AMENDED AND RESTAED EMPLOYMENT AGREEMENT
Exhibit 10.9
AMENDED AND RESTAED
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as
of December 31, 2008 (the “Effective Date”), by and among Fusion Multisystems, Inc., a Nevada
corporation (the “Company”), ▇▇▇▇ ▇▇▇▇▇, an individual (“Executive”), and West Coast Ventures, LLC
(“WCV”).
RECITALS:
A. The Company desires that Executive be employed by the Company to carry out the duties and
responsibilities described below, all on the terms and conditions hereinafter set forth.
B. Executive desires to accept such employment on such terms and conditions.
C. The parties entered into an Employment Agreement dated as of March 21, 2008 (the
“Employment Agreement”).
D. The parties now wish to amend and restate the Employment Agreement to include terms and
conditions designed to make any payments pursuant to the Employment Agreement compliant with
Section 409A of the Internal Revenue Code of 1986 (including the Treasury Regulations and other
published guidance related thereto) (“Section 409A”).
E. This Agreement shall govern the employment relationship between Executive and the Company
from and after the Effective Date, and supersedes and negates all previous negotiations and
agreements with respect to such relationship.
NOW, THEREFORE, in consideration of the above recitals incorporated herein and the mutual
covenants and promises contained herein and other valuable consideration, the receipt and
sufficiency of which is hereby expressly acknowledged, the parties agree as follows:
1. EMPLOYMENT. Subject to the terms set forth herein, the Company hereby agrees to
continue to employ Executive as its Senior Vice President of Marketing. Executive shall report
directly to the Company’s Chief Executive Officer and shall perform such officer level duties and
have such officer level authority and responsibility as is usual and customary for such position,
plus any additional officer level duties as may reasonably be assigned from time to time by the
Company’s Board of Directors (the “Board”), including but not limited to providing services to one
or more of the Company’s subsidiaries or affiliates (the compensation for such services shall be
covered exclusively by Sections 3 through 8 of this Agreement). Executive hereby accepts such
employment and agrees to devote substantially all of Executive’s business time, energy and skill to
the performance of Executive’s duties for the Company. Executive shall be subject to the Company’s
policies, procedures and approval practices, as generally in effect from time-to-time.
2. EMPLOYMENT TERM. Executive’s employment hereunder is “at-will” and either Executive or
the Company may terminate such employment at any time, for any or no reason, subject to the
provisions of Section 8.
| 3. | COMPENSATION. |
(a) Base Salary. The Company agrees to pay Executive an initial salary of Two
Hundred Ten Thousand Dollars ($210,000) per annum, less required deductions and withholdings
(the “Salary”). The Board will review Executive’s Salary annually to determine whether
Executive should receive an adjustment in Salary, provided that Executive’s Salary shall not
be reduced without Executive’s prior written consent. The Salary shall be paid in
installments accordance with the Company’s usual payroll practices.
(b) Annual Bonus. During the period of employment, Executive shall be entitled to
earn an annual performance-based bonus (“Annual Bonus”) as follows:
(i) Commencing in fiscal year 2008 and thereafter during Executive’s employment by
the Company, Executive will be eligible to receive an Annual Bonus of up to 50% of
Executive’s then-current Salary, based on Executive’s achievement of performance
objectives as established in good faith by the Board (or any Compensation Committee
of the Board) in writing as soon as reasonably practicable, but no later than the
last day of the first quarter of the applicable fiscal year. To earn any such
Annual Bonus, Executive must be continuously employed by the Company through the end
of the applicable fiscal year.
(ii) Each Annual Bonus earned by Executive, if any, will be due and payable on the
first regular payroll date following the 60th day after the end of the applicable
fiscal year (the “Annual Bonus Payment Date”). For the avoidance of doubt, if
Executive’s employment terminates after the end of an applicable fiscal year but
prior to the Annual Bonus Payment Date, Executive will be paid any earned Annual
Bonus on the Annual Bonus Payment Date. Any Annual Bonus paid to Executive shall be
subject to applicable deductions and withholdings.
| 4. | STOCK VESTING; EQUITY GRANTS. |
(a) Vesting. Executive has previously transferred 1,000,000 shares of the Company’s
common stock (the “Shares”) to WCV. Other than the Shares and 16,200 shares of the
Company’s Series A Preferred Stock held by GWN Finance, LLC (“GWN”), Executive currently
owns no other shares of capital stock of the Company or any securities convertible into or
exercisable for shares of capital stock of the Company. The shares of the Series A
Preferred Stock held by GWN are fully vested. WCV is an entity formed by Executive for
estate planning purposes and for the benefit of members of his immediate family. Executive
is the manager of WCV, and Executive hereby represents and warrants to the Company that this
Section 4 is a valid, binding and enforceable obligation of WCV.
(i) WCV hereby grants to the Company the right (the “Repurchase Right”), exercisable
at any time during the ninety (90)-day period following the date Executive ceases
for any reason to remain in Service (as defined below) to
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repurchase at the Purchase Price all or (at the discretion of the Company) any
portion of the Shares in which WCV has not acquired a vested interest in accordance
with the vesting provisions of this Section 4(a) (such shares are referred to as
“Unvested Shares”). For purposes of this Agreement, Executive shall be deemed to
remain in “Service” for so long as Executive continues to actually and physically
render services to the Company or any parent or subsidiary corporation, whether as
an employee, a non-employee member of the Board of Directors or an independent
contractor or consultant, solely as determined by and in accordance with the
directives of the Board of Directors of the Company. By executing this Agreement,
each of WCV and Executive agrees to abide by such Board determination.
(ii) The Repurchase Right shall be exercisable by written notice delivered to WCV
prior to the expiration of the ninety (90)-day period specified in Section 4(a)(i).
The notice shall indicate the number of Unvested Shares to be repurchased and the
date on which the repurchase is to be effected, such date to be not more than thirty
(30) days after the date of notice. To the extent one or more certificates
representing Unvested Shares may have been previously delivered to WCV, then WCV
shall, prior to the close of business on the date specified for the repurchase,
deliver to the Secretary of the Company the certificates representing the Unvested
Shares to be repurchased, each certificate to be properly endorsed for transfer.
The Company shall, concurrently with the receipt of such certificates, pay to WCV in
cash or cash equivalents (including the cancellation of any purchase-money
indebtedness), an amount equal to $5.465 per Share (as adjusted for stock splits,
dividends, combinations and the like).
(iii) The Repurchase Right shall terminate with respect to any Unvested Shares for
which it is not timely exercised under Section 4(a)(ii). In addition, the
Repurchase Right as to Unvested Shares shall terminate, and cease to be exercisable,
in accordance with the terms and conditions set forth in this Section 4(a)(iii).
Accordingly, as, and provided that, the Purchaser continues in continuous Service,
as defined above, the Purchaser shall acquire a vested interest in, and the
Repurchase Right as to certain Unvested Shares, solely to the extent set forth
below, shall lapse with respect to, the Shares in accordance with the following
provisions:
(A) WCV shall acquire a vested interest in and the Repurchase Right shall
lapse with respect to (1) 500,000 Shares as of the date hereof; and (2) the
balance of the Shares in a series of thirty-six (36) successive equal monthly
installments for each monthly period of continuous Service measured from the
date hereof.
(B) If Executive’s employment by the Company is terminated by the Company
pursuant to Section 8(d)(ii) or by Executive pursuant to Section 8(e), in
either case at such time that clause (C) below does not apply, and Executive
has executed (and not revoked) a general release of claims acceptable to the
Company, then WCV shall immediately acquire a vested
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interest in and the Repurchase Right shall lapse with respect to the lesser
of (l) all remaining Unvested Shares and (2) that number of Unvested Shares
that WCV would have vested in had Executive continued in Service for an
additional twelve months.
(C) If there occurs a Change in Control, as defined in Section 4(a)(vi)
below, while Executive is employed by the Company, and if Executive’s
employment by the Company is terminated by the Company or any successor
thereto pursuant to Section 8(d)(ii) or by Executive pursuant to Section 8(e)
on or following such Change in Control, then WCV shall immediately acquire a
vested interest in, and the Repurchase Right shall lapse with respect to, all
remaining Unvested Shares.
(D) If Executive dies or suffers a Disability (which results in the
termination of Executive’s employment pursuant to Section 8(b)), then WCV
shall immediately acquire a vested interest in and the Repurchase Right shall
lapse with respect to all remaining Unvested Shares.
(iv) No fractional shares shall be repurchased by the Company. Accordingly, if the
Repurchase Right extends to a fractional share (in accordance with the vesting
computation provisions of this Section 4(a)) at the time Executive ceases Service,
then such fractional share shall be added to any fractional share in which WCV is at
such time vested in order to make one whole vested share no longer subject to the
Repurchase Right.
(v) In the event of any share dividend, share split, recapitalization or other
change affecting the Company’s outstanding common shares as a class effected without
receipt of consideration, then any new, substituted or additional securities or
other property (including money paid other than as a regular cash dividend) that is
by reason of any such transaction distributed with respect to any Shares then
constituting Unvested Shares shall be immediately subject to the Repurchase Right.
Appropriate adjustments to reflect the distribution of such securities or property
shall be made to the number of Shares at the time subject to the Repurchase Right
hereunder and to the price per share to be paid upon the exercise of the Repurchase
Right to reflect the effect of any such transaction upon the Company’s capital
structure; provided, however, that the aggregate purchase price
shall remain the same.
(vi) “Change in Control” means: (x) any acquisition of the Company by
means of merger or other form of corporate reorganization in which outstanding
shares of the Company are exchanged for securities or other consideration issued, or
caused to be issued, by the acquiring corporation or its subsidiary and in which the
holders of capital stock of the Company immediately prior to the acquisition hold
less than 50% of the voting power of the surviving entity or its parent, (y) a sale
of all or substantially all of the assets of the Company, or (z) the closing of the
transfer (whether by merger, consolidation or otherwise), in one transaction or a
series of related transactions, to a person or group of affiliated persons, of the
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Company’s
then outstanding securities if, after such closing, such person or group of
affiliated persons would hold 50% or more of the outstanding voting stock of the
Company (other than an equity financing effected primarily for capital raising
purposes).
(b) Executive shall also be eligible to participate in and receive additional equity grants
commensurate with his position and level in any stock option plan, restricted stock plan or
other equity-based or equity related compensation plan, programs or agreements of the
Company made available generally to its senior executives. Executive acknowledges and
agrees, however, that, other than as set forth in clauses (i) and (ii) below, any such
grants shall be at the sole discretion of the Board (or any applicable committee of the
Board) and the Company is under no obligation to make any further equity grants to
Executive.
(i) After the closing of the Company’s Series A financing, including any subsequent
closings thereof, and upon the closing of the Company’s next round of equity
financing pursuant to which the Company has issued and sold shares of its next round
of preferred stock with gross proceeds to the Company of at least $10,000,000 (the
“Series B Financing”), if Executive is continuing in Service at the closing of such
Series B Financing, the Board shall authorize, and Executive shall receive, an
option grant to purchase that number of shares of the Company’s common stock equal
to not less than two percent (2%) of the Company’s fully-diluted (on an as-converted
to common stock basis) capital stock upon the closing of such Series B Financing
(which for purposes hereof shall include all shares of capital stock then
outstanding, including any shares issued pursuant to the
Series B Financing, and any shares of the Company’s common stock authorized and reserved for future issuance
under the Company’s then existing equity incentive plan, including any increase in
the number of such shares in connection with the Series B Financing) (the “Series B
Option”). With respect to the shares of the Company’s common stock underlying the
Series B Option (the “Series B Option Shares”), the option agreement shall provide
Executive shall acquire a vested interest in the Series B Option Shares, in a series
of forty-eight successive equal monthly installments for each monthly period of
continuous Service measured from the date of grant of the Series B Option.
(ii) With respect to the all future option grants to Executive, including the Series
B Option, the option agreements covering such grants shall provide for accelerated
vesting commensurate with the provisions in sub-sections 4(a)(iii)(B), (C) and (D).
(c) WCV shall not transfer any Unvested Shares (except to the Company or its assignee)
without the prior written consent of the Company, which consent may be granted, conditioned
or withheld in the Company’s sole discretion.
5. BENEFITS. Executive will be entitled to participate in the employee benefit plans,
including but not limited to any bonus plan, incentive, participation or extra compensation plan,
pension plan, profit-sharing plan, life, medical, dental, disability, or insurance plan or policy
or
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other plan currently and hereafter maintained by the Company of general applicability to other
senior executives of the Company; provided, however, that Executive’s right to receive equity or
participate in equity plans shall be governed exclusively by Section 4 of this Agreement, and
Executive’s right to receive severance upon a termination of employment for any reason shall be
governed exclusively by Section 8 of this Agreement. If Executive’s employment by the Company is
terminated by the Company pursuant to Section 8(d)(ii) or by Executive pursuant to Section 8(e),
following Executive’s Separation from Service (as defined below), the Company will pay the premiums
to continue Executive’s and any of Executive’s eligible dependents’ health insurance coverage under
COBRA (provided that Executive is eligible and timely elects COBRA coverage) until the earlier of
twelve (12) months after Executive’s Separation from Service and the first date that Executive and
Executive’s eligible dependents are covered under another employer’s program, provided that the
Company is providing Executive with health insurance coverage at the time of Executive’s
termination.
6. VACATION. Executive will be entitled to accrue vacation time, in an amount and subject
to the accrual limits determined by the Board annually in its sole discretion; provided that
Executive shall be entitled to accrue not less than four (4) weeks of paid vacation each
twelve-month period, and shall be subject to any maximum vacation accrual policy implemented by the
Company that is applicable to all executive officers. Such vacation shall be scheduled and taken
at the mutual convenience of the Executive and the Company.
7. EXPENSES. Executive shall be entitled to receive reimbursement for all reasonable and
customary documented travel and business expenses incurred in connection with Executive’s
employment, so long as such expenses are incurred and accounted for in accordance with the policies
and procedures as may be established from time to time by the Company.
8. TERMINATION. Notwithstanding anything in this Agreement to the contrary, in the event
of a termination of Executive’s employment by the Company, the following provisions shall apply:
(a) Death. Upon the death of Executive, Executive’s employment with the Company
shall terminate and the Company shall not be obligated to make any further payments to
Executive hereunder, except amounts due as Salary or accrued but unused vacation earned at
the time of Executive’s termination of employment, and reimbursement for any expenses
incurred prior to Executive’s termination of employment in accordance with Section 7 hereof
(collectively “Accrued Obligations”), as well as a pro rata portion of Executive’s Annual
Bonus that would otherwise have been payable for the year in which Executive died based on a
percentage of the number of days Executive worked for the Company during the applicable
calendar year. Payment of the portion of Executive’s Annual Bonus shall be made at the time
made to other participants in the Annual Bonus plan, but in no event later than the Annual
Bonus Payment Date.
(b) Disability. In the event that the Board reasonably determines in good faith
that Executive is unable, because of illness, incapacity or injury which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to Executive or Executive’s legal representative (such agreement as to
acceptability not to be withheld unreasonably), to perform the essential functions of his
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employment with the Company, even with reasonable accommodation that does not impose an
undue hardship on the Company, for more than twelve (12) weeks in any rolling one-year
period (“Disability”), unless a longer period is required by federal or state law, in which
case that longer period shall apply, the Board shall have the right to terminate Executive’s
employment, and the Company shall not be obligated to make any further payments to Executive
hereunder, except payment of Accrued Obligations and a pro rata portion of Executive’s
Annual Bonus that would otherwise have been payable for the year in which Executive is
terminated due to Disability based on a percentage of the number of days Executive worked
for the Company during the applicable calendar year. The Board reserves the right, in good
faith, to make a reasonable determination of Disability under this Agreement based on
information supplied by the physician selected as provided herein. Payment of the portion
of Executive’s Annual Bonus due under this Section 8(b) shall be made at the time made to
other participants in the Annual Bonus plan, but in no event later than the Annual Bonus
Payment Date. Executive expressly agrees that the Company shall have the right to
permanently replace Executive in the event he is terminated due to a Disability.
(c) Termination for Cause. The Board may terminate Executive’s employment at any
time immediately upon notice to Executive for “Cause.”
(i) For purposes of this Agreement, “Cause” shall mean any of the following
occurring during Executive’s employment by the Company (except with respect to
clause (e) below): (a) personal dishonesty by Executive involving Company business,
or breach of Executive’s fiduciary duty to Company; (b) indictment or conviction of
a felony or other crime involving moral turpitude or dishonesty; (c) Executive’s
willful refusal to comply with the lawful requests made of Executive by the Board
reasonably related to his employment by the Company and the performance of his
duties with respect thereto (but which shall not include a request to waive or amend
any portion of this Agreement or terminate this Agreement or to consent to an action
that would result in Executive’s loss of a right under this Agreement); (d) material
violation of the Company’s policies, after written notice to Executive and an
opportunity to be heard by the Board and his failure to fully cure such violations
within a reasonable period of time of not less than thirty (30) days after such
hearing; and (e) a material breach by Executive of any material provision of this
Agreement after written notice to Executive and an opportunity to be heard by the
Board and his failure to fully cure such breach within a reasonable period of time
of not less than thirty (30) days after such hearing.
(ii) In the event that the Board terminates Executive’s employment for Cause, the
Company shall not be obligated to make any further payments to Executive hereunder,
except payment of Accrued Obligations.
(d) Termination Without Cause.
(i) By Executive. Notwithstanding any other provision of this Agreement,
Executive may voluntarily resign from his employment with the Company at any
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time, and for any reason or no reason, with or without cause, Upon the effective
date of such resignation (other than a resignation for Good Reason), the Company
shall not be obligated to make any further payments to Executive hereunder, except
Accrued Obligations.
(ii) By Company. Notwithstanding any other provision in this Agreement, the
Board (at its sole discretion) shall have the right to terminate Executive’s
employment at any time, for any reason or no reason, immediately upon notice to
Executive. If the Board terminates Executive’s employment pursuant to this Section
8(d)(ii), the Company shall pay to Executive Accrued Obligations. In addition, if
the Board terminates Executive’s employment pursuant to this Section 8(d)(ii) or if
Executive resigns pursuant to Section 8(e), subject to Executive promptly executing
(and not revoking) a general release of all claims arising out of his employment in
a form that is acceptable to the Company within 21 days of Executive’s termination
(or such other longer period as may be required by applicable law), the Company
shall pay the Executive one times his Salary at the annualized rate in effect on the
date of his termination (the “Severance Payment”). The Company shall pay the
Severance Payment in substantially equal installments in accordance with the
Company’s standard payroll practices over a period of twelve consecutive months,
with the first installment payable in the month following the month in which
Executive’s Separation from Service (as defined below) occurs. (For purposes of
clarity, each such installment shall equal the applicable fraction of the aggregate
Severance Payment. For example, if such installments were to be made on a monthly
basis, each installment would equal one-twelfth (1/12th) of the Severance Payment.)
Executive’s right to receive and retain any of the Severance Payment (as a result of
a termination by either the Company without Cause or by Executive for Good Reason)
is contingent upon Executive’s compliance with Executive’s continuing obligations to
the Company under the terms of this Agreement and the Proprietary Information and
Invention Assignment Agreement (as defined below), In the event of termination by
the Company without Cause pursuant to this Section 8(d)(ii), Executive shall have no
duty to mitigate damages.
(e) Executive Resignation for Good Reason. Executive may also resign from his
employment for Good Reason (as defined below). In such event, the Company shall pay
Executive the same Severance Payment specified in Section 8(d)(ii) herein in connection with
a termination without Cause by the Company. In the event of termination by the Executive
for Good Reason pursuant to this Section 8(e), Executive shall have no duty to mitigate
damages.
Resigning with “Good Reason” means Executive’s resignation from employment with the Company within
90 days after any of the following without Executive’s prior written consent: (i) the Company’s
failure to pay Executive any earned Salary or Annual Bonus or other bonus or payment that has
become due and payable, provided that the Company receives written notice from Executive of the
deficient payment and has been given 30 days to cure; or (ii) prior to a Change in Control, removal
of Executive as Senior Vice President, Marketing of the Company or a material reduction in his
responsibilities, authority or status as such; or (iii) following a Change
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in Control, removal of Executive as Senior Vice President, Marketing of the Company or a division
or principal business unit of the acquiring company or a material reduction in his
responsibilities, authority or status as such; or (iv) a reduction in Executive’s Salary by more
than 10% except in connection with a Company cost-reduction program applied to all executive
officers; or (v) a relocation of the Company’s principal executive offices by more than fifty (50)
miles from the current location in Salt Lake City, Utah; or (vi) any material breach by the Company
of a material provision of this Agreement, which the Board fails to cure within thirty (30) days of
receiving written notice from Executive.
| 9. | SECTION 409A. |
(a) For purposes of this Agreement, a “Separation from Service” occurs when Executive dies,
retires or otherwise has a termination of employment with the Company that constitutes a
“separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1),
without regard to the optional alternative definitions available thereunder.
(b) If Executive is a “specified employee” within the meaning of Treasury Regulation Section
1.409A-1(i) as of the date of Executive’s Separation from Service, Executive shall not be
entitled to any payment or benefit pursuant to clause (ii) of Section 8(d)(2) or Section
8(e) until the earlier of (i) the date which is six (6) months after his Separation from
Service for any reason other than death, or (ii) the date of Executive’s death. The
provisions of this paragraph shall only apply if, and to the extent, required to avoid the
imputation of any tax, penalty or interest pursuant to Section 409A. Any amounts otherwise
payable to Executive upon or in the six (6) month period following Executive’s Separation
from Service that are not so paid by reason of this Section 9(b) shall be paid (without
interest) as soon as practicable (and in all events within thirty (30) days) after the date
that is six (6) months after Executive’s Separation from Service (or, if earlier, as soon as
practicable, and in all events within thirty (30) days, after the date of Executive’s
death).
(c) To the extent that any reimbursement pursuant to this Agreement is taxable to Executive,
Executive shall provide the Company with documentation of the related expenses promptly so
as to facilitate the timing of the reimbursement payment contemplated by this paragraph, and
any reimbursement payment due to Executive pursuant to such provision shall be paid to
Executive on or before the last day of Executive’s taxable year following the taxable year
in which the related expense was incurred. Such reimbursement obligations pursuant to this
Agreement are not subject to liquidation or exchange for another benefit and the amount of
such benefits that Executive receives in one taxable year shall not affect the amount of
such benefits that Executive receives in any other taxable year.
(d) It is intended that any amounts payable under this Agreement and the Company’s and
Executives exercise of authority or discretion hereunder shall comply with and avoid the
imputation of any tax, penalty or interest under Section 409A. This Agreement shall be
construed and interpreted consistent with that intent.
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10. NONSOLICITATION/NONDISPARAGEMENT. In the event of the termination of Executive’s
employment for any reason, Executive shall not, for a period of twelve (12) months, directly or
indirectly:
(a) solicit, induce or encourage any employee of the Company or any of its affiliates or
subsidiaries to terminate their employment with the Company or any of its affiliates or
subsidiaries;
(b) make any derogatory public statement concerning the financial performance, products,
services, the Board or management personnel of the Company or any of its affiliates or
subsidiaries, or Executive’s employment; or
(c) use or disclose the Company’s Confidential Information to induce, attempt to induce or
knowingly encourage any Customer of the Company or any of its affiliates or subsidiaries to
divert any business or income from the Company or any of its affiliates or subsidiaries, or
to stop or alter the manner in which they are then doing business with the Company or any of
its affiliates or subsidiaries.
The term “Customer” shall mean any individual or business firm that is, or within the prior twelve
(12) months was, a customer or client of the Company, whether or not such business was actively
solicited by Executive on behalf of the Company or any of its affiliates or subsidiaries during
Executive’s employment. Nothing in Section 10(b) shall prohibit Executive from providing truthful
testimony in any legal, administrative or regulatory proceeding and Executive may at all times
respond truthfully to a lawfully-issued subpoena, court order or governmental inquiry or as
otherwise may be required by law, provided, however, that upon receiving such lawfully-issued
subpoena or court order, Executive shall promptly provide reasonable written notice to Company and
cooperate with the Company to the extent reasonably necessary to protect the confidentiality of any
proprietary or trade secret information of the Company or any of its affiliates or subsidiaries,
and the privacy rights of any employee or director.
11. NONCOMPETIT1ON. During the term of this Agreement, Executive shall not accept or
engage, directly or indirectly, any work, consulting, or other services, for remuneration of any
kind for any other business entity engaged in the Covered Business, without prior written
approval by the Board. Nothing in this Agreement will prevent Executive from: (i) accepting
speaking or presentation engagements in exchange for honoraria; (ii) serving on advisory boards
that do not compete with the Covered Business of the Company (or any of its subsidiaries or
affiliates) or boards of trade associations or boards of charitable organizations so long as such
service does not unduly interfere with the performance of
Executive’s duties to the Company and provided that Executive provides prior written notice to the Board; or (iii) from making or
owning, directly or indirectly, any passive investment in any other business or entity that does
not compete with the Covered Business of the Company. For purposes of this Agreement, the phrase
“Covered Business” shall mean the business conducted or demonstrably anticipated to be conducted as
of the date of any such action by the Company (and its subsidiaries and affiliates). The phrase
“engage, directly or indirectly” means engaging or having an interest in, directly or indirectly,
as owner, partner, participant of a joint venture, trustee, proprietor, shareholder, member,
manager, director, officer, employee, independent contractor, capital investor, lender, consultant,
advisor or similar capacity, or by lending or allowing his name or reputation to be
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used in connection with, or otherwise participating in or allowing his skill, knowledge or
experience to be used in connection with, the operation, management or control of a business or
enterprise engaged in any aspect of the Covered Business, or being connected with or having any
financial interest in any business or enterprise engaged in the Covered Business, except for the
purposes of performing services on behalf of the Company or any of its subsidiaries or affiliates
pursuant to this Agreement.
12. PROPRIETARY INFORMATION AND INVENTION ASSIGNMENT AGREEMENT. During the term of this
Agreement and at all relevant times thereafter, and as a condition to the receipt of any severance
benefits hereunder, Executive agrees to abide and be bound by that certain proprietary information
and invention assignment agreement between the Company and Executive (the “Proprietary Information
and Invention Assignment Agreement”).
13. INJUNCTIVE RELIEF. Executive agrees that it would be difficult or impossible to
measure the damage to the Company from any breach by Executive of the covenants set forth in
Sections 10, 11 or 12 of this Agreement; that damages to the Company for any such injury would
therefore be an inadequate remedy for any such breach, and that such breach would cause irreparable
harm to the Company. Executive agrees that in the event of a breach of the terms of any such
Section, upon satisfaction of the applicable legal requirements and prerequisites, the Company
shall be entitled, in addition to and without limitation upon all other remedies the Company may
have, to injunctive or other appropriate equitable relief to restrain any such breach.
14. NOTICES. All notices, requests, claims, demands and other communications hereunder
shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt)
by delivery in person, by facsimile or by registered or certified mail (postage prepaid, return
receipt requested) to each other party as follows:
if to the Company to:
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Fusion Multisystems, Inc. | |
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with copies to:
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O’Melveny & ▇▇▇▇▇ LLP | |
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| ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | ||
| Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ | ||
| Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. | ||
if to the Executive or WCV to:
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or to such other address as the person to whom notice is given may have previously furnished to the
other in writing in the manner set forth above.
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15. WAIVER OF BREACH. The waiver of any breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach. Each and every right, remedy and
power hereby granted to any party or allowed it by law shall be cumulative and not exclusive of any
other.
16. SEVERABILITY. If any of the provisions of this Agreement or the application thereof to
any party under any circumstances is adjudicated to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision of this Agreement or the application thereof.
17. ENTIRE AGREEMENT. This Agreement, along with any related documents and agreement
(including the Proprietary Information and Invention Assignment Agreement) and referenced herein,
constitutes the entire Agreement between the parties with respect to the subject matter hereof and
supersedes and completely and irrevocably terminates any and all other previous or contemporaneous
communications, representations, understandings, agreements, negotiations and discussions, either
oral or written, between the parties with respect to the subject matter hereof. Without limiting
the generality of the foregoing, the parties expressly agree that this Agreement supersedes the
terms of (i) any offer letter that may have been in existence between the parties and (ii) the
Employment Agreement. The parties acknowledge and agree that there are no written or oral
agreements, understandings, or representations, directly or indirectly related to this Agreement or
the employment, compensation or benefits of Executive that are not set forth herein.
Notwithstanding anything herein to the contrary, nothing in this Agreement shall in any way
supersede, limit or affect any representation, warranty, covenant or term of the Proprietary
Information and Invention Assignment Agreement; provided that in the event of a conflict between
this Agreement and the Proprietary Information and Invention Assignment Agreement, this Agreement
shall govern. Except as set forth in Section 4 hereof, nothing herein shall affect in any way the
agreements entered into by Executive and WCV with the Company or any other person(s) with respect
to their ownership of the Shares or any other securities of the Company.
18. AMENDMENT OF AGREEMENT. This Agreement may be altered or amended in any of its
provisions only by the mutual written agreement of the parties hereto. This Agreement may not be
amended orally in any respect.
19. SUCCESSORS. The Agreement shall inure to the benefit of and be binding on the Company
and its successors and assigns, as well as Executive and his estate and WCV and its successors and
permitted assigns. Executive may not assign or delegate, in whole or in part, his duties or
obligations under this Agreement. This Agreement may be transferred and assigned by the Company to
any successor of the Company by acquisition, merger, reorganization, amalgamation, asset sale or
otherwise. Upon any assignment of this Agreement by the Company, all obligations of the Company
shall terminate, Executive shall become employed by the assignee in accordance with the terms of
this Agreement and the term “Company” as used in this Agreement shall include only such assignee.
20. RIGHTS CUMULATIVE. The Company’s rights under this Agreement are cumulative, and the
exercise of one right will not be deemed to preclude the exercise of any other rights.
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21. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument. Photographic copies of such signed counterparts may be used in lieu of the originals
for any purpose.
22. CONSTRUCTION. Each party has cooperated in the drafting and preparation of this
Agreement, and therefore, the Agreement shall not be construed against either party on the basis
that any particular party was the drafter.
23. VOLUNTARY COUNSEL. Each of Executive and WCV agrees and acknowledges that he or it has
read and understood this Agreement prior to signing it, has entered into this Agreement freely and
voluntarily, has been advised to seek legal counsel prior to entering into this Agreement and has
had ample opportunity to do so.
24. GOVERNING LAW. This Agreement shall be construed in accordance with, and governed in
all respects by, the internal laws of the State of Utah (without giving effect to principles of
conflicts of laws).
| 25. | ARBITRATION |
(a) In exchange for the benefits of the speedy, economical and impartial dispute resolution
procedure of arbitration, the Company and Executive, with the advice and consent of their
selected counsel, choose to forego their right to resolution of their disputes in a court of
law by a judge or jury, and instead elect to treat their disputes, if any, pursuant to the
Federal Arbitration Act and/or Utah Arbitration Act.
(b) Executive and the Company agree that any and all claims or controversies whatsoever
brought by Executive or the Company, arising out of or relating to this Agreement,
Executive’s employment with Company, or otherwise arising between Executive and Company,
will be settled by final and binding arbitration in Salt Lake City, Utah or such other
location as may be mutually agreed by parties in accordance with the Employment Arbitration
Rules and Procedures of Judicial Arbitration and Mediation Services, Inc. (“JAMS”) then in
effect. This includes all claims whether arising in tort or contract and whether arising
under statute or common law. Such claims may include, but are not limited to, those
relating to this Agreement, wrongful termination, retaliation, harassment, or any statutory
claims under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Fair Employment and Housing Act, the Age Discrimination in Employment Act, the Americans
with Disabilities Act, or similar Federal or state statutes. In addition, any claims
arising out of the public policy of Utah, any claims of wrongful termination, employment
discrimination, retaliation, or harassment of any kind, as well as any claim related to the
termination or non-renewal of Executive’s employment or this Agreement shall be arbitrated
under the terms of this Agreement. The obligation to arbitrate such claims will survive the
termination of Executive’s employment or this Agreement. To the extent permitted by law,
the hearing and all filings and other proceedings shall be treated in a private and
confidential manner by the arbitrator and all parties and representatives, and shall not be
disclosed except as necessary for any related judicial proceedings.
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(c) The arbitration will be conducted before an arbitrator to be mutually agreed upon by the
parties from JAMS’ panel of arbitrators. In the event that the parties are unable to
mutually agree upon the arbitrator, JAMS shall provide a slate of five arbitrators with
experience in employment law and each party shall have the opportunity to strike two names
and rank the remaining arbitrators in order of preference. JAMS shall then select the
highest ranked arbitrator to preside over the arbitration. If JAMS is unable to provide an
arbitrator who has experience in employment law, the parties may jointly or separately
petition the court for appointment of an arbitrator with such experience. The arbitrator
will have jurisdiction to determine the arbitrability of any claim. The arbitrator shall
have the authority to grant all monetary or equitable relief (including, without limitation,
injunctive relief, ancillary costs and fees, and punitive damages) available under state and
Federal law. Either party shall have the right to appeal any adverse rulings or judgments
to the JAMS Panel of Retired Appellate Court Justices or as otherwise required by Utah law
for enforcement of arbitration provisions covering the subject matter of the parties’
dispute. Judgment on any award rendered by the arbitrator may be entered and enforced by
any court having jurisdiction thereof. In addition to any other relief awarded, the
prevailing party in any arbitration or court action covered by this Agreement, as determined
by the arbitrator or court in a final judgment or decree, shall be entitled to recover
costs, expenses, and reasonable attorneys’ fees to the extent permitted by law.
(d) Notwithstanding the foregoing, the parties agree to participate in non-binding mediation
in Salt Lake City, Utah, except that either party may file any formal arbitration demand as
necessary to preserve their legal rights as well as any action for provisional injunctive
relief in any court of competent jurisdiction to prevent immediate and irreparable harm and
to ensure that the relief sought by the aggrieved party is not rendered ineffectual pending
the arbitration. The Company shall pay the fees of the mediator and any related
administrative fees or costs charged in connection with any mediation held pursuant to this
Section.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above
written.
| “Company” | ||||
| FUSION MULTISYSTEMS, INC., | ||||
| a Nevada corporation | ||||
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|||
| Chief Executive Officer | ||||
| “Executive” | ||||
| ▇▇▇▇ ▇▇▇▇▇ | ||||
| /s/ ▇▇▇▇ ▇▇▇▇▇ | ||||
| “WCV” | ||||
| WCV INVESTMENTS, LLC, | ||||
| a Nevada LLC | ||||
By: |
/s/ ▇▇▇▇ ▇▇▇▇▇ | |||
| Manager | ||||
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