EMPLOYMENT CONTRACT FOR CHIEF TECHNOLOGY OFFICER
Aegis Assessments, Inc., a Delaware corporation ("Employer"), located
at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ("Employee"), in consideration of the mutual promises made herein, agree
as follows:
ARTICLE 1. TERM OF EMPLOYMENT
Specified Period
Section 1.01. Employer employs Employee and Employee accepts employment
with Employer for a period of three (3) years beginning on March 19, 2003 and
terminating on March 19, 2006. The first sixty (60) days of this Agreement shall
be designated the "Initial Term".
"Employment Term" Defined
Section 1.02. "Employment term" refers to the entire period of
employment of Employee by Employer, whether for the periods provided above, or
whether terminated earlier as hereinafter provided or extended by mutual
agreement between Employer and Employee.
ARTICLE 2. DUTIES AND OBLIGATIONS OF EMPLOYEE
General Duties
Section 2.01. Employee shall serve as the Chief Technology Officer
("CTO") of Employer. In his capacity as CTO of Employer, Employee shall do and
perform all services, acts, or things customarily performed by a Chief
Technology Officer to develop Employer's technologies, subject at all times to
the policies set by Employer's Board of Directors, and to the consent of the
Board when required by the terms of this contract.
The CTO will be responsible to the CEO for formulating a technical vision
and strategy for advancing the technology initiatives of the company. This
vision and strategy will leverage trends in technology and industry-best
practice and be responsive to the needs of the Employer's customers. The CTO
will have both an internal and external focus, serving as the point person for
identifying research and technology trends that lead to improvements in the
state of the Employer's technology initiatives. The CTO will:
o Support the CEO in defining a strategic vision for the engineering of
software-intensive systems.
o Translate the strategic vision into an aggressive, but achievable strategic
research and engineering plan for Employer.
o Lead the technical review of the Employer's research agenda.
o Manage the Independent Research and Development (IR&D) program.
o Serve as ombudsman to members of the technical staff.
o Represent Employer at conferences sponsored by professional societies and
Employer's sponsors.
o Articulate new technical areas for Employer's focus and help build the core
competencies required to lead the world in these areas (e.g., high embedded
real-time applications).
o Represent Employer at meetings with key funders to advocate for Employer's
technical vision, strategy, and plans.
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Matters Requiring Consent of Board of Directors
Section 2.02. Employee shall not, without specific approval of
Employer's Board of Directors, do or contract to do any of the following:
(1) Borrow on behalf of Employer.
(2) Permit any customer of Employer to become indebted to Employer.
(3) Purchase capital equipment for amounts in excess of the amounts
budgeted for expenditure by the Board of Directors.
(4) Sell any capital assets of Employer.
(5) Subject to the amounts budgeted for employee expenditures by the
CEO or the Board of Directors, Employee shall not terminate the services of any
employee or hire any employee who does not report directly to the CTO.
Devotion to Employer's Business
Section 2.03. (a) During the Initial Term, Employee shall consult with
the Board and the officers of Employer, at reasonable times, concerning any
issue of importance regarding the development and implementation of the
Employer's technologies. After the Initial Term, Employee shall become a
full-time employee of Employer. Employee shall devote the majority of his
productive time, ability, and attention to the business of Employer, and at all
times as much of his productive time, ability and attention as is reasonably
necessary to satisfy Employee's obligations pursuant to this agreement during
the term of this agreement.
(b) Provided Employee satisfies his obligations to Employer pursuant to
this agreement, Employee may engage in other business duties or pursuits, and
may directly or indirectly render services of a business, commercial, or
professional nature to other persons or organizations, whether for compensation
or otherwise, without the prior written consent of Employer's Board of
Directors; provided, however, that Employee must obtain the prior written
consent of Employer's Board of Directors before becoming an officer, director,
or principal shareholder of any business which competes with Employer, and such
consent may be withheld at the sole discretion of Employer's Board of Directors.
Moreover, the expenditure of reasonable amounts of time for educational,
charitable, or professional activities shall not be deemed a breach of this
agreement if those activities do not materially interfere with the services
required under this agreement and shall not require the prior written consent of
Employer's Board of Directors.
(c) This agreement shall not prohibit Employee from making passive
personal investments or conducting private business affairs if those activities
do not materially interfere with the services required under this agreement.
However, Employee shall not directly or indirectly acquire, hold, or retain any
interest in any business competing with or similar in nature to the business of
Employer without the prior written consent of Employer's Board of Directors.
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Competitive Activities
Section 2.04. (a) During the term of this contract Employee shall not,
directly or indirectly, either as an employee, employer, Employee, agent,
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity, engage or participate in any business
that is in competition in any manner whatsoever with the business of Employer.
(b) Employee agrees that during the term of this contract and for a
period of one year after termination of this agreement, Employee shall not
directly or indirectly solicit, hire, recruit, or encourage any other employee
of Employer to leave Employer.
Uniqueness of Employee's Services
Section 2.05. Employee represents and agrees that the services to be
performed under the terms of this contract are of a special, unique, unusual,
extraordinary, and intellectual character that gives them a peculiar value, the
loss of which cannot be reasonably or adequately compensated in damages in an
action at law. Employee therefore expressly agrees that Employer, in addition to
any other rights or remedies that Employer may possess, shall be entitled to
injunctive and other equitable relief to prevent or remedy a breach of this
contract by Employee.
New Developments
Section 2.06. Employee agrees that all designs, plans, reports,
specifications, drawings, inventions, processes, and other information or items
produced by Employee concerning the development and implementation of the
Employer's technologies will be assigned to the Employer as the sole and
exclusive property of the Employer and the Employer's assigns, nominees and
successors, as will any copyrights, patents or trademarks obtained by Employee
while performing services under this Agreement. On request and at the Employer's
expense, Employee agrees to help the Employer obtain patents and copyrights for
any new developments. This includes providing data, plans, specifications,
descriptions, documentation, and other information, as well as assisting the
Employer in completing any required application or registration.
Non-Disclosure of Proprietary and Confidential Information By Employee
Section 2.07. During the term of this Agreement, Employee will have
access to Corporation Proprietary Information (as used in this Section 2.08 of
this Agreement, the term "Corporation Proprietary Information" shall mean and
include, without limitation, any and all marketing and sales data, plans and
strategies, financial projections, client lists, prospective client lists,
promotional ideas, data concerning the Employer's services, designs, methods,
inventions, improvements, discoveries, designs whether or not patentable,
"know-how", training and sales techniques, and any other information of a
similar nature disclosed to Employee or otherwise made known to Employee as a
consequence of or through this Agreement during the term hereof. The term
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Corporation Proprietary Information shall not include any information that (i)
at the time of the disclosure or thereafter is or becomes generally available to
and known by the public, other than as a result of a disclosure by Employee or
any agent or representative of Employee in violation of this Agreement, or (ii)
was available to Employee on a non-confidential basis from a source other than
the Employer, or any of the Employer's officers, directors, employees, agents or
other representatives) or other information and data of a secret and proprietary
nature which the Employer desires to keep confidential. Employee (and any of his
affiliates, related entities, partners, agents and/or employees) agrees and
acknowledges that the Employer has exclusive proprietary rights to all
Corporation Proprietary Information, and Employee hereby assigns to the Employer
all rights that he might otherwise possess in any Corporation Proprietary
Information. Except as required in the performance of Employee's duties to the
Employer, Employee will not at any time during or after the term hereof,
directly or indirectly use, communicate, disclose, disseminate, lecture upon,
publish articles or otherwise put in the public domain, any Corporation
Proprietary Information. Employee agrees to deliver to the Employer any and all
copies of Corporation Proprietary Information in the possession or control of
Employee upon the expiration or termination of this Agreement, or at any other
time upon request by the Employer. The provisions of this section shall survive
the termination of this Agreement.
Trade Secrets
Section 2.08. (a) The parties acknowledge and agree that during the
term of this agreement and in the course of the discharge of his duties
hereunder, Employee shall have access to and become acquainted with financial,
personnel, sales, scientific, technical and other information regarding
formulas, patterns, compilations, programs, devices, methods, techniques,
operations, plans and processes that are owned by Employer, actually or
potentially used in the operation of Employer's business, or obtained from third
parties under an agreement of confidentiality, and that such information
constitutes Employer's "trade secrets."
(b) Employee specifically agrees that he shall not misuse,
misappropriate, or disclose in writing, orally or by electronic means, any trade
secrets, directly or indirectly, to any other person or use them in any way,
either during the term of this agreement or at any other time thereafter, except
as is required in the course of his employment.
(c) Employee acknowledges and agrees that the sale or unauthorized use
or disclosure in writing, orally or by electronic means, of any of Employer's
trade secrets obtained by Employee during the course of his employment under
this agreement, including information concerning Employer's actual or potential
work, services, or products, the facts that any such work, services, or products
are planned, under consideration, or in production, as well as any descriptions
thereof, constitute unfair competition. Employee promises and agrees not to
engage in any unfair competition with Employer, either during the term of this
agreement or at any other time thereafter.
(d) Employee further agrees that all files, records, documents,
drawings, specifications, equipment, software, and similar items whether
maintained in hard copy or on line relating to Employer's business, whether
prepared by Employee or others, are and shall remain exclusively the property of
Employer and that they shall be removed from the premises or, if kept on-line,
from the computer systems of Employer, only with the express prior written
consent of Employer's Board of Directors.
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ARTICLE 3. OBLIGATIONS OF EMPLOYER
General Description
Section 3.01. Employer shall provide Employee with the compensation,
incentives, benefits, and business expense reimbursement specified elsewhere in
this agreement.
Indemnification of Losses of Employee
Section 3.02. Employer shall indemnify Employee for all losses
sustained by Employee in direct consequence of the discharge of his duties on
Employer's behalf, except liability for loss, damage, or injury to persons or
property resulting from the negligence or misconduct of Employee.
ARTICLE 4. COMPENSATION OF EMPLOYEE
Section 4.01. For providing the services specified in this Agreement
during the Initial Term, Employee shall receive options to purchase 50,000
shares of Employer's common stock, with an exercise period which begins on March
30, 2003 and terminates on March 30, 2006, at an exercise price of $1.00 per
share of common stock.
As compensation for the services to be performed hereunder, for each
year of employment Employee shall receive a salary at the rate of $125,000.00
per annum, payable on the first and fifteenth calendar day of each month during
the employment term. Following the first year of employment and for the term of
this agreement, the salary shall be negotiated annually with the Board of
Directors but shall be no less than 110% of the previous year's salary.
Section 4.02. Employee shall receive options to purchase an additional
50,000 shares per quarter (up to 150,000 shares) of Employer's common stock, at
an exercise price of $1.00 and for the exercise period specified in Section 4.01
above, during the second, third and fourth quarters of the employment term,
provided Employee is still performing his duties hereunder at the time each such
quarter commences.
ARTICLE 5. EMPLOYEE BENEFITS
Annual Vacation
Section 5.01. Employee shall be entitled to 4 weeks vacation time each
year with full pay. Employee may be absent from his employment for vacation only
at such times as Employer's Chief Executive Officer shall determine from time to
time. Such determination shall not be unreasonably withheld. If Employee is
unable for any reason to take the total amount of authorized vacation time
during any year, he may, at his sole discretion, (i) accrue that time and add it
to vacation time for any following year, or (ii) receive a cash payment in an
amount equal to the amount of annual salary attributable to that period.
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Illness
Section 5.02. Employee shall be entitled to 10 days per year as sick
leave with full pay. Unused sick leave may be accumulated.
Medical Coverage
Section 5.03. Employer agrees to include Employee in the coverage of
any insurance coverage offered to its other officers, including but not limited
to medical, major medical, hospital, dental, and eye care insurance; provided,
however, that Employer shall not be obligated to carry or provide any insurance
to Employee whatsoever, and Employer does not currently provide any such
insurance.
ARTICLE 6. BUSINESS EXPENSES
Reimbursement of Other Business Expenses
Section 6.01. (a) Employer shall promptly reimburse Employee for all
other reasonable business expenses incurred by Employee within the predetermined
budget allocated to the Employee's discretion, management or control by Employer
in connection with the business of Employer.
(b) Each such expenditure shall be reimbursable only if it is of a
nature qualifying it as a proper deduction on the federal and state income tax
return of Employer.
(c) Each such expenditure shall be reimbursable only if Employee
furnishes to Employer adequate records and other documentary evidence required
by federal and state statutes and regulations issued by the appropriate taxing
authorities for the substantiation of each such expenditure as an income tax
deduction.
Repayment of Disallowed Expenses
Section 6.02. In the event that any expenses paid for Employee or any
reimbursement of expenses paid to Employee shall, on audit or other examination
of Employer's income tax returns, be determined not to be allowable deductions
from Employer's gross income, and in the further event that this determination
shall be acceded to by the Employer or made final by the appropriate federal or
state taxing authority or a final judgment of a court of competent jurisdiction,
and no appeal is taken from the judgment or the applicable period for filing
notice of appeal has expired, Employee shall repay to Employer the full amount
of the disallowed expenses.
ARTICLE 7. TERMINATION OF EMPLOYMENT
Termination for Cause
Section 7.01. (a) Employer reserves the right to terminate this
agreement if Employee willfully breaches or habitually neglects the duties which
he is required to perform under the terms of this agreement; or commits such
acts of dishonesty, fraud, misrepresentation or other acts of moral turpitude as
would prevent the effective performance of his duties. Employer agrees to
provide 10 days written notice of intent to terminate.
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(b) Employer may at its option terminate this agreement for the reasons
stated in this Section by giving written notice of termination to Employee
without prejudice to any other remedy to which Employer may be entitled either
at law, in equity, or under this agreement.
(c) The notice of termination required by this section shall specify
the ground for the termination and shall be supported by a statement of relevant
facts.
(d) Termination under this section shall be considered "for cause" for
the purposes of this agreement.
Termination Without Cause or For Good Reason
Section 7.02. (a) This Agreement shall be terminated upon the death of
Employee.
(b) Employer reserves the right to terminate this Agreement within one
month after Employee suffers any physical or mental disability that would
prevent the performance of his essential job duties under this Agreement, unless
reasonable accommodation can be made to allow Employee to continue working. Such
a termination shall be effected by giving 10 days' written notice of termination
to Employee.
(c) Termination under this section shall not be considered "for cause"
for the purposes of this Agreement.
(d) If Employer and Employee mutually agree to termination for good
reason through no fault of the Employee, Employer shall pay Employee the amount
of salary due for the balance of this contract.
ARTICLE 8. TERMINATION DURING INITIAL TERM
Section 8.01. At any time during the Initial Term of 60 days, the
Employer may terminate this Agreement without penalty, except that Employee
shall retain the 50,000 options specified in Section 4.01 if Employer terminates
this agreement pursuant to this Section 8.01.
Section 8.02. In the event that Employer cannot provide Employee with
the cash compensation specified in Article 4 of this Agreement after the end of
the Initial Term, Employee may terminate this Agreement and retain the 50,000
options specified in Section 4.01 of this Agreement, but will not be entitled to
any additional compensation. In the alternative, Employee may continue as a
consultant and earn an additional 50,000 options per quarter as specified in
Section 4.02 of this Agreement.
Effect of Merger, Transfer of Assets, or Dissolution
Section 8.03. (a) This agreement shall not be terminated by any
voluntary or involuntary dissolution of Employer resulting from either a merger
or consolidation in which Employer is not the consolidated or surviving
corporation, or a transfer of all or substantially all of the assets of
Employer.
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(b) In the event of any such merger or consolidation or transfer of
assets, Employer's rights, benefits, and obligations hereunder may only be
assigned to the surviving or resulting corporation or the transferee of
Employer's assets if Employee, in his sole discretion, agrees to such an
assignment in writing.
ARTICLE 9. GENERAL PROVISIONS
Notices
Section 9.01. Any notices to be given hereunder by either party to the
other shall be in writing and may be transmitted by personal delivery or by
mail, registered or certified, postage prepaid with return receipt requested.
Mailed notices shall be addressed to the parties at the addresses appearing in
the introductory paragraph of this agreement, but each party may change that
address by written notice in accordance with this section. Notices delivered
personally shall be deemed communicated as of the date of actual receipt; mailed
notices shall be deemed communicated as of the date of mailing.
Severability
Section 9.02. To the extent any provision of this Agreement shall be
determined to be unlawful or otherwise unenforceable, in whole or in part, such
determination shall not affect the validity of the remainder of this Agreement,
and this Agreement shall be reformed to the extent necessary to carry out its
provisions to the greatest extent possible. In the absence of such reformation,
such part of such provision shall be considered deleted from this Agreement and
the remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect. In furtherance and not in limitation of
the foregoing, should the duration or geographical extent of, or business
activities covered by any provision of this Agreement be in excess of that which
is valid and enforceable under applicable law, then such provision shall be
construed to cover only that duration, extent or activities which may validly
and enforceably be covered. To the extent any provision of this Agreement shall
be declared invalid or unenforceable for any reason by any Governmental or
Regulatory Authority in any jurisdiction, this Agreement (or provision thereof)
shall remain valid and enforceable in each other jurisdiction where it applies.
Both parties acknowledge the uncertainty of the law in this respect and
expressly stipulate that this Agreement shall be given the construction that
renders its provisions valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable law.
Arbitration
Section 9.03. (a) Any controversy between Employer and Employee
involving the construction or application of any of the terms, provisions, or
conditions of this agreement shall on the written request of either party served
on the other be submitted to arbitration. Arbitration shall comply with and be
governed by the provisions of the California Arbitration Act.
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(b) Employer and Employee shall each appoint one person to hear and
determine the dispute. If the two persons so appointed are unable to agree, then
those persons shall select a third impartial arbitrator whose decision shall be
final and conclusive upon both parties.
(c) The cost of arbitration shall be borne by the Employer or in such
proportions as the arbitrators decide.
Attorneys' Fees and Costs
Section 9.04. If any legal action is necessary to enforce or interpret
the terms of this agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs, and necessary disbursements in addition to
any other relief to which that party may be entitled. This provision shall be
construed as applicable to the entire contract.
Entire Agreement
Section 9.05. This agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of Employee by Employer and contains all of the covenants and
agreements between the parties with respect to that employment in any manner
whatsoever. Each party to this agreement acknowledges that no representation,
inducements, promises, or agreements, orally or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not embodied herein,
and that no other agreement, statement, or promise not contained in this
agreement shall be valid or binding on either party.
Modifications
Section 9.06. Any modification of this agreement will be effective only
if it is in writing and signed by the party to be charged.
Effect of Waiver
Section 9.07. The failure of either party to insist on strict
compliance with any of the terms, covenants, or conditions of this agreement by
the other party shall not be deemed a waiver of that term, covenant, or
condition, nor shall any waiver or relinquishment of any right or power at any
one time or times be deemed a waiver or relinquishment of that right or power
for all or any other times.
Partial Invalidity
Section 9.08. If any provision in this agreement is held by a court of
competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.
Law Governing Agreement
Section 9.09. This agreement shall be governed by and construed in
accordance with the laws of the State of California.
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Sums Due Deceased Employee
Section 9.10. If Employee dies prior to the expiration of the term of
his employment, any sums that may be due him from Employer under this agreement
as of the date of death shall be paid to Employee's executors, administrators,
heirs, personal representatives, successors, and assigns.
Executed on March 19, 2003, at Newport Beach, California.
EMPLOYER EMPLOYEE
AEGIS ASSESSMENTS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: President and Chief Executive Officer
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