recognizes that as an employee of the Company, he will occupy a position of
trust with respect to “Confidential Information.” The “Confidential
Information” protected by this Section 6 and subsections hereunder means all
business information of any nature or in any form not generally known (at the
time concerned) to persons engaged in business similar to the business conducted
or contemplated by the Company (other that by the act or acts of a person not
authorized by the Company to disclose such information) and which relates to any
aspect of the present or past business of the Company, its affiliates or any of
their predecessors or any of their future plans and
strategies. Confidential information includes, but is not limited to
policies, processes, products, reports, analyses, memoranda, component lists,
developments, projects, distribution systems, work processes, known-how and
other facts relating to sales, advertising, promotions, financial matters,
pricing policies and price lists, customers, customer lists, potential
purchasers and sellers, customer’s purchases or requirements, information
systems, corporate policies and other trade secrets. The
Company acknowledges and agrees that prior to the Effective Date and during the
term of this Agreement, Employee will establish business contacts and
relationships with customers, purchasers, sellers or potential customers,
purchasers or sellers (collectively, "Employee Contacts"). Nothing in
this Section 6 shall be deemed to restrict Employee's ability to utilize
Employee's Contacts subsequent to the termination of this Agreement in a manner
that does not violate the provisions of Section 4 or Section 5 of this
Agreement.
(b) While
Employee is employed by the Company and at all times following the termination
of his employment, the Employee will keep all Confidential Information in
strictest confidence. Furthermore, without the prior written
consent of the Company, unless otherwise required in the performance of his
duties hereunder or ordered by any court of law, Employee will not divulge
Confidential Information to any third party or use it for the benefit of himself
or any third party or for any purpose other than the exclusive benefit of the
Company or its affiliates.
(c) Upon
the termination of Employee’s employment for any reason, Employee, at the
expense of the Company, will promptly return all Confidential Information to the
Company. The material to be returned includes, but is not limited to
any and all copies of the records, materials, memoranda and other data
constituting or pertaining to the Confidential Information that were prepared by
the Company, Employee or any other person.
(d) Employee
agrees that following any termination or cessation of his employment by the
Company, Employee shall not disclose or cause to be disclosed any negative,
adverse or derogatory comments or information about the Company of its
management or about any product or service provided by the Company, or about the
Company’s prospects for the future (including any such comments or information
with respect to affiliates of the Company) provided, however,
that nothing in this Section 6 and subsections thereunder shall be construed to
limit Employee’s ability to enforce his rights under this Agreement or to
contest any claim made against Employee under this
Agreement. The Company and/or any of its subsidiaries and affiliates
may seek the assistance, cooperation or testimony of Employee following any such
termination in connection with any investigation, litigation or proceeding
arising out of matters within the knowledge of Employee and related to
Employee’s position as an officer or employee of the Company, and in such
instance, Employee shall provide such assistance, cooperation or testimony, and
the Company shall pay the Employee’s reasonable costs in connection
therewith.
7. Consent to Insurance
Procedures. Employee agrees that the Company may apply for and
take out in its own name and at its own expense such “key person” life insurance
upon Employee as the Company may deem necessary or advisable to protect its
purpose, provided Employee is given sufficient notice, and to reasonably assist
and reasonably cooperate with the Company in procuring such
insurance. Employee agrees that he shall have no right, title or
interest in and to such insurance; provided, in the event the Company no longer
desires to maintain an insurance policy insuring the life of Employee, the
Company shall give Employee a minimum of 60 days written notice prior to the
lapse of such policy. Subject to Employee’s assuming the premium
charges associated with the policy, the Company shall cause such policy to be
transferred to Employee if it shall have received notification from Employee
within 15 days prior to the lapse of such policy that Employee desires to have
the policy so transferred. Company agrees to at all times have
sufficient Directors and Officers Liability Insurance.
8. Survival. Notwithstanding
the termination or expiration of this Agreement pursuant to Section 3 or
otherwise, the Company’s obligations under Sections 3, 4, 5, 6 and
7 hereof shall remain in full force and effect for the periods
therein provided.
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9. Governing
Law. This Agreement shall be governed by and interpreted under
the laws of the State of California, without giving effect to the principles of
conflicts of laws thereof.
10. Notices. All
notices and other communications required or permitted hereunder or necessary or
convenient in connection herewith shall be in writing and shall be deemed to
have been given when hand-delivered, mailed by registered or certified mail
(three days after deposited), faxed (with confirmation received) or sent by a
nationally recognized courier service, as follows (provided that notice of
change of address shall be deemed given only when received):
If to the
Company, to:
Board of
Directors
00000 Xxx
Xxxxxx Xxx., Xxx. 000
Xxxxxx,
XX 00000
If to
Employee, to:
Xxxxxx
Xxxxx
000 Xxxx
Xxx. XX, Xxx. 0000
Xxxxxxxxxxx,
XX 00000
or to
such other names and addresses as the Company or Employee, as the case may be,
shall designate by notice to each other person entitled to receive notices in
the manner specified in this Section.
11. Contents of
Agreement.
11.1.
This Agreement supersedes all prior employment agreements between the Company
and Employee excluding bonus compensation plans previously approved by the Board
of Directors of the Company or an authorized committee thereof, and sets forth
the entire understanding between the parties hereto with respect to the subject
matter hereof. This Agreement may not be changed, modified, extended
or terminated except upon written amendment executed by Employee and the
Company.
11.2. Employee
acknowledges that from time to time the Company or its affiliates may establish,
maintain and distribute employee manuals or handbooks or personnel policy
manuals, and officers or other representatives of the Company may make written
or oral statements relating to personnel policies and
procedures. Such manuals, handbooks and statements are intended only
for general guidance. No policies, procedures or statements of any
nature by or on behalf of the Company (whether written or oral, and whether or
not contained in any employee manual or handbook, as the same may exist from
time to time, or personnel policy manual), and no acts or practices of any
nature, shall be construed to modify this Agreement or to create express or
implied obligations of any nature to Employee or to impose any such obligations
on Employee in conflict with or in any manner inconsistent with the provisions
of this Agreement.
11.3.
All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Employee
hereunder are of a personal nature and shall not be assignable or delegable in
whole or in part by Employee, and the Company may not transfer or convey its
rights hereunder to any third party other than an affiliate of the Company
without the prior express written consent of Employee except as provided herein,
which consent shall not be unreasonably withheld.
11.4. The
language of this Agreement shall be construed in accordance with its fair
meaning and not for or against any party. The parties acknowledge
that each party and its counsel have reviewed and had the opportunity to
participate in the drafting of this Agreement and, accordingly, that the rule of
construction that would resolve ambiguities in favor of non-drafting parties
shall not apply to the interpretation of this Agreement or any portion of this
Agreement.
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12.
Severability. If any
provision of this Agreement or application thereof to any person or circumstance
is held invalid or unenforceable in any jurisdiction, the remainder of this
Agreement, and the application of such provision to such person or circumstances
in any jurisdiction, shall not be affected thereby, and to this end the
provisions of this Agreement shall be severable.
13. Arbitration. In the
event of any controversy, dispute or claim arising out of or related to this
Agreement or Employee’s employment by the Company, the parties shall negotiate
in good faith in an attempt to reach a mutually acceptable settlement of such
dispute. If negotiations in good faith do not result in a settlement
of any such controversy, dispute or claim, it shall be finally resolved by
expedited binding arbitration, conducted in Los Angeles, California, in
accordance with the National Rules of the American Arbitration Association
governing employment disputes. Nothing is this Section 13 shall be
deemed to limit, compromise or affect the Company’s right to seek and/or obtain
appropriate injunctive and/or other equitable relief from a court of competent
jurisdiction.
14. Remedies Cumulative; No
Waiver. No remedy conferred upon the Company or Employee by
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given hereunder or now or hereafter existing at law or in
equity. Except as specifically provided in this Agreement, no delay
or omission by the Company in exercising any right, remedy or power hereunder or
existing at law or in equity shall be construed as a waiver thereof, and any
such right, remedy or power may be exercised by the Company from time to time
and as often as may be deemed expedient or necessary by the Company in its sole
discretion.
15. Power and
Authority. The Company represents that it has the power and
authority to enter into this Agreement.
16. Withholding. All
payments under this Agreement shall be made subject to applicable tax
withholding, and the Company shall withhold from all payments under this
Agreement all federal, state and local taxes that the Company is required to
withhold pursuant to any law or governmental rule or regulation.
17. Miscellaneous. All
section headings are for convenience only. This Agreement may be
executed in several counterparts, each of which is an original.
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IN
WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed
this Employment Agreement as of the date set forth above.
By:/s/ Louis Xxxx
Xxxxxxxx
Louis
Xxxx Xxxxxxx, President & CEO
EMPLOYEE
By:/s/ Xxxxxx
Xxxxx
Xxxxxx
Xxxxx
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