APC GROUP, INC. EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT
(this "Agreement") is entered into this 1st day of March, 2009 ( the “Effective
Date”), between APC Group, Inc., a Nevada corporation (the “Company"), and
Xxxxxxx X. Xxxxxxx (“Executive”, collectively with the Company sometimes
referred to as the “Parties” and each individually sometimes referred to as a
“Party”). Unless otherwise indicated, all references to Sections are to Sections
in this Agreement.
W
I T N E S S E T H:
WHEREAS, the Company desires
to obtain the services of Executive, and Executive desires to be employed by the
Company upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in
consideration of the premises, the agreements herein contained and other good
and valuable consideration, receipt of which is hereby acknowledged, the parties
hereto agree as of the date hereof as follows:
1. Employment. The Company hereby
agrees to employ Executive, and Executive hereby agrees to serve the Company, as
President and Chief Executive Officer (“Employment”) for a period of nine (9)
months (the “Term”) beginning on the Effective Date and ending on November 30,
2009. This Agreement is automatically renewable for successive terms
of twelve (12) months. Executive or the Company shall provide the
other with written notice of non-renewal at least thirty (30) days, but not more
than sixty (60) days, before the end of the period of Employment.
2. Scope of Employment.
(a) During
the Employment, Executive will serve as President and Chief Executive Officer of
the Company. In that connection, Executive will (i) devote his full-time,
attention, and energies to the business of the Company and will diligently and
to the best of his ability perform all duties incident to his employment
hereunder; (ii) use his best efforts to promote the interests and goodwill of
the Company; and (iii) perform such other duties as the Board of Directors of
the Company, or its authorized representative, may from time-to-time require,
consistent with the general level and type of duties and responsibilities
customarily associated with such position.
(b) Section
2(a) shall not be construed as preventing Executive from (i) serving on
corporate, civic or charitable boards or committees, or (ii) making investments
in other businesses or enterprises; provided that in no event shall any such
service, business activity or investment require the provision of substantial
services by Executive to the operations or the affairs of such businesses or
enterprises such that the provision thereof would interfere in any respect with
the performance of Executive's duties hereunder; and subject to Section
6.
3. Compensation and Benefits During
Employment. During the Employment, the Company shall provide compensation to
Executive as follows.
(a) Executive
shall receive a base salary at the annualized rate of one hundred twenty
thousand dollars ($1200,000) or ten thousand dollars ($10,000) a
month. Such salary shall be paid periodically in accordance with
normal Company payroll practices. The Company shall be responsible
for the withholding of all taxes to the Internal Revenue Service as well as any
and all other taxes payable in the United States including taxes payable to any
state or local jurisdiction. The Company shall review the base salary
at least annually, and, if appropriate, increase it. The annual salary of
$120,000, together with any increases thereto, shall be referred to herein as
the “Base Salary.”
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(b) Executive
shall receive **** shares of the Company’s common stock (“Stock Compensation”)
registered on Form S-8 and bearing a legend regarding the Consultant’s status as
an affiliate within the meaning of Rule 144 (“S-8 Shares”), which shall accrue
monthly in equal amounts of **** S-8 Shares per month and are payable
quarterly.
(c) The
Consultant shall receive $20,000 as a signing bonus.
(d) Executive
will be entitled to participate in any health insurance or other employee
benefit plan which the Company may adopt in the future.
(e) The
Company will pay or reimburse Executive for reasonable travel, entertainment or
other expenses incurred by Executive in the furtherance of or in connection with
the performance of Executive’s duties hereunder in accordance with the Company’s
established policies.
(f) Executive
will be entitled to participate in any incentive program or discretionary bonus
program of the Company which may be implemented in the future by the Board of
Directors.
(g) Executive
will be entitled to participate in any stock option plan of the Company which
may be approved in the future by the Board of Directors.
(h) In the
event that the Company obtains director or officer insurance covering any person
during the Term of this Agreement, the Company will also take reasonable
measures to obtain such insurance covering Executive.
4. Confidential
Information.
(a) Executive
acknowledges that the law provides the Company with protection for its trade
secrets and confidential information. Executive will not disclose,
directly or indirectly, any of the Company’s confidential business information
or confidential technical information to anyone without authorization from the
Company’s management. Executive will not use any of the Company’s
confidential business information or confidential technical information in any
way, either during or after the Employment with the Company, except as required
in the course of the Employment.
(b) Executive
will strictly adhere to any obligations that may be owed to former employers
insofar as Executive’s use or disclosure of their confidential information is
concerned.
(c) Information
will not be deemed part of the confidential information restricted by this
Section 4 if Executive can show that: (i) the information was
in Executive’s possession or within Executive’s knowledge before the Company
disclosed it to Executive; (ii) the information was or became generally known to
those who could take economic advantage of it; (iii) Executive
obtained the information from a party having the right to disclose it to
Executive without violation of any obligation to the Company, or (iv) Executive
is required to disclose the information pursuant to legal process (e.g., a
subpoena), provided that Executive notifies the Company immediately upon
receiving or becoming aware of the legal process in question. No combination of
information will be deemed to be within any of the four exceptions in the
previous sentence, however, whether or not the component parts of the
combination are within one or more exceptions, unless the combination itself and
its economic value and principles of operation are themselves within such an
exception or exceptions.
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(d) All
originals and all copies of any drawings, blueprints, manuals, reports, computer
programs or data, notebooks, notes, photographs, and all other recorded,
written, or printed matter relating to research, manufacturing operations, or
business of the Company made or received by Executive during the Employment are
the property of the Company. Upon Termination of the Employment,
whether or not with Cause, Executive will immediately deliver to the Company all
property of the Company which may still be in Executive’s
possession. Executive will not remove or assist in removing such
property from the Company’s premises under any circumstances, either during the
Employment or after Termination thereof, except as authorized by the Company’s
management.
(e) For
a period of one year after the date of Termination of the Employment, Executive
will not, either directly or indirectly, hire or employ or offer or participate
in offering employment to any person who at the time of such Termination or at
any time during such one year period following the time of such Termination was
an employee of the Company without the prior written consent of the
Company.
5. Ownership of Intellectual
Property.
(a) The
Company will be the sole owner of any and all of Executive’s Inventions that are
related to the Company’s business, as defined in more detail below.
(b) For
purposes of this Agreement, “Inventions” means all inventions, discoveries, and
improvements (including, without limitation, any information relating to
manufacturing techniques, processes, formulas, developments or experimental
work, work in progress, or business trade secrets), along with any and all other
work product relating thereto.
(c) An
Invention is “related to the Company’s business” (“Company-Related Invention”)
if it is made, conceived, or reduced to practice by Executive (in whole or in
part, either alone or jointly with others, whether or not during regular working
hours), whether or not potentially patentable or copyrightable in the U.S. or
elsewhere, and it either: (i) involves equipment, supplies, facilities, or trade
secret information of the Company; (ii) involves the time for which Executive
was or is to be compensated by the Company; (iii) relates to the business of the
Company or to its actual or demonstrably anticipated research and development;
or (iv) results, in whole or in part, from work performed by Executive for the
Company.
(d) Executive
will promptly disclose to the Company, or its nominee(s), without additional
compensation, all Company-Related Inventions.
(e) Executive
will assist the Company, at the Company’s expense, in protecting any
intellectual property rights that may be available anywhere in the world for
such Company-Related Inventions, including signing U.S. or foreign patent
applications, oaths or declarations relating to such patent applications, and
similar documents.
(f) To
the extent that any Company-Related Invention is eligible under applicable law
to be deemed a “work made for hire,” or otherwise to be owned automatically by
the Company, it will be deemed as such, without additional compensation to
Executive. In some jurisdictions, Executive may have a right,
title, or interest (“Right,” including without limitation all right, title, and
interest arising under patent law, copyright law, trade-secret law, or
otherwise, anywhere in the world, including the right to xxx for present or past
infringement) in certain Company-Related Inventions that cannot be automatically
owned by the Company. In that case, if applicable law permits
Executive to assign Executive’s Right(s) in future Company-Related Inventions at
this time, then Executive hereby assigns any and all such Right(s) to the
Company, without additional compensation to Executive; if not, then Executive
agrees to assign any and all such Right(s) in any such future Company-Related
Inventions to the Company or its nominee(s) upon request, without additional
compensation to Executive.
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6. Non-competition. As a
condition to, and in consideration of, the Company’s entering into this
Agreement, and giving Executive access to certain confidential and proprietary
information, which Executive recognizes is valuable to the Company and,
therefore, its protection and maintenance constitutes a legitimate interest to
be protected by the provisions of this Section 6 as applied to Executive and
other employees similarly situated to Executive, and for ten dollars ($10) and
other good and valuable consideration, the receipt and sufficiency of which
Executive hereby acknowledges, Executive acknowledges and hereby agrees as
follows:
(a) that
Executive is and will be engaged in the business of the Company;
(b) that
Executive has occupied a position of trust and confidence with the Company prior
to the Effective Date, and that during such period and the period of Executive’s
Employment under this Agreement, Executive has, and will, become familiar with
the Company’s trade secrets and with other proprietary and confidential
information concerning the Company;
(c) that
the obligations of this Agreement are directly related to the Employment and are
necessary to protect the Company’s legitimate business interests; and that the
Company’s need for the covenants set forth in this Agreement is based on the
following: (i) the substantial time, money and effort expended and to
be expended by the Company in developing technical designs, computer program
source codes, marketing plans and similar confidential information; (ii) the
fact that Executive will be personally entrusted with the Company’s confidential
and proprietary information; (iii) the fact that, after having access to the
Company’s technology and other confidential information, Executive could become
a competitor of the Company; and (iv) the highly competitive nature of the
Company’s industry, including the premium that competitors of the Company place
on acquiring proprietary and competitive information; and
(d) that
for a period commencing on the Effective Date and ending twelve (12) months
following Termination as provided in Section 11, Executive will not, directly or
indirectly, serve as employee, agent, consultant, stockholder, director,
co-partner or in any other individual or representative capacity, own, operate,
manage, control, engage in, invest in or participate in any manner in, act as
consultant or advisor to, render services for (alone or in association with any
person, firm, corporation or entity), or otherwise assist any person or entity
that directly or indirectly engages or proposes to engage in (i) the same, or a
substantially similar, type of business as that in which the Company engages; or
(ii) the business of distribution or sale of (A) products and services
distributed, sold or license by the Company at the time of Termination; or (B)
products and services proposed at the time of Termination to be distributed,
sold or licensed by the Company, anywhere in North America (the “Territory”);
provided, however
(e) that
nothing contained herein shall be construed to prevent Executive from investing
in the stock or securities of any competing corporation listed on any recognized
national securities exchange or traded in the over the counter market in the
United States, but only if (i) such investment is of a totally passive nature
and does not involve Executive devoting time to the management or operations of
such corporation and Executive is not otherwise involved in the business of such
corporation; and if (ii) Executive and his associates (as such term is defined
in Regulation 14(A) promulgated under the Securities Exchange Act of 1934, as in
effect on the Effective Date), collectively, do not own, directly or indirectly,
more than an aggregate of two percent (2%) of the outstanding stock or
securities of such corporation.
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7. Legal Fees and
Expenses. In the event of a lawsuit, arbitration, or other
dispute-resolution proceeding between the Company and Executive arising out of
or relating to this Agreement, the prevailing party, in the proceeding as a
whole and/or in any interim or ancillary proceedings (e.g., opposed motions,
including without limitation motions for preliminary or temporary injunctive
relief) will be entitled to recover its reasonable attorneys’ fees and expenses
unless the court or other forum determines that such a recovery would not serve
the interests of justice.
8. Successors.
(a) This
Agreement shall inure to the benefit of and be binding upon (i) the Company and
its successors and assigns; (ii) Executive and heirs, nominees, legal
representatives and/or assigns, except that Executive’s duties and
responsibilities under this Agreement are of a personal nature and will not be
assignable or delegable in whole or in part.
(b) The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation, Acquisition or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "the Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or
otherwise.
9. Arbitration.
(a) Except
as set forth in paragraph (b) of this Section 9 or to the extent prohibited by
applicable law, any dispute, controversy or claim arising out of or relating to
this Agreement will be submitted to binding arbitration before a single
arbitrator in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association in effect on the
date of the demand for arbitration. The arbitration shall take place
before a single arbitrator, who will preferably but not necessarily be a lawyer
but who shall have at least five years’ experience in working in or with
entities engaged in the business of the Company. Unless otherwise
agreed by the parties, the arbitration shall take place in Fairbanks County,
Alaska. The arbitrator shall apply Alaska law to the merits of any
dispute or claim, without reference to rules of conflict of
law. Executive hereby expressly consents to the personal jurisdiction
of the state and federal courts located in Alaska for any action or proceeding
arising from or relating to this Agreement and/or relating to any arbitration in
which the parties are participants. The arbitrator is hereby directed
to take all reasonable measures not inconsistent with the interests of justice
to expedite, and minimize the cost of, the arbitration proceedings.
(b) To
protect inventions, trade secrets, or other confidential information of Section
4, and/or to enforce the non-competition provisions of Section 6, the Company
may seek temporary, preliminary, and/or permanent injunctive relief in a court
of competent jurisdiction, in each case, without waiving its right to
arbitration.
(c) At
the request of either party, the arbitrator may take any interim measures he/she
deems necessary with respect to the subject matter of the dispute, including
measures for the preservation of confidentiality set forth in this
Agreement.
(d) Judgment
may be entered on the arbitrator’s decision in any court having
jurisdiction.
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(e) EXECUTIVE
HAS READ AND UNDERSTANDS THESE PROVISIONS, WHICH DISCUSS ARBITRATION. EXECUTIVE
UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY
FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT,
OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH, OR
TERMINATION THEREOF TO BINDING ARBITRATION TO THE EXTENT PERMITTED BY LAW, AND
THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF
THE EMPLOYER/EXECUTIVE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING
CLAIMS:
(i) ANY
AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH
EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH
EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS;
NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL
INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND
DEFAMATION;
(ii) ANY
AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE,
INCLUDING, BUT NOT LIMITED TO, THE CIVIL RIGHTS ACT OF 1991, THE AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF
1990, THE FAIR LABOR STANDARDS ACT; AND
(iii) ANY
AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO
EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
10. Indemnification. The
Company shall to the full extent permitted by law or as set forth in
the articles of incorporation, and any future amendments, and the
bylaws of the Company, indemnify, defend and hold harmless Executive from and
against any and all claims, demands, liabilities, damages, losses and expenses
(including attorney's fees, court costs and disbursements) arising out of the
performance of duties hereunder except in the case of Executive’s gross
negligence or willful misconduct.
11. Termination. This
Agreement and the employment relationship created hereby will terminate (i) upon
the disability or death of Executive under Section 11 (a) or 11(b); (ii) with
cause under Section 11 (c); (iii) for good reason under Section 11 (d); or (iv)
without cause under Section 11(e).
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(a)
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Disability. The
Company shall have the right to terminate the employment of Executive
under this Agreement for disability in the event Executive suffers an
injury, illness, or incapacity of such character as to substantially
disable his from performing his duties without reasonable accommodation by
Executive hereunder for a period of more than thirty (30) consecutive days
upon the Company giving at least thirty (30) days written notice of
Termination.
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(b)
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Death. This Agreement
will terminate on the Death of the
Executive.
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(c)
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With
Cause. Company may terminate this Agreement at any time
because of, (i) an act of material dishonesty made by Executive in
connection with Executive’s responsibilities as an employee; (ii)
Executive’s conviction of, or plea of nolo contendere
to, a felony or other crime involving moral turpitude, dishonesty or theft
or fraud; or (iii) Executive’s gross misconduct. Any act, or
failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done, by
Executive in good faith and in the best interests of the Company and thus
shall not be deemed grounds for Termination With
Cause.
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(d)
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Good
Reason. The Executive may terminate his employment for
“Good Reason” by giving the Company ten (10) days written notice
if:
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(i)
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Executive
is assigned, without Executive’s express written consent, any duties
materially inconsistent with his positions, duties, responsibilities, or
status with Company as of the date hereof, or there is a material
reduction of Executive’s position, duties, responsibilities or status as
in effect as of the date hereof;
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(ii)
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There
is a significant reduction in Executive’s Base Salary or bonuses as in
effect immediately prior to such reduction;
or
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(iii)
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Company
does not pay any material amount of compensation due hereunder and then
fails either to pay such amount within the ten (10) day notice period
required for Termination hereunder or to contest in good faith such
notice. Further, if such contest is not resolved within thirty
(30) days, the Company shall submit such dispute to arbitration under
Section 9.
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(e)
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Without Cause. The
Company may terminate this Agreement without
cause.
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12. Obligations
of Company Upon Termination.
(a) In
the event of the termination of Executive’s employment pursuant to Section 11
(a), (b) or (c), Executive will be entitled only to the compensation earned by
him hereunder as of the date of such termination.
(b) In
the event of the termination of Executive’s employment pursuant to Section 11
(d) or (e), Executive will be entitled to receive as severance pay, an amount
equal to $10,000 or $20,000 if such termination occurs on or before November 30,
2009 and 2010, respectively, or $30,000 if such termination occurs after
November 30, 2010 in addition to all payments of salary earned through the date
of termination in one lump sum.
13. Other
Provisions.
(a) All
notices and statements with respect to this Agreement must be in
writing. Notices to the Company shall be delivered to the Chairman of
the Board or any other executive of the Company. Notices to Executive
may be delivered to Executive in person or sent to Executive’s then-current
mailing address as indicated in the Company’s records.
(b) This
Agreement sets forth the entire agreement of the parties concerning the subjects
covered herein; there are no promises, understandings, representations, or
warranties of any kind concerning those subjects except as expressly set forth
in this Agreement.
(c) Any
modification of this Agreement must be in writing and signed by all parties; any
attempt to modify this Agreement, orally or in writing, not executed by all
parties will be void.
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(d) If
any provision of this Agreement, or its application to anyone or under any
circumstances, is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability will not affect any other
provision or application of this Agreement which can be given effect without the
invalid or unenforceable provision or application and will not invalidate or
render unenforceable such provision or application in any other
jurisdiction.
(e) This
Agreement will be governed and interpreted under the laws of the United States
of America and the laws, but not the choice of law rules, of the State of Alaska
as applied to contracts made and carried out in Alaska by residents of
Alaska.
(f) No
failure on the part of any party to enforce any provisions of this Agreement
will act as a waiver of the right to enforce that provision.
(g) Section
headings are for convenience only and shall not define or limit the provisions
of this Agreement.
(h) This
Agreement may be executed in several counterparts, each of which is an
original. It shall not be necessary in making proof of this Agreement
or any counterpart hereof to produce or account for any of the other
counterparts. A copy of this Agreement signed by one party and faxed
to another party shall be deemed to have been executed and delivered by the
signing party as though an original. A photocopy of this Agreement
shall be effective as an original for all purposes.
(i) Executive
acknowledges that Executive has had the opportunity to discuss this Agreement
with and obtain advice from Executive’s private attorney, has had sufficient
time to, and has carefully read and fully understands all the provisions of this
Agreement, is knowingly and voluntarily entering into this Agreement, agrees to
be bound by this Agreement and has received a duplicate original of this
Agreement for Executive’s records.
IN
WITNESS WHEREOF the undersigned have duly executed this Agreement as of the date
first set out on the first page of this Agreement.
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/s/
Xxxxxxx
X. Xxxxxxx
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/s/
Xxxxxxx
X. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx
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Secretary
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DIRECTORS
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EXECUTIVE: | |||
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/s/ Xxxxxxx
Xxxxx
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/s/
Xxxxxxx
X. Xxxxxxx
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Xxxxxxx
Xxxxx
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Xxxxxxx
X. Xxxxxxx
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