EXECUTIVE AGREEMENT
Exhibit 10.3
This Executive Agreement (this “Agreement”) is made and entered into as of this 1st day of
April, 2010, by and between Officeware Corporation, a Texas corporation (the “Company”) and Xxxxxx
Xxxxxx (“Executive”), for the express benefit of Immediatek, Inc. (the “Investor”), a third-party
beneficiary to this Agreement, upon the following terms and conditions:
| 1. | Employment. For the four (4) year period commencing on April 1,
2010 (the “Effective Date”) and terminating on March 31, 2014 (the “Term”), the
Company shall retain the services of Executive as CIO and Co-Founder of the Company
reporting directly to the Board, to perform such duties and services as may be
assigned to him by the Board of Directors of the Company, as approved by the Board of
Directors of the Investor, (the “Board”) subject to the terms and limitations
expressed in this Agreement. |
| 2. | Compensation. As compensation for the services to be rendered to the
Company by Executive hereunder, the Company shall pay to Executive a salary at the
annual rate of $174,070.80 (the “Annual Salary”). All salary shall by payable by the
Company to Executive on a current basis as services are rendered in accordance with
regular payroll practices of the Company. |
| 3. | Benefits. During the Term, Executive shall be included in any medical
group insurance plan that is made available from time to time to other Company
employees. The Company shall purchase customary directors and officers insurance
coverage for Executive to the extent that Executive is a director or officer of
Investor. Executive shall be entitled to vacation time as is customarily made
available to Company’s employees. |
| 4. | Annual Compensation Review. Within 30 days after the annual
anniversary of this Agreement, the Board shall make the following determinations: |
| a. | First, the Board of Directors of the Company shall determine if
the Gross Profit Margin of the Company was 30% or greater for the most recent
fiscal year ended December 31. For purposes of this determination, “Gross
Profit Margin” shall mean the result of the following calculations: |
| i. | The Board of Directors of the Company shall
deduct from the revenues of the Company, as determined in accordance
with generally accepted accounting procedures (“GAAP”), that portion
of the revenues that are not directly attributable to online storage
services, and excluding any discounts, refunds, offsets, barter
revenues and any
accounts receivables which are more than 90 days old (this revenue
amount, as calculated by the Board, the “Adjusted Revenues”); |
| ii. | The Board will then subtract from Adjusted
Revenues the cost of sales, as determined in accordance with GAAP
(this amount, as reasonably determined by the Board in accordance
with the guidance provided by GAAP, the “Adjusted Gross Profit”),
provided, however, that should the Board direct the Company to incur
additional expenses which will be accounted for as a cost of sales
and Executive notifies the Board in writing within 20 days of the
imposition of such expenses that Executive has determined in good
faith that such expenses are unnecessary, undesirable and not cost
effective for future growth of the Company, then such expenses shall
be subtracted from the cost of sales for purposes of this calculation
and the revenues related to such expenses shall likewise be
subtracted from Adjusted Revenues; |
| iii. | The Board will then divide the Adjusted
Gross Profit by the Adjusted Revenues and express the quotient as a
percentage (such percentage, as calculated by the Board, the “Gross
Profit Margin”); |
| iv. | The Board will then determine if the Gross
Profit Margin is equal to or greater than 30% and if it is then the
Executive shall be eligible for the salary increase described below
in Section 4b. |
| b. | Provided the Gross Profit Margin of the Company was 30% or
greater for the most recent fiscal year ended December 31 as described above in
Section 4a, the Board shall determine if the Annual Salary should be
increased based upon the percentage increase in the Adjusted Gross Profit of
the most recent fiscal year ended December 31 compared to the fiscal year prior
to the most recent fiscal year ended December 31, based upon the following
criteria. |
| i. | If the Adjusted Gross Profit has increased
by 30% or more compared to the prior fiscal year, the Board shall
increase the Annual Salary by 5%. |
| ii. | If the Adjusted Gross Profit has increased
by 40% or more compared to the prior fiscal year, the Board shall
increase the Annual Salary by 8%. |
| iii. | If the Adjusted Gross Profit has increased
by 50% or more compared to the prior fiscal year, the Board shall
increase the Annual Salary by 10%. |
| iv. | Such increase of the Annual Salary, if any,
shall be effective within 30 days after the annual anniversary of
this Agreement. |
| 5. | Responsibilities and Duties. Unless otherwise agreed to by the Board,
Executive will devote full time, attention, and energies to the business of the
Company, and, during this employment, will not engage in any other business activity,
regardless of whether such activity is pursued for profit, gain, or other pecuniary
advantage. |
| 6. | Representations and Warranties. Executive hereby represents, warrants
and agrees that: |
| a. | Executive has extraordinary and unique skill and ability and
the services rendered to the Company hereunder cannot be replaced or the loss
thereof adequately compensated for in money damages. Any breach by Executive
of this Agreement will cause irreparable injury to the Company. Therefore, it
is agreed that in the event Executive in any manner breaches, or threatens to
breach, this Agreement, the Company, in addition to any other remedies that may
be available to it, shall have the right to obtain without the necessity of
posting any bond, from any court having jurisdiction, such equitable relief as
may by appropriate, including, without limitation, a decree enjoining Executive
from any further such breach, or threatened breach, of this Agreement. |
| b. | Executive has the full right, title and authority to enter into
this Agreement and perform his obligations hereunder. |
| c. | Executive has not granted, nor will he grant, any right, do any
act or enter into any agreement or understanding whatsoever that may or will
prevent Executive’s full performance of his obligations hereunder. |
| d. | Executive shall not conduct himself in any manner whatsoever
nor do any act, fail to do any act nor make any statement that may or will
impugn, denigrate, disparage, or reflect negatively upon the name, reputation
or business interests of the Company, the owners of the Company or any
officers, directors, employees, partners, or affiliates of the Company or of
direct or indirect owners of the Company. |
| e. | The representations, warranties and covenants of the parties
contained in this Agreement shall survive the execution and delivery of this
Agreement. |
| 7. | Confidential Information. Executive hereby covenants and agrees at all
times during the term of this Agreement and thereafter to hold in strictest confidence,
and not to use, except for the benefit of the Company, nor to disclose to any person,
firm or corporation without written authorization, any of the Company’s Confidential
Information (as defined herein). Executive hereby understands and acknowledges that
“Confidential Information” means any and all information that relates to the Company’s
actual or anticipated business or research and development, technical data, trade
secrets or know-how, including, but not limited to, the Company’s customers,
advertisers, suppliers, users, software,
developments, inventions, processes, formulas, technology, designs, drawings,
engineering, hardware configurations information, marketing, finances or other
business information. Executive further understands that Confidential Information
does not include any of the foregoing items that is or becomes publicly known or
previously known or developed through no wrongful act or omission of Executive or of
others who were under confidentiality obligations as to the item or items involved.
Further, Executive shall not write, or supply information to others for the purpose
of writing, any books, periodicals or other publications (including fictional
accounts) concerning any current or former employer, partner or indirect or direct
owner of the Company or communicate with reporters or other members of the media
concerning any such persons or any such Confidential Information. Executive
acknowledges and agrees that subject to the foregoing any and all information and
reports obtained or produced by Executive in performance of his duties and
responsibilities hereunder shall at all times remain the confidential property of
the Company. This provision shall survive the termination or expiration of this
Agreement. |
| 8. | Assignment of Inventions. Executive hereby covenants and agrees that
Executive will promptly make full written disclosure to the Company, will hold in trust
for the sole right and benefit of the Company, and hereby assigns to the Company, or
its designee, all of Executive’s right title and interest in and to any and all
inventions, original works of authorship, developments, concepts, improvements,
designs, discoveries, ideas, online rights to any website and all materials contained
in and elements of such websites, trademarks 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 has caused to be conceived or
developed or reduced to practice, prior to and during the period of time Executive is
in the employ of the Company (collectively, “Inventions”). Executive further
acknowledges and understands that all original works of authorship that are made by
Executive (solely or jointly with others) during the period of Executive’s employment
with the Company and that are protectable by copyright are “works made for hire,” as
that term is defined in the United States Copyright Act. Executive hereby understands
and agrees that the decision whether or not to commercialize or market any Invention is
within the Company’s sole discretion and for the Company’s sole benefit and that no
royalty will be due to Executive as a result of the Company’s efforts to commercialize
or market any such invention. If, in any judicial proceeding, or by operation of law
any assignment pursuant to this Section 8 is rendered void or ineffective,
Executive hereby grants to Company a perpetual, royalty-free, assignable, fully paid,
irrevocable license, to use and otherwise exploit such Inventions, including the right
to grant sublicenses and to make derivative works thereof, and to make, have made, use,
sell, offer for sale and import products, practice methods and processes and provide
services with respect to all of the foregoing. The Executive acknowledges that the
Company has a valuable body of trade secrets, including, without limitation, know-how,
concepts and other technical data (the “Proprietary Information”), for the development
and providing of its products |
or
services. The Executive is not aware that any of the Company’s employees is obligated under
any contract (including licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of his or her best efforts
to promote the interests of the Company, or that would conflict with the Company’s
business. The Executive does not believe it is, or will be, necessary to utilize
any inventions or proprietary rights of any of the Company’s employees (or people
the Company currently intends to hire) made prior to their employment by the
Company, or any consultants who have helped develop any patents, patent rights,
patent applications, trademarks, trademark rights, service marks, service xxxx
rights, trade names, trade name rights, copyrights or Proprietary Information,
except for those already transferred to the Company or transferred hereby.
| 9. | Third Party Beneficiary. The Company and Executive agree and intend
that the Investor is a third party beneficiary of this Agreement. The rights, duties
and obligations contained in this Agreement shall inure to the benefit of the Investor.
The Investor shall have any legal or equitable right to seek to enforce this Agreement,
to seek any remedy arising out of a party’s performance or failure to perform any term
or condition of this Agreement, or to bring an action for the breach of this Agreement. |
| 10. | Termination for Cause. The Company shall have the right to terminate
the employment of Executive under this Agreement For Cause immediately upon written
notice to Executive. For purposes of this Agreement, For Cause shall mean the
occurrence of any of the following: |
| a. | Executive’s failure to perform any of the duties, obligations
or responsibilities contemplated by this Agreement; |
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| b. | The death of Executive; |
| c. | The disability of Executive (meaning the physical or mental
inability of Executive to perform the essential functions of his position, with
or without reasonable accommodations as required by law, for a period of 90
consecutive days or 90 days in a 180-day period); |
| d. | Executive intentionally and knowingly uses or possesses illegal
drugs at any time, or intentionally and knowingly abuses alcohol while in the
course and scope of his employment with the Company; or |
| e. | Executive’s conviction or pleading nolo contendere to any
felony or Class A misdemeanor. |
Upon termination of Executive’s employment with the Company under this Section
10, the Term shall end, and the Company shall have no obligation to provide or
pay any compensation or other payments to Executive.
| 11. | Other Termination. The Company may also terminate this Agreement upon
written notice to Executive on account of any reason other than as provided in
Section 10. Upon termination of Executive’s employment with the Company
pursuant to this Section 11, the Term shall end, and the Company shall have no
obligation to provide or pay any compensation or other payments to Executive other than
the lesser of (i) the aggregate of sums payable pursuant to Section 2 (as most
recently increased, if applicable by Section 4) payable in the amounts and
times called for by Section 2 through March 31, 2014 and (ii) a sum equal to
the Executive’s then current Annual Salary payable in accordance with the regular
payroll practices of the Company over a period of one year following the date of
termination of this Agreement. |
| 12. | Protection of Confidential Information. The parties hereto acknowledge
that any adversarial or legal proceeding among them or between them and any third party
beneficiary to this Agreement (an “Action”) may require disclosure and discovery
activity that may involve production of Confidential Information or other sensitive,
proprietary, and/or confidential information and documents. The parties further
acknowledge that such Confidential Information and other information and documents
warrant special protection from public disclosure and from use for any purpose other as
permitted below. The parties and their attorneys are prohibited from, for any reason,
publicizing, communicating, or disclosing any Confidential Information or documents or
information protected by this Agreement and obtained from any other party or upon
written authorization of any other party to any Action as part of disclosures or
discovery (including but not limited to in response to judicial or adjudicative orders,
interrogatories, requests for production, requests for admission, depositions, physical
or mental examinations, and subpoenas) in any Action other than for the prosecution,
defense, or settlement of such Action. Confidential Information and other information
or documents covered by this Agreement may be disclosed by the parties or counsel to
(a) other parties in such Action and their attorneys; (b) professional, clerical,
secretarial, and other support staff assisting the parties’ attorneys; (c) any persons
retained or specially employed by the parties or their attorneys in preparation for
trial, such as consulting or testifying experts; (d) witnesses in the course of
preparation for or during depositions or trial, if in the good-faith belief of counsel
disclosure is necessary for the prosecution of the Action; or (e) as further directed
by order of the court in such Action. Before disclosing Confidential Information or
other information or documents covered by this Agreement to persons described in this
paragraph, counsel shall inform those persons of the existence and terms of this
Agreement. The parties and their attorneys may file with the court or other
adjudicative body any Confidential Information or other documents or information
protected by this Agreement and obtained from any other party in connection with any
pleading, trial, or hearing
relating to the prosecution, defense, or settlement of an Action. Before filing any
Confidential Information or other documents or information protected by this
Agreement with the court or other adjudicative body, however, the filing party shall
give the other party at least 72 hours written notice in advance and shall move the
court or other adjudicative body to file the documents or information under seal.
The parties agree and covenant to cooperate with one another in order that all such
filings are filed under seal. |
| 13. | Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, EXCLUDING THOSE LAWS THAT DIRECT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. |
| 14. | Specific Enforcement of Agreement. The parties to this Agreement
acknowledge and agree that the parties hereto would be irreparably damaged in the event
any of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, it is agreed that any party
hereto shall be entitled to an injunction to prevent breaches of this Agreement and to
specifically enforce the terms and provisions of this Agreement, in addition to any
other damages or other remedies to which they would be entitled. |
| 15. | Counterparts and Facsimile Execution. This Agreement may be executed
in two or more counterparts, each of which shall be considered one and the same
agreement and shall become effective when a counterpart has been signed by each party
to this Agreement and delivered (by facsimile or otherwise) to every other party to
this Agreement, it being understood that all parties need not sign the same
counterpart. Any counterpart or other signature delivered by facsimile or otherwise
shall be deemed for all purposes as constituting good and valid execution and delivery
of this Agreement by that party. |
| 16. | Headings. The headings of the sections of this Agreement are inserted
for convenience only and shall not by themselves determine the interpretation of this
Agreement. |
| 17. | Notices. Any notice required or permitted under this Agreement shall
be given in writing and shall be conclusively deemed effectively given and received
upon personal delivery or delivery by courier, or on the first business day after
transmission if sent by confirmed facsimile transmission, or five days after deposit in
the United States mail, by registered or certified mail, postage prepaid, addressed to
the address for that party as set forth below that party’s name on the signature page
to this Agreement, or at any other address as that party may designate by ten (10)
calendar days advance written notice. |
| 18. | Amendment of Agreement. This Agreement may be amended only by a
written instrument signed by the Company, Executive and the Investor. |
| 19. | Severability. If any provision of this Agreement is invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby. |
| 20. | Jurisdiction and Venue. EACH PARTY TO THIS AGREEMENT IRREVOCABLY AND
UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS LOCATED
IN DALLAS COUNTY, TEXAS, FOR ANY LAWSUITS, ACTIONS OR OTHER PROCEEDINGS ARISING OUT OF,
OR IN ANY WAY RELATING TO, THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. EACH PARTY TO THIS AGREEMENT AGREES NOT TO COMMENCE ANY LAWSUIT, ACTION OR
OTHER PROCEEDING ARISING OUT OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, EXCEPT IN THE COURTS SET FORTH IN THE
IMMEDIATELY PRECEDING SENTENCE. |
| 21. | Waiver of Jury Trial. THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY CONCERNING ANY
LITIGATION BASED HEREON OR IN CONNECTION WITH THE AGREEMENTS, RELATIONSHIPS OR
TRANSACTIONS CONTEMPLATED HEREUNDER. |
| 22. | Entire Agreement; Successors and Assigns. This Agreement constitutes
the entire agreement among the parties to this Agreement relating to the subject matter
of this Agreement. Subject to the exceptions specifically set forth in this Agreement,
the terms and conditions of this Agreement shall inure to the benefit of, and be
binding upon, the respective executors, administrators, heirs, successors, legal
representatives and assigns of the parties to this Agreement. |
| 23. | Survival of Representations and Warranties and Covenants. The
representations and warranties of the parties contained in this Agreement shall survive
the execution of this Agreement and continue in full force and effect until the
18-month anniversary of the date of this Agreement. No claim based upon the breach of
a representation or warranty may be made or asserted in respect thereof unless written
notice of such claim shall have been given prior to the 18-month anniversary of the
date of this Agreement. If written notice of such a claim has been given prior to such
date, the relevant representations and warranties shall survive as to such claim, until
such claim is finally resolved. All covenants and agreements contained herein shall
remain in full force and effect until such covenant or agreement has been performed or
satisfied, or has terminated in accordance with its terms. |
| 24. | Voluntary and Informed Act. Executive hereby acknowledges and agrees
to each of the following items: |
| a. | Executive is executing this Agreement voluntarily and without
any duress or undue influence by the Company or anyone else; |
| b. | Executive has carefully read this Agreement; Executive has
asked any questions needed for Executive to understand the terms, consequences
and binding effect of this Agreement and fully understands them; and |
| c. | Executive has had the opportunity to seek the advice of an
attorney of his choice before signing this Agreement, and has either obtained
such advice or does not wish to seek it. |
Signature Page Follows.
IN WITNESS WHEREOF, the parties to this Agreement have executed this Agreement as of the day
and year first above written.
| Company: | Officeware Corporation, a Texas corporation |
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| By: | /s/ Xxxxxxx Xxxx | |||
| Name: | Xxx Xxxx | |||
| Title: | President | |||
| Officeware Corporation 0000 Xxxxxxxx Xxxxxxx, Xxxxx 000 Xxxxxx, Xxxxx 00000 Attention: Chief Financial Officer With a copy to: Xxxxxx Xxxx 0000 Xxxxxxxx Xxxxxx Xxxxxx, Xxxxx 00000 Fax (000)000-0000 |
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| Executive: | /s/ Xxxxxx Xxxxxx | |||
| Xxxxxx Xxxxxx | ||||
