EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT
10.3
This
Employment Agreement (“Agreement”), is entered into as of October 11, 2007 (the
“Effective Date”) by and between Location Based Technologies, a Nevada
Corporation (“Company”), and Xxxxxxx Xxxxx (“Executive”).
W
I T N E
S S E T H:
WHEREAS,
Company is a technology and telecommunications company that has designed
and
patented wireless communications products and systems combining advanced
wireless technology to provide features of location based devices;
and
WHEREAS,
Company wishes to assure itself of the services of Executive for the period
and
upon the terms and conditions provided in this Agreement; and
WHEREAS,
Executive is willing to serve in the employ of Company on a full-time basis
for
said period and upon the terms and conditions provided in this
Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties hereto agree as follows:
1. Employment.
a. Term
and Title. Subject to the terms and conditions of this Agreement,
Company hereby agrees to employ Executive as Chief Operations Officer, or
in
such other responsible or additional executive capacity as set forth herein,
commencing on the Effective Date and continuing in full force and effect
until
the Fifth (5) anniversary of the Effective Date; provided however, that the
term
of this Agreement shall automatically be extended for additional one-year
periods unless either party provides written notice to the contrary at least
60
days prior to the end of the term then in effect (“Employment
Term”).
b. Duties
and Responsibilities. During the Employment Term, Executive
agrees to devote his/her working time and attention to the business and affairs
of Company and to faithfully and efficiently perform all reasonable
responsibilities and duties commensurate with his/her position in Company
to the
best of his/her skill and abilities, in a competent and professional
manner. Executive agrees to fulfill such general management duties
and responsibilities as are consistent with his/her position. In
addition, Executive shall serve as a director of the Company without additional
compensation if elected by the shareholders of the Company.
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c. Exclusive
Services. During the Employment Term, Executive further agrees
not to engage in any business or perform any services that are competitive
with
the business of or services provided by Company or that may be deemed to
constitute a conflict of interest. Notwithstanding anything to the
contrary contained in this Section 1(c), Executive shall not be prohibited
from
(i) rendering services to relatives, charitable or community organizations;
(ii)
managing his/her personal investments in such manner as to not interfere
with
the performance of his/her duties hereunder; or (iii) owning no more
than 4.99% of the equity securities of a corporation or other
entity, whose securities are registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended.
2. Compensation;
Benefits. During the Employment Term, Executive shall be entitled
to the compensation package and benefits provided below:
a. Base
Salary and Stock Compensation. During the Employment Term, in
full consideration for the services to be rendered by Executive and in complete
discharge of Company’s salary obligations hereunder, Company shall pay to
Executive a base salary (“Base Salary”) of Ten-Thousand dollars ($10,000) per
month, which amount shall be paid to Executive in accordance with Company’s
payroll policies as in effect from time to time for senior executives of
Company, subject to all standard payroll deductions, if any.
b. Adjustments
to Base Salary. The base monthly salary shall be automatically
increased by $2,500 for each performance deliverable as follows: (i) upon
completion and FCC approval of the PocketFinder device; (ii) at such time
as the
Company receives revenue from initial sales of its products; and, (iii) upon
attaining 250,000 subscribers. Executive’s monthly base salary shall
then be increased by $5,000 upon attaining 500,000 subscribers and by $10,000
dollars upon attaining the major milestone of 1,000,000
subscribers. Monthly salaries will continue to be increased by
$10,000 dollars upon each additional 500,000 subscribers added above the
1,000,000-customer base. Furthermore, monthly salary bases will be
increased by $10,000 for each country the Company’s products successfully
achieve cash flow in.
c. Additional
Compensation. In the event that Company is issued FCC approval on
the Personal Locator, the Executive will receive a bonus of $100,000
to be negotiated in Cash or Common Stock (Executive’s choice) to be exercised at
$1.00 per share equating to 100,000 shares.
d. Bonus. Each
year during the Employment Term, the Company may pay a bonus (the “Bonus”) to
Executive, which may be part of a general bonus plan established by the
Board.
e. Stock
Incentive Plan/Options for Performance. Executive shall be
entitled to participate in the Stock Incentive Plan of the Company on such
terms
as the Board of Directors deems appropriate from time to time.
f. Expenses. Company
recognizes that in connection with Executive’s performance of Executive’s duties
and obligations under this Agreement, Executive shall incur certain expenses
of
a business character. Company shall reimburse Executive for all
ordinary and reasonable expenses incurred by Executive in connection with
performance of his/her duties hereunder, provided that Executive submits
to
Company substantiation of such expenses.
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g. Fringe
Benefits/Insurance. Executive shall be entitled to participate in
any and all benefits and perquisites as are generally provided by the Company
for the benefit of its executive employees including, but not limited to,
eligibility for participation in any group life, health, dental, vision,
hospitalization, disability or accident insurance, pension plan, retirement
savings plan, 401(k) plan, or other such benefit plan or policy which may
presently be in effect or which may hereafter be adopted by the Company;
provided, however, that nothing herein contained shall be deemed to require
the
Company to adopt or maintain any particular plan or policy, or to preclude
the
Company from amending or terminating any plan or policy.
h. Vacation
and Holidays. Executive shall be entitled to 4 weeks paid
vacation per year. Executive shall also be entitled to all paid
holidays given by Company to its employees.
3. Termination
of Employment.
a. Death. In
the event of Executive’s death occurring any time during the Employment Term,
the Agreement shall automatically terminate in which event Company shall
thereupon be released and discharged of and from all further obligations
under
this Agreement except as in Section 4 hereof.
b. Incapacity. In
the event of Executive’s physical or mental disease or disability, to such a
degree as to render Executive unable to substantially perform all of the
duties
and responsibilities with which Executive is then charged for a period of
180
consecutive days (“Incapacity”), Company may terminate Executive’s employment
upon written notice to Executive that he is being terminated for
Incapacity. Executive’s termination due to Incapacity shall be
effective the later of (i) the expiration of the above period of Incapacity
or
(ii) 30 days after the date of such notice.
c. Resignation. Executive
may resign his/her current position with Company and thereby terminate his/her
employment, for any reason by giving Company 90 days advance written
notice.
d. Termination
for Cause. Notwithstanding anything to the contrary contained in
this Agreement, Company may, by written notice to Executive, immediately
terminate Executive’s employment for “Cause.” For purposes of this
Agreement, “Cause” shall mean that one of the following events (each, a “Cause
Event”) shall have occurred after the Effective
Date: (i) Executive’s ongoing material breach of a
material provision of this Agreement, following written notice of such breach
from the board of directors of Company and a reasonable period of time to
cure;
(ii) chronic alcoholism or any other form of addiction that prevents Executive
from performing the essential functions of his/her position with a reasonable
accommodation.
e. Suspension
for Cause. Company may, by written notice to Executive, suspend
the employment of Executive only for Cause. If Company exercises such
right of suspension, Executive’s obligation to render services, but not
Company’s obligation to pay Executive’s Base Salary, shall be suspended for the
period of time set forth in the notice; but in no event shall such suspension
exceed a period of time equal to 3 consecutive months. Company may,
in its reasonable discretion by written notice, terminate the employment
of
Executive at the expiration of the suspension period.
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f. Termination
without Cause. Any of the following shall constitute a
“termination without cause”: (i) termination of Executive’s full-time
employment hereunder for any reason other than set forth in Sections 3(a)
through (e) above; (ii) failure to elect or re-elect, or appoint or
re-appointment, Executive as Co-President and Chief Executive Officer of
the
Company, unless consented to by Executive; (iii) a material change in
Executive’s functions, duties or responsibilities with the Company, which change
would cause Executive’s position to become one of substantially less
responsibility or scope, unless consented to by the Executive; or (iv) a
material reduction in benefits or perquisites to Executive from those being
provided as of the Effective Date, unless consented to by
Executive.
4. Rights
Upon Termination.
a. Upon
termination of Executive’s employment pursuant to Section 3(a), (b) or (c)
hereof, Executive shall receive any salary or monies previously due and owing
to
Executive and remaining unpaid; (ii) outstanding reimbursable business expenses;
(iii) all earned but unused vacation time; (iv) life insurance benefits,
if
applicable, and (v) all other benefit entitlements in which Executive is
a
participant.
b. In
the event Executive’s employment is terminated by Company for Cause pursuant to
Sections 3d or (e) above, Executive shall be entitled to payment for (i)
all
outstanding reimbursable business expenses, (ii) any unpaid Base Salary or
incentive compensation that has accrued and has been earned for services
performed by Executive prior to the effective date of the termination, (iii)
all
earned but unused vacation time. Executive shall not be entitled to
any other payments or compensation. Company shall be released and
discharged of and from any further obligation to Executive, except the payment
of any monies previously due and owing to Executive.
c. In
the event Executive’s employment is terminated by Company pursuant to Sections
3(f) hereof, Company shall pay Executive the Base Salary at least equal to
the
salary, including all bonuses and commissions, of the highest paid employee
of
the Company and medical benefits through the end of the Employment Term,
or if
such termination occurs in the last year of the Employment Term for a period
of
two years after the date of termination. If at any time during such
period any events occur that would have resulted in increasing the Base Salary
under the provisions of Section 2(b) if Executive were still employed by
Company, Executive shall promptly be paid such additional
amounts. Executive shall not be entitled to any other payments or
compensation. Company shall be released and discharged of and from
any further obligation to Executive, except the payment of any monies previously
due and owing to Executive.
d. Sole
Obligations of Company. Company shall have no other contractual
obligations to Executive upon termination of Executive’s employment for any
reason, except as explicitly set forth in this Section 4 of this
Agreement.
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5. Cooperation
Following Termination. Executive agrees that, following notice of
termination of his/her employment with Company, he/she will cooperate fully
with
Company in all matters relating to the completion of her pending work on
behalf
of Company and the orderly transition of such work to such other officer
as
Company may designate. Executive further agrees that during and
following the termination of his/her employment with Company, he will cooperate
fully with Company as to any and all claims, controversies, disputes or
complaints over which he has any knowledge other than his or her employment
relationship with Company; provided, however, Executive will be reimbursed
by
Company for any out of pocket expenses incurred pursuant to his/her duties
under
this Section 5 and reasonably compensated for his/her time. Such
cooperation includes, but is not limited to, providing Company with all
information known to him/her related to such claims, controversies, disputes
or
complaints and appearing and giving testimony in any forum.
6. Confidential
Information.
a. Company
Information. Executive acknowledges that during the course of
employment, Executive will have access to information about Company and that
Executive’s employment with Company shall bring Executive into close contact
with proprietary information of Company. In recognition of the
foregoing, Executive agrees at all times during and following Executive’s
employment with Company, to hold in confidence, and not to use, except for
the
benefit of Company, or to intentionally disclose to any person, firm,
corporation or other entity without written authorization of Company, any
“Confidential Information” of Company which Executive obtains or
creates. Executive understands that “Confidential Information” means
any Company proprietary information, technical data, trade secrets or know-how,
including, but not limited to, research, product plans, products, services,
suppliers, customer lists, prices and costs, markets, software, developments,
inventions, laboratory notebooks, processes, formulas, technology, designs,
drawing, engineering, hardware configuration information, marketing, licenses,
finances, budgets or other business information disclosed to Executive by
Company in writing or by drawings of parts or equipment, or created by Executive
during the period of Executive ‘s employment (the “Employment Period”) during
working hours. Executive understands that “Confidential Information”
includes information pertaining to any aspects of Company’s business which is
either information not known by actual or potential competitors of Company
or is
proprietary information of Company or its customers or suppliers, whether
of a
technical nature or otherwise. Executive further understand that
Confidential Information does not include any of the foregoing items which
have
become publicly known and made generally available through no wrongful act
of
Executive.
b. Third
Party Information. Executive recognizes that Company has received
and in the future will receive confidential or proprietary information from
third parties subject to a duty on Company’s part to maintain the
confidentiality of such information and to use such information only for
certain
limited purposes. Executive agrees to hold all such confidential or
proprietary information in confidence and not to intentionally disclose it
to
any person, firm or corporation or to use it except as necessary in carrying
out
my work for Company consistent with Company’s agreement with such third
party.
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7. Inventions.
a. Inventions
Retained and Licensed. Executive represents and warrants to
Company that there are no inventions, original works of authorship,
developments, improvements, or trade secrets which were made by Executive
prior
to the commencement of his/her employment with the Company under this Agreement
(collectively, “Prior Invention(s)”), which belong solely to Executive or belong
to Executive jointly with another, which relate in any way to any of Company’s
proposed businesses, products or research and development, and which are
not
assigned to Company hereunder. If, in the course of the Employment
Period, Executive incorporates into a Company product, process or machine
a
Prior Invention owned by Executive, Company is hereby granted and shall have
a
non-exclusive, non-royalty-based, license to make, have made, copy, modify,
make
derivative works of, use, sell and otherwise distribute such Prior Invention
as
part of or in connection with such Company product, process or
machine.
b. Assignment
of Inventions. Executive agrees that Executive will promptly make
full written disclosure to Company, will hold in trust for the right and
benefit
of Company, and hereby assigns to Company, or its designee, all rights, title
and interests throughout the world in and to any and all inventions, original
works of authorship, developments, concepts, know-how, improvements or trade
secrets, whether or not patentable or registrable under copyright or similar
laws, which Executive may solely or jointly conceive or develop or reduce
to
practice, or cause to be conceived or developed or reduced to practice during
the Employment Period that (i) relate at the time of conception or development
to the actual or demonstrably proposed business or research and development
activities of Company; (ii) result from or relate to any work performed for
Company during normal business hours; and (iii) are developed through the
use of
Confidential Information (collectively, “Inventions”). Executive
further acknowledges that all Inventions, which are made by Executive (solely
or
jointly with others) within the scope of and during the period of Executive’s
employment with Company, are “works made for hire” and are compensated by the
Base Salary, unless regulated otherwise by a separate agreement between the
“Company” and the “Executive”.
c. Inventions
on Executive’s Own Time. The provisions of Section 7(a) and 7(b)
above do not apply to any invention which qualifies fully under the provisions
of California Labor Code §2870, which provides as follows:§ 2870 - Invention on
Own time - Exemption from Agreement
(1) Any
provision in an employment agreement which provides that an Executive shall
assign, or offer to assign, any of his or her rights in an invention to his
or
her employer shall not apply to an invention that the Executive developed
entirely on his or her own time without using the employer’s equipment,
supplies, facilities, or trade secret information except for those inventions
that either (i) relate at the time of conception or reduction to practice
of the
invention to the employer’s business, or actual or demonstrably anticipated
research or development of the employer; or (ii) result from any work performed
by the Executive for the employer.
(2) To
the extent a provision in an employment agreement purports to require an
Executive to assign an invention otherwise excluded from being required to
be
assigned under subdivision (a) of Section 2870, the provision is against
the
public policy of this state and is unenforceable.
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d. Patent
and Copyright Rights. Executive agrees to assist Company, or its
designee, at Company’s expense, in every reasonable way to secure Company’s
rights in the Inventions and any copyrights, patents, trademarks, mask work
rights, moral rights, or other intellectual property rights relating thereto
in
any and all countries, including the disclosure to Company of all pertinent
information and data with respect thereto, the execution of all applications,
specifications, oaths, assignments, recordations, and all other instruments
which are necessary in order to apply for, obtain, maintain and transfer
such
rights and in order to assign and convey to Company, its successors, assigns
and
nominees the sole and exclusive rights, title and interest in and to such
Inventions, and any copyrights, patents, mask work rights, or other intellectual
property rights relating thereto.
8. Return
of Company Documents. Executive agree that, at the time of
termination of employment with Company for any reason, Executive will deliver
to
Company (and will not keep in my possession, recreate or deliver to anyone
else)
any and all Confidential Information and all other documents, materials,
information or property belonging to Company, its successors or
assigns. Executive further agrees that any property situated on
Company’s premises and owned by Company, including disks and other storage
media, filing cabinets or other work areas, is subject to inspection by Company
personnel at any time with or without notice.
9. Injunctive
Relief. Executive expressly acknowledge that any breach or
threatened breach of any of the terms and/or conditions set forth in Sections
6
and 7 of this Agreement will result in substantial, continuing and irreparable
injury to Company. Therefore, Executive hereby agrees that, in
addition to any other remedy that may be available to Company, Company shall
be
entitled to injunctive relief, specific performance or other equitable relief
by
a court of appropriate jurisdiction in the event of any breach of threatened
breach of the terms of this Agreement.
10. Miscellaneous.
a. Governing
Law. This Agreement is deemed to be entered into and performed in
Orange County, California. Except as otherwise explicitly noted, this
Agreement shall be governed by and construed in accordance with the laws
of the
State of California, without giving effect to the conflict of law rules of
California. The parties hereby submit to the exclusive jurisdiction
of the state of California in connection with any dispute arising from or
related to this Agreement, and Orange County shall be the sole venue
therefore.
b. Modifications
and Amendments. This Agreement may be modified or amended only by
a written instrument executed by the parties hereto and approved in writing
by a
duly authorized officer of Company and signed by the Executive
impacted. No modification or amendment shall be effective absent such
approval.
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c. Independence
and Severability. Each of the rights enumerated above shall be
independent of the others and shall be in addition to and not in lieu of
any
other rights and remedies available to Company at law or in
equity. If any of the covenants contained herein or any part of any
of them is hereafter construed or adjudicated to be invalid or unenforceable,
the same shall not affect the remainder of the covenant or covenants or rights
or remedies which shall be given full effect without regard to the invalid
portions. If any of the covenants contained herein are held to be
invalid or unenforceable because of the duration of such provision or the
area
or scope covered thereby, Executive agrees that the court or arbitrator making
such determination shall have the power to reduce the duration, scope and/or
area of such provision and in its reduced form said provision shall then
be
enforceable.
d. Notice. For
the purpose of this Agreement, notices and all other communications provided
for
in this Agreement shall be in writing and shall be deemed to have been duly
given as of the date if delivered in person or by telecopy, on the next business
day, if sent by a nationally recognized overnight courier service, and on
the
third business day if mailed by registered mail, return receipt requested,
postage prepaid, and if addressed to the Company then at its principal place
of
business, or if addressed to Executive, then his/her last known address on
file
with the Company.
e. Waiver. The
observation or performance of any condition or obligation imposed upon Executive
hereunder may be waived only upon the written consent of Company and the
Executive. Such waiver shall be limited to the terms thereof and
shall not constitute a waiver of any other condition or obligation of Executive
under this Agreement.
f. Assignment. This
Agreement is personal to Executive and shall not be assigned by
him/her. Company may assign its rights hereunder to (a) any
corporation or other legal entity resulting from any merger, consolidation
or
other reorganization to which Company is a party or (b) any corporation,
partnership, association or other legal entity or person to which Company
may
transfer all or substantially all of the assets and business of Company existing
at such time. All of the terms and provisions of this Agreement shall
be binding upon and shall inure to the benefit of and be enforceable by the
parties hereto and their respective successors and permitted
assigns.
g. Headings. The
headings have been inserted for convenience only and are not to be considered
when construing the provisions of this Agreement.
h. Counterparts. This
Agreement may be executed in one or more counterparts and transmitted by
facsimile, a copy of which shall constitute an original and each of which,
when
taken together, shall constitute one and the same agreement.
i. Survival
of Provisions. Notwithstanding anything to the contrary in this
Agreement, Sections 5, 6, 7, 8, 9 and 10 of this Agreement shall survive
the
termination of this Agreement for the period of time so specified or implied
in
such Sections, respectively.
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j. Arbitration. Any
controversy, dispute or claim of any nature whatsoever involving Company
and
Executive or Executive’s spouse or family, including without limitation any
claims arising out of, in connection with, or in relation to this Agreement
or
Executive’s employment with Company, any claims of unlawful discrimination,
sexual harassment or wrongful termination, and any issues of arbitrability
of
any such disputes, will be resolved by final and binding arbitration before
the
American Arbitration Association in Orange County, California, in accordance
with its employee arbitration rules.
k. Entire
Agreement. This Agreement constitutes the entire understanding
between the parties hereto in respect of the employment of Executive by Company,
superseding all negotiations, prior discussions, prior written, implied and
oral
agreements, preliminary agreements and understandings with Company or any
of its
officers, employees or agents.
IN
WITNESS WHEREOF, this Agreement is executed and agreed to as of October 11,
2007.
EXECUTIVE
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/s/
Xxxxxxx Xxxxx
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Xxxxxxx
Xxxxx
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LOCATION
BASED TECHNOLOGIES
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/s/
Xxxxx
Xxxxx
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Xxxxx
Xxxxx
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Chief
Executive Officer and Co-President
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/s/
Xxxxxx
Xxxxxxx
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Xxxxxx
Xxxxxxx
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President
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