Exhibit 10.3
 
[shsp_ex103000.jpg]
 
EMPLOYEE AGREEMENT
 
This Agreement (the “Agreement”) is made and entered into as of December 2, 2019
by SharpSpring Technologies, Inc., a Delaware corporation (the “Company”),
including its parents, affiliates, assignees, and successors, each of whom are
expressly authorized to enforce this Agreement, and who are referenced herein as
“the Company” and Michael Power, referenced herein as “you” or “your” or
“Employee”.
 
1. 
CONSIDERATION. You agree that this Agreement is entered into in consideration of
the mutual promises contained in this Agreement and other good and valuable
consideration, and in further consideration of your present employment or
association with the Company or your continued employment or association with
the Company. Your employment or association with the Company is at-will and may
be terminated at any time at the election of either party. This Agreement does
not guarantee your employment by or association with the Company for any
definite period of time.
 
2. 
REPRESENTATIONS AND WARRANTIES. You represent and warrant to the Company that
the following statements are true and correct and shall remain true and correct
at all times during your employment or association with the Company:
 
a.
All statements and representations contained in your application for employment
or association are true and correct; and
 
b.
This Agreement constitutes a legal, valid, and binding agreement and obligation
enforceable against you in accordance with its terms.
 
3. 
POSITION AND DUTIES. The Company agrees to employ you to act as its Chief
Financial Officer effective as of December 2, 2019. You shall be responsible for
leading the Company’s finance and accounting functions, including financial
reporting and analysis, and other duties as may be prescribed by the Company’s
Chief Executive Officer from time to time. You agree that you will serve the
Company faithfully and to the best of your ability during the term of
employment, under the direction of the Chief Executive Officer of the Company.
 
4. 
PLACE OF EMPLOYMENT. You shall perform your duties under this Employee Agreement
at 5001 Celebration Pointe Ave, Gainesville, FL, or the Company’s then-current
headquarters office.
 
5. 
COMPENSATION OF EMPLOYEE. For all services rendered, you shall initially receive
compensation as follows:
 
 
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Base Salary: The Company agrees to pay you at a rate of $250,000 per year, which
may be increased from time to time by the Board’s Compensation Committee, except
pursuant to across-the-board salary reductions affecting all other senior
executives of the Employer, may not be decreased. The Base Salary will be
payable on a semi-monthly basis, or on whatever basis SharpSpring may adopt in
the future, in accordance with the Company’s standard payroll practices
 
a.
Bonus: You will be eligible for participation in SharpSpring’s executive bonus
plan with a bonus opportunity of $70,000. The payout related to your bonus
opportunity will initially be based on the Company achieving specified revenue
and EBITDA performance targets as set by the Board of Directors, and may be
modified from time to time by the Board of Directors in their sole discretion.
The executive bonus is currently paid quarterly, but may be paid annually in the
future at the election of the board.
 
b.
Reimbursement of Moving Cost: In addition to your ongoing compensation, after
commencing your employment and relocating to the Gainesville, FL area,
SharpSpring will reimburse you for up to a cumulative total of $50,000 of direct
moving costs and up to six (6) months of temporary housing costs, in association
with your relocation to the Gainesville, FL area. Reimbursed moving costs shall
be refunded to the Company on a pro-rata basis if you choose to leave the
Company during your first year of employment, other than if you choose to leave
for Good Reason. Such moving costs shall not include real-estate brokerage fees.
Any reimbursements shall follow our standard expense reimbursement process,
which requires valid receipts for any expenses incurred and approval of expenses
by a supervisor. Reimbursements are subject to all tax withholdings and
deductions, as required by law. Any required withholdings and deductions are
your responsibility, and not reimbursable by the Company. For purposes hereof,
“Good Reason” shall be defined per Section 8, b. below.
 
c.
Equity: Subject to approval by the Company’s Board of Directors, you will be
granted Restricted Stock Units (“RSUs”), with the total quantity determined by
the fair value of 100,000 stock options as of your commencement date with
expected RSU count of approximately 50,000. (Fair value is determined using the
Black-Scholes model, which adheres to ASC 718. The RSUs will be subject to the
terms and conditions of the Company’s 2019 Equity Incentive Plan, as may be
amended, and the Restricted Stock Unit Agreement that you will sign in
connection with receiving the RSUs. The RSUs shall vest over four (4) years,
with 25% of the RSUs vesting on the one-year anniversary of the date of the
grant and the remaining 75% of the RSUs vesting on a monthly basis thereafter.
You will be considered for future stock and or option grants to the extent that
the Board of Directors considers those for other Company executives.
 
d.
Withholdings: All amounts due from the Company to the Employee hereunder shall
be paid to the Employee net of all taxes and other amounts which the Company is
required to withhold by law.
 
 
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6. 
REIMBURSEMENT FOR BUSINESS EXPENSES. Subject to the approval of the Company, the
Company shall promptly pay or reimburse You for all reasonable business expenses
incurred in performing Your duties and obligations under this Employee
Agreement, but only if You properly account for expenses in accordance with the
Company’s policies.
 
7. 
PAID TIME OFF AND BENEFITS. You shall be entitled to the same benefits, paid
time off and Company holidays offered by the Company to its senior
management. Nothing in this Employee Agreement shall prohibit the Company from
modifying or terminating any of its employee benefit plans in a manner that does
not discriminate between Employee and other Company senior management.
 
8. 
TERMINATION OF EMPLOYMENT. Employee’s employment hereunder shall automatically
terminate upon (i) his death; (ii) Employee voluntarily leaving the employ of
the Company; (iii) at the Company’s sole discretion, for any reason, with or
without cause.
 
a.
PAYMENT ON TERMINATION. In the event that Employee’s employment under this
agreement is terminated for any reason, Company shall promptly pay Employee any
amounts due to Employee under this agreement, including any salary accrued
through the date of termination, and reimbursement for business related expenses
during the period of Employee’s employment, providing that such expenses are
submitted in accordance with Company policies. In the event that you leave the
Company’s employment for Good Reason or if the Company terminates your
employment without Cause, you shall be entitled to receive severance in an
amount equal to one day of base salary for every completed work day of
employment with the Company, up to a maximum of six (6) months of base salary
and the Company will pay for or reimburse all of your premiums for continuing
your health care coverage and the coverage of your dependents who are covered at
the time of your termination or resignation, under the applicable provisions of
the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) for the 12
month severance period. Such severance shall be paid semi-monthly according to
the Company’s normal payroll process, and shall terminate immediately if you
become gainfully employed during the severance period.
 
b.
FOR PURPOSES HEREOF, “GOOD REASON”. means (i) a reduction in your Annual Base
Salary of more than five (5) percent, other than pursuant to an across-the-board
reduction in accordance with Section 5, (ii) a material diminution in your
duties or responsibilities inconsistent with your position, (iii) a change in
your principal office to a location more than fifty (50) miles from Gainesville,
Florida, provided such location is also more than fifty (50) miles from your
principal residence as of the date of relocation, or (iv) the failure of
Employer to obtain the assumption (by operation of law, the continuation of the
corporate existence of the Company, SharpSpring or otherwise) of this Agreement
or substitution of a substantially similar agreement by any successors in a
Change of Control, in each case without your prior written
consent; provided that you must deliver written notice of your resignation to
the Company within 30 days of your actual knowledge of any such event, the
Company must be provided at least 30 days during which it may remedy the
condition and you must terminate your employment within six (6) months of the
initial occurrence of Good Reason in order for such resignation to be with Good
Reason for any purpose hereunder.
 
 
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c.
FOR PURPOSES HEREOF, “CAUSE” means (i) the conviction or plea of guilty or no
contest for or indictment on a felony or a crime involving moral turpitude or
the commission of any other act or omission involving misappropriation,
embezzlement or fraud, which involves a material matter with respect to the
Company or any Subsidiary or any of their customers or suppliers;
(ii) substantial and repeated failure to perform duties of the office you hold
as reasonably directed by the CEO or Board after notice from the CEO or Board
and a reasonable opportunity to respond to such notice; (iii) gross negligence
or willful misconduct with respect to the Company or any Subsidiary that is or
could reasonably be expected to be harmful to the Company or any Subsidiary in
any material respect after notice from the CEO or Board and a reasonable
opportunity to respond to such notice.
 
d.
FOR THE PURPOSE HEREOF, “CHANGE IN CONTROL”. to the extent you have not already
vested in any Long-term Incentive Awards due to the Change in Control, (A) in
the case of unvested awards subject to time-based vesting, you will immediately
vest in, options shall become exercisable, or cash or shares will be settled or
distributed, representing 100% of any Unvested Awards (B) in the case of
Unvested Awards subject to performance-based vesting, you will vest in, and
options shall become exercisable, or cash or shares will be settled or
distributed, as provided in the applicable Long-term Incentive Award agreement
(“Change in Control Vesting”). With respect to (A) and (B) above, if acquirer
notifies you in writing that your services in the same role, title, and total
compensation is required for up to six months following announced change in
control then vesting will still occur but with a lockup period no longer than
six months from date of notice by acquirer. For purposes of this Agreement, a
“Change of Control” shall mean the occurrence of any of the following events:
(i) an acquisition of the Company by another entity by means of any transaction
or series of related transactions (including, without limitation, any
reorganization, merger or consolidation but excluding any merger effected
exclusively for the purpose of changing the domicile of the Company), or (ii) a
sale of all or substantially all of the assets of the Company (collectively, a
Merger), so long as in either case the Company’s stockholders of record
immediately prior to such Merger will, immediately after such Merger, hold less
than fifty percent (50%) of the voting power of the surviving or acquiring
entity.
 
9. 
BEST EFFORTS AND OUTSIDE ACTIVITIES. You shall devote all of the necessary
business time, attention, and energies, as well as your best talents and
abilities to the business of the Company in accordance with the Company’s
instructions and directions. You may engage to a limited extent in other
business activities unrelated to the Company so long as such activities do not
create a conflict of interest or otherwise interfere with the performance of
your duties and the terms and conditions of this Employee Agreement.
 
10. 
MAINTENANCE OF LIABILITY INSURANCE. So long as You shall serve as an executive
officer of the Company pursuant to this Employee Agreement, the Company shall
obtain and maintain in full force and effect a policy of director and officer
liability insurance of at least $5,000,000 from an established and reputable
insurer. In all policies of such insurance, Employee shall be named as an
insured in such manner as to provide Employee the same rights and benefits as
are accorded to the most favorably insured of the Company’s officers or
directors.
 
 
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11. 
INDEMNIFICATION. In addition to the insurance coverage described above and the
indemnification protection set forth in Article IX of the Company’s Bylaws, the
Company shall indemnify Employee to the fullest extent permitted by applicable
law if he is made, or threatened to be made, a party to an action or proceeding,
whether civil, criminal, administrative or investigative (each a “Proceeding”),
by reason of the fact that Employee is or was an officer, director, or employee
of the Company or any of its affiliates, against all “Expenses” (as defined
below) resulting from or related to such Proceeding, or any appeal thereof. Any
such indemnification pursuant to this section shall continue as to Employee even
if Employee has ceased to be an executive, officer, director or employee of the
Company and/or any of its affiliates, and shall inure to the benefit of
Employee’s heirs, executors and administrators. Expenses incurred by Employee in
connection with any indemnification-eligible Proceeding shall be paid by the
Company in advance upon request of Employee that the Company pay such Expenses,
(a) after receipt by the Company of a written request from Employee for such
advance, together with documentation reasonably acceptable to the Board, and (b)
subject to an undertaking by Employee to pay back any advanced amounts for which
it is later determined that Employee was not entitled to indemnification as
described herein. Employee shall be entitled to select his own counsel in
connection with any indemnification-eligible Proceeding. Notwithstanding the
foregoing provisions of this section to the contrary, the Company shall have no
obligation to indemnify Employee or advance Expenses to Employee (i) in
connection with any claim or proceeding between Employee and the Company (unless
approved by the Board), or (ii) if Employee’s actions or omissions giving rise
to his status as a party to a Proceeding involve intentional or willful
misconduct or malfeasance on the part of Employee in connection with the
performance of his job. For purposes of this section, the term “Expenses” means
any damages, losses, judgments, liabilities, fines, penalties, excise taxes,
settlements, costs, reasonable attorneys’ fees, accountants’ fees, expert fees,
and disbursements and costs of attorneys, experts and accountants.
 
12. 
RECORDS OWNERSHIP. You acknowledge, understand, and agree that all files,
records and documents, whether in hard copy, electronic or any other form,
generated or received by the Company or its employees, or concerning the Company
or its business, belong to and constitute the property of Company and that
Company is the records owner of all such files, records and documents.
Therefore, upon your separation from employment, all such files, records and
documents shall remain on the premises and in the possession of Company, and you
shall promptly return any and all such files, records and documents to Company
that you may then have, or at any time thereafter you discover in your
possession. You shall not retain any copies of such files, records and
documents.
 
13. 
INTANGIBLE PROPERTY OWNERSHIP. You hereby irrevocably assign and transfer, and
agree to assign and transfer, to the Company all of your rights, title and
interest in and to any and all inventions and works you create or modify
(including, but not limited to software or other works, designs, or the like)
for or on behalf of the Company. You hereby acknowledge and agree that such
works are within the scope of your employment or association, and that all
intellectual property rights, including copyright, inventions, designs, and
trade secrets, whether patentable or not, are the exclusive and sole worldwide
property of the Company. Copyrighted works developed or created by you and owned
by the Company include the right to copy, license, market, manufacture, publish,
distribute, create derivative works from the works created, mark as copyrighted
by the Company, and to authorize others to do some or all of the foregoing as
needed or desired by the Company to carry out its business purpose.
 
 
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You will not at any time during or after your employment or association with the
Company have or claim any right, title or interest in any trade name, trademark,
patent, copyright, work for hire, or other similar rights belonging to or used
by the Company. You shall not have or claim any right, title or interest in any
material or matter of any sort prepared for or used in connection with the
business or promotion of the Company, whatever your involvement with such
matters may have been, and whether procured, produced, prepared or published in
whole or in part by you. You further release and hereby assign all rights in any
and all intellectual property to the Company, and shall, at the request of the
Company, give evidence and testimony and execute any and all agreements or other
documents as needed to effect or memorialize any such transfer of rights without
encumbrance, and for the Company to carry out its business purpose. You hereby
irrevocably appoint the Company as your attorney-in-fact (with a power couple
with an interest) to execute any and all documents which may be necessary or
appropriate in the security of such rights, including but not limited to, any
copyright in your work.
 
You certify that all works pursuant to this Agreement are original works and are
not the property of others, and that any liability from or caused by you in this
regard is your sole responsibility. You shall hold harmless and indemnify the
Company from and against any and all claims, actions, losses, costs, or other
liabilities based on or arising out of claimed infringement by the works of any
copyright or other intellectual property rights of any third party, and you
agree to cooperate in the defense of the Company against any and all claims,
actions, losses, costs, or other liabilities based on or arising out of claimed
infringement or any other action by the works of any copyright or other
intellectual property rights of any third party at your expense.
 
You have attached hereto, as Exhibit A, a list detailing all inventions,
original works of authorship, developments, improvements, and trade secrets
which you made prior to the commencement of this Agreement (collectively
referred to as “Prior Inventions”), which belong solely to you or belong to you
jointly with another, and which are not assigned to the Company hereunder or, if
no such list is attach, you represent that there no such Prior Inventions.
 
14. 
TRADE SECRETS AND CONFIDENTIAL INFORMATION. You agree to keep confidential and
not disclose to others any Trade Secrets or Confidential and Proprietary
Information, during the term of this Agreement and all times thereafter, except
as required by law or as consented in writing by the Company’s President.
 
You agree that the Trade Secrets and Confidential and Proprietary Information
described herein are valuable information.
 
 
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Trade Secrets and Confidential and Proprietary Information includes all forms of
information whether in oral, written, graphic, magnetic or electronic form
without limitation. Trade Secrets and Confidential and Proprietary Information
means, without limitation, the Company’s client and prospective client names,
addresses, relationships, terms and information; suppliers’ names, addresses,
terms and information; financial information; business and/or marketing plans;
methods of operation; internal structure; financial information and practices;
products and services; inventions; systems; devices; methods; ideas, procedures;
client lists and files; fee schedules; test data; descriptions; drawings;
techniques; algorithms; programs; designs; formula; software; business
management and methods; planning methods; sales and marketing methods; valuable
confidential business and professional information; proprietary computer
software; management information; and all know-how, trade secrets, confidential
information and any other information developed by and belonging to the Company
which gives the Company a competitive advantage over others.
 
If you shall leave, separate or terminate from the Company, you will neither
take nor retain any file, record, document, Trade Secrets or Confidential and
Proprietary Information, whether a reproduction, duplication, copy or original,
of any kind or nature developed by, compiled by or belonging to the Company.
 
15. 
NO PRIOR COVENANT NOT TO COMPETE. You warrant and represent that except for this
Agreement and except as otherwise disclosed in writing to the Company, (a) you
are not presently subject to any contract or understanding that restricts in any
manner your ability to provide services to the Company; (b) you have performed
all duties and obligations that you may have under any contract or agreement
with a former employer (or other party) including but not limited to the return
of all confidential information; and (c) you are currently not in possession of
any confidential materials or property belonging to any former employer (or
other party). Further, you agree to defend, indemnify, and hold the Company
harmless from and against any demands, claims, obligations, causes of action,
diminution in the value of the Company, damages, liabilities, costs, expenses,
interest, and fees, which the Company may incur due to (a) any conflict between
your employment with Company and any prior employment or association, duty
contract, agreement, order or restrictive covenant, or (b) any misrepresentation
by you as to any facts which are the subject matter of any conflict or violation
of any prior contract, agreement, order or restrictive covenant on your part.
 
16. 
COVENANT NOT TO COMPETE. You acknowledge that you are familiar with restrictive
covenants of this nature, the covenant is a material inducement to this
Agreement and your employment, the Company will suffer irreparable injury if you
violate this restrictive covenant, and the covenant is fair and reasonable to
protect the Company’s trade secrets, confidential and proprietary information,
relationships with prospective and existing clients, goodwill, and/or other
legitimate business interests. You further agree that your work with the Company
has provided and will provide you extraordinary and specialized training,
knowledge and information over the Company’s techniques, methods, products and
systems; the Company’s valuable confidential proprietary and business
information which you would not otherwise acquire; and access to its substantial
relationships with present and prospective clients and substantial goodwill
associated with its name.
 
 
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The covenant is intended to protect the Company’s legitimate business interests
which include but are not limited to the extraordinary and specialized training
of its employees; valuable confidential and proprietary business and
professional information; substantial relationships with prospective and
existing clients; client good will associated with the Company’s ongoing
professional and business practice and trade name in the fields of business and
financial software and related professional activities throughout North America
and globally.
 
Accordingly, you agree that prior to your separation or termination from the
Company and for the later of one (1) year after your separation or termination
(with or without cause) or from the date of entry by a court of competent
jurisdiction enforcing these covenants, whichever is later (referenced herein as
“the restricted period): You shall not engage, directly or indirectly, as
principal, agent, advisor, stockholder, consultant, partner, independent
contractor, or employee or in any other manner in any business or activity which
is in competition with the Company or which may propose to go into competition
with the Company. And, during the restricted period, you shall not directly or
indirectly induce or attempt to induce (a) clients of the Company to do business
with any competitor of the Company, and/or (b) any of the officers, agents,
employees, or associates of the Company to leave the employment or association
of the Company.
 
Some of the businesses which are in competition with the Company or which may
propose to go into competition with the Company, and which are specifically
prohibited include but are not limited to: HubSpot, Marketo, Salesforce.com,
Act-On, Eloqua and Responsys (both part of Oracle), Constant Contact, iContact,
MailChimp, Infusionsoft, J2 Global (Campaigner), and Feathr. This list of
businesses is not intended to be an exclusive list.
 
 
Nothing herein shall prohibit you from purchasing or owning less than five
percent (5%) of the publicly traded securities of any corporation, provided that
such ownership represents a passive investment and that you are not a
controlling person of, or a member of a group that controls, such corporation.
 
17. 
REMEDIES FOR BREACH OF RESTRICTIVE COVENANTS. The Company is entitled to obtain
equitable relief, including specific performance by means of injunctions, as
well as monetary damages and any other available remedies. In the event a court
of competent jurisdiction determines these restrictive covenants are not
enforceable as written herein, the court will reform or modify the restrictive
covenants(s) to make it (them) reasonable and enforceable, and the court will
enforce the restrictive covenants(s) as so reformed or modified. Assignees and
successors of the Company are expressly authorized to enforce these restrictive
covenants. The restrictive covenants of this Agreement shall not be interpreted
to employ any rule of contract construction that requires construing a
restrictive covenant narrowly, against the restraint, or against the drafter of
this Agreement.
 
Further, you understand that any and all obligations of the Company to pay any
compensation to you for any reason shall cease and terminate upon your breach of
any of the obligations in this Employee Agreement.
 
 
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18. 
NOTIFICATION OF INTERESTED PARTIES. You agree that the Company may notify anyone
employing or engaging you to perform services or evidencing an intention to
employ you now or in the future as to the existence and provisions of this
Agreement. You shall, during the restricted period, (1) inform anyone employing
or engaging you or evidencing an intent to employ or engage you, of the
existence of the restrictive covenants in this Agreement and (2) notify the
Company of the name, address, and telephone number of anyone who employs or
engages you to perform services.
 
19. 
MEDIATION. If a dispute arises out of or related to the interpretation or
enforcement of this Agreement, you agree to try to settle the dispute in good
faith through mediation upon the Company’s request, before litigation or at any
time during litigation.
 
20. 
WAIVERS. The Company’s waiver of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach.
 
21. 
GOVERNING LAW, JURISDICTION AND VENUE. The Agreement shall be governed by the
laws of the State of Florida and applicable federal and local law, and
jurisdiction and venue for enforcement shall be in state circuit court in
Gainesville, Florida.
 
22. 
INDEPENDENT RESTRICTIVE COVENANTS AND SEVERABILITY. The provisions of this
Agreement are independent of and separate from each other and from any other
agreements. The breach, invalidity or unenforceability of any provision or part
of any provision in this Agreement or any other agreements shall not in any way
effect the validity or enforceability of any other provision or part of
provision of this Agreement. The existence of any claim or cause of action by
you against the Company shall not constitute a defense to the enforcement of
these provisions.
 
23. 
ENTIRE AGREEMENT. This Agreement comprises the entire agreement and
understanding by the parties regarding the topics contained herein; no
representations, promises, agreements, or understandings, written or oral,
relating hereto but not contained herein, shall be of any force or effect. This
Agreement may be amended only in writing and by mutual agreement of the parties.
 
24. 
ATTORNEYS’ FEES AND COSTS. If any litigation proceedings are bought arising out
of or related to the terms of this Agreement, the successful prevailing party
will be entitled to reimbursement for all reasonable costs, including reasonable
attorneys’ fees.
 
25. 
ACKNOWLEDGEMENT. Employee acknowledges that he has had the benefit of
independent professional counsel with respect to this Agreement and that the
Employee is not relying upon the Company, the Company’s attorneys or any person
on behalf of or retained by the Company for any advice or counsel with respect
to this Agreement.
 
26. 
NUMBER OF PAGES. This Agreement, including the signatures and excluding
Exhibits, is comprised of ten (10) pages.
  

/s/ Michael Power  
11/20/2019
 
Employee: Michael Power
Date
 
 
 
 
/s/ Rick Carlson
11/21/2019
 
Rick Carlson, CEO and President
Date
 

 

for SharpSpring Technologies, Inc.
 

 
 
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Exhibit A
 
 
NONE
 
 
 
 
 
 
 
 
 
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