This Employment Agreement (this “Agreement”) is entered into as of the th day of
( “Effective Date”) by and between (the
"Company") and (the "Executive").
R E C I T A L S:
WHEREAS, the Company desires to provide for the employment of Executive as its
Chief Executive Officer; and
WHEREAS, the Executive desires to be employed by the Company;
NOW, THEREFORE, in consideration of the mutual covenants and warranties contained
herein, the parties agree as follows:
A. Term. The term of this Agreement shall commence on the Effective Date and shall continue
through a period of months from the Effective Date, unless earlier terminated in
accordance with Section F (the "Term").
B. Employment. During the Term, the Company hereby initially employs Executive as its Chief
Executive Officer, and Executive hereby accepts such employment.
C. Duties and Responsibilities. Executive shall serve as its Chief Executive Officer, subject to
the supervision of the Board of Directors of the Company (the "Board"). In such position,
Executive shall have such duties and authority as are customarily exercised by a Chief Executive
Officer of a business corporation of similar size and stature and as shall be determined from time
to time by the Board or its designee reasonably related to the business of the Company and such
that will not limit or otherwise hamper Executive's ability to perform his duties (“Services”).
Executive shall devote his full time and energies to the business of the Company and
performance of the Services, it being understood and agreed that during the Term Executive shall
not: (i) be employed by any other party or sit on any other board of directors or (ii) engage in any
other business, profession or occupation for compensation or otherwise, which would conflict or
interfere with the rendition of Services either directly or indirectly, without the prior written
consent of the Company’s Board; provided, that nothing herein shall preclude Executive from
purchasing and owning (directly or indirectly) up to one percent (1%) of the capital stock or
other securities of any corporation or other entity whose stock or securities are traded on any
national or regional securities exchange or the national over-the-counter market. In addition, if
requested by the Board, Executive shall agree to serve on committees of the Board without
1. Base Compensation. During the Term, the Company shall pay Executive, as
compensation for services rendered under this Agreement, a base compensation ("Base
Compensation") of $ per year payable in accordance with the usual and
customary payroll practices of the Company.
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2. Start of Base Compensation. The Company and Executive agree that the start date for
the Executive’s earning of the Base Compensation will be the date of a close of a financing or
series of financings of the Company that raise in aggregate a minimum of three (3) million
dollars (the “Qualified Financing”).
3. Incentive Compensation. In addition to the foregoing Base Compensation, the
Executive shall be eligible to participate in the Company’s incentive compensation program at
such time as the Board decides to establish such a program. The Company and the Executive
agree that the maximum incentive compensation for the Executive during the first year of
employment shall not exceed 10% of the Base Compensation. The Company and the Executive
further agree that closing of a Series A financing of at least $ at a pre-money Company
valuation of at least $ M will result in the Company providing the Executive with the full
Incentive Compensation ($ ) if accomplished on or before the first anniversary
of the Effective Date.
4. Annual Review. The Board shall review Executive's performance on an annual basis
and make adjustments in Executive's Base Compensation and/or Incentive Compensation as the
Board finds appropriate.
5. Stock Purchase Agreement. The Company and Executive shall enter into a Stock
Purchase Agreement pursuant to which Executive will purchase shares of
restricted Common Stock of the Company, which by way of reference is equal to approximately
10% of the outstanding common equity of the Company as of the Effective Date, at a purchase
price of $0.001 per common share. The purchased stock shall be subject to repurchase rights by
the Company whereby the Company may, but will not be obliged to, purchase the shares back
from the Executive for $0.001 per share. The number of shares subjected to such repurchase
rights shall be reduced each month by 1/48th. In consideration for the delay in the start of
Executive’s Base Compensation (refer to paragraph D. 2) the reduction in the number of number
of shares subjected to such repurchase rights shall be reduced each month by 1/24th of the total
shares purchased by Executive during the period between the Effective Date and the closing of a
Qualified Financing. Executive understands and agrees that all shares purchased under the Stock
Purchase Agreement, whether or not subject to repurchase by the Company at $0.001 per share,
will also be subject to all other restrictions associated with the Company’s common stock.
6. Stock Options. The Company agrees to adopt a stock option plan upon the closing of a
Series A financing. If the Series A financing aggregates to at least $ , then, effective on
such closing, Executive will be granted a stock option for shares of common stock
which will vest over four years and have an exercise price equal to the then current fair market
value of the Company’s common stock (“First Option”). In addition, at such time as the
Company has completed two consecutive fiscal quarters of operations in which cumulative
revenues for the period are at an annual rate of $ million or more, the Company will
grant Executive a second option for shares of common stock which will vest over four
years and have an exercise price equal to the then current fair market value of the Company’s
common stock (“Second Option”). The First Option and Second Option shall be subject to all
restrictions set forth in the applicable stock option plan, stock option agreement, and related
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documents, and Executive shall be required to execute the Company’s stock option agreement in
order to receive the First Option and/or Second Option.
E. Expenses and Executive Benefits.
1. Ordinary Expenses. The Company shall reimburse Executive for his reasonable out-of-
pocket expenses incurred in connection with the business of the Company, subject to such
reasonable policies as the Board may establish from time to time. Executive agrees to maintain
records and written receipts as required by Company policy to substantiate reimbursable
2. Other Benefits. Executive shall be entitled to receive other benefits as the Company
generally makes available to its personnel such as paid time off, health insurance, 401(k), etc.,
under the same terms and conditions as afforded all other Company personnel.
3. Commuting Expenses: For a period the lesser of 24 months after the Effective Date or
for long as Executive’s commute exceeds fifty miles one way, the Company agrees to reimburse
Executive, up to a maximum of $ per week, for reasonable expenses incurred with
Executive’s commute to the Company’s place of business. Executive understands and agrees
that the Company is not obliged or expected to reimburse Executive for commuting expenses in
the period beyond 24 months after the Effective Date, regardless of the length of the Executive’s
F. At-Will Employment.
The employment of Executive shall be “at-will” at all times. The Company or Executive may
terminate Executive’s employment with the Company at any time, without any advance notice,
for any reason or no reason at all, notwithstanding anything to the contrary contained in or
arising from any statements, policies or practices of the Company relating to the employment,
discipline or termination of its employees. Following the termination of Executive’s
employment, the Company shall pay to Executive all compensation to which Executive is
entitled up through the date of termination. Thereafter, all obligations of the Company under this
Agreement shall cease other than those set forth in Section G.
G. Termination Obligations.
1. Termination By The Company For Cause or By Executive For Any Reason.
(a) If the Company terminates Executive's employment for Cause (as defined
below) or if Executive terminates employment and this Agreement for any reason, the
Company shall not have any further obligations to Executive other than those set forth in
(b) For purposes of this Agreement Cause shall mean:
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(i) Executive's death, adjudication as mentally incompetent, or mental or
physical disability preventing Executive from performing his duties under this
Agreement for a period of 90 consecutive days. Any question as to the existence
of the disabi