Exhibit 10.3
STARVOX COMMUNICATIONS INC.
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
     This Amended and Restated Executive Employment Agreement (“Agreement”) is
entered into as of February 15, 2007 by and between Douglas S. Zorn
(“Executive”) and StarVox Communications Inc. (the “Company”).
     Whereas, the Company and Executive entered into an Executive Employment
Agreement, dated March 20, 2006 (the “Prior Agreement”), which set forth the
terms and conditions of the Executive’s employment by the Company;
     Whereas, the Board of Directors of the Company, at the time the Prior
Agreement was executed, was unable to come to an agreement as to appropriate
equity incentive benefits for the retention of Company’s management and
employees;
     Whereas, pursuant to the Prior Agreement, the Company agreed to grant (the
“Prior Grant”) Executive certain equity incentive benefits, and the Company was
unable to complete the Prior Grant due to the aforementioned disagreement by the
Board of Directors of the Company;
     Whereas, the Board of Directors of the Company has reached agreement with
regard to appropriate equity incentive benefits for the retention of the
Company’s management and employees;
     Whereas, the Company and the Executive desire to amend and restate the
Prior Agreement to reflect the mutually agreed upon modifications to the terms
and conditions of Executive’s employment by the Company, including but not
limited to the Prior Grant; and
     Whereas, this Agreement shall supersede all prior oral and written
agreements, arrangements, and understandings, including without limitation the
Prior Agreement and any prior versions of the Prior Agreement, and represents
the entire agreement of the parties relating to the terms and conditions of the
Executive’s employment by the Company;
     Now, Therefore, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties as follows:
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     1. Employment by the Company.
          1.1 Position. Subject to terms of this Agreement, the Company agrees
to employ Executive as its Chairman of the Board and President, and Executive
hereby accepts such employment. During the term of his employment with the
Company, Executive will devote his best efforts and substantially all of his
business time and attention to the business of the Company, except for vacation
periods and reasonable periods of illness or other incapacities permitted by the
Company’s general employment policies.
          1.2 Duties and Location. Executive shall perform all duties assigned
to Executive from time to time, consistent with the Bylaws of the Company and as
required by the Company’s Board of Directors (the “Board”). Executive will
report directly to the Board in this position. Executive shall perform his
employment services from the Company’s corporate headquarters, subject to
reasonable business travel.
          1.3 Policies and Procedures. The parties’ employment relationship
shall also be governed by the general employment policies and practices of the
Company, including those relating to protection of confidential information and
assignment of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company’s general employment policies or
practices, this Agreement shall control.
     2. Compensation.
          2.1 Salary. Executive shall receive for services to be rendered
hereunder an annualized base salary of $252,000, subject to required payroll
withholding and deductions, paid on the Company’s regular payroll schedule.
Executive’s base salary shall be reviewed annually and may be adjusted by the
Board.
          2.2 Discretionary Bonus. Executive will also be eligible to receive an
annual bonus of up to $48,000 (“Bonus”), payable subject to required
withholdings and deductions, based on the Company’s profitability and overall
performance, and Executive’s satisfactory performance of his job duties,
including his achievement of certain performances objectives mutually
established by Executive and the Board. The Board, in its sole discretion, will
determine whether Executive has earned a Bonus, and the amount of any such Bonus
earned. Executive shall be eligible to earn the Bonus in quarterly increments
(of up to $12,000 per quarter), payable within fifteen (15) business days after
the end of each quarter (the “Bonus Payment Date”). Executive shall be presumed
to have earned the full quarterly Bonus payment unless the Board determines,
prior to the Bonus Payment Date that a lesser or no Bonus payment has been
earned. The Board will advise Executive of any such determination prior to the
Bonus Payment Date. Executive must remain an active employee of the Company for
the entire quarter in order to receive a Bonus payment for that quarter.
          2.3 Standard Company Benefits. Executive shall be entitled to all
rights and benefits for which he is eligible under the terms and conditions of
the standard
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Company benefits and compensation practices which may be in effect from time to
time and provided by the Company to its employees generally.
          2.4 Equity Compensation. Subject to the approval of the Board,
Executive shall be granted an option to purchase 16,000,000 shares of Company
Common Stock (the “Option”), at an exercise price equal to the fair market value
of the Company’s Common Stock on the date of the grant as determined by the
Board, pursuant to the Company’s 2007 Stock Plan (the “Plan”). The Option shall
vest and become exercisable over a four (4) year period, with twenty-five
percent (25%) of the shares subject to the Option vesting and becoming
exercisable on the first year anniversary of March 20, 2006 (the “Vesting
Commencement Date”) and the remaining seventy-five percent (75%) of the shares
subject to the Option vesting and becoming exercisable in thirty-six (36) equal
monthly installments thereafter for as long as the Executive remains in
continuous employment service with the Company. The Option shall be governed by
the terms and conditions set forth in the Plan, and in a stock option grant
notice and agreement to be issued.
     3. Proprietary Information Obligations.
          3.1 Agreement. As a condition of employment, Executive agrees to abide
by the Proprietary Information and Inventions Agreement as executed and attached
hereto as Exhibit 1.
          3.2 Third Party Agreements And Information. Executive represents and
warrants that his employment with the Company will not conflict with any prior
employment or consulting agreement or other agreement with any third party and
that Executive will perform his duties to the Company without violating any such
agreement. Executive represents and warrants that Executive does not possess
confidential information arising out of prior employment, consulting, or other
third party relationships, which would be used in connection with Executive’s
employment by the Company, except as expressly authorized by that third party.
During Executive’s employment by the Company, Executive will use in the
performance of Executive’s duties only information which is generally known and
used by persons with training and experience comparable to Executive’s own,
common knowledge in the industry, otherwise legally in the public domain, or
obtained or developed by the Company or by Executive in the course of
Executive’s work for the Company.
     4. Outside Activities During Employment.
          4.1 Exclusive Employment. Except with the prior written consent of the
Board, Executive will not during the term of this Agreement undertake or engage
in any other employment, occupation or business enterprise, other than ones in
which Executive is a passive investor. Executive may engage in civic and
not-for-profit activities so long as such activities do not materially interfere
with the performance of his duties hereunder. Executive is permitted to
participate on outside Boards with the consent of the Board of Directors of
StarVox.
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          4.2 No Adverse Interests. Except as permitted by Section 4.3 below,
Executive agrees not to acquire, assume or participate in, directly or
indirectly, any position, investment or interest known by him to be adverse or
antagonistic to the Company, its business or prospects, financial or otherwise.
          4.3 Noncompetition. During the term of his employment with the
Company, except on behalf of the Company, Executive will not directly or
indirectly, whether as an officer, director, stockholder, partner, proprietor,
associate, representative, consultant, or in any capacity whatsoever engage in,
become financially interested in, be employed by or have any business connection
with any other person, corporation, firm, partnership or other entity whatsoever
which were known by him to compete directly with the Company, throughout the
world, in any line of business engaged in (or planned to be engaged in) by the
Company; provided, however, that anything above to the contrary notwithstanding,
he may own, as a passive investor, securities of any competitor corporation, so
long as his direct holdings in any one such corporation shall not in the
aggregate constitute more than one percent (1%) of the voting stock of such
corporation.
     5. Noninterference.
          While employed by the Company, and for two (2) years immediately
following the date Executive’s employment terminates (the “Termination Date”),
Executive agrees not to interfere with the business of the Company by:
(a) soliciting, attempting to solicit, inducing, or otherwise causing any
employee of the Company to terminate employment in order to become an employee,
consultant or independent contractor to or for any other person or entity; or
(b) directly or indirectly soliciting the business of any customer of the
Company which at the time of Executive’s employment termination, or during the
year immediately prior thereto, was listed on the Company’s customer list.
     6. Termination Of Employment.
          6.1 At-Will Relationship. Executive’s employment relationship is
at-will. Either Executive or the Company may terminate the employment
relationship at any time, with or without Cause or advance notice, subject to
the severance provisions set forth below.
          6.2 Severance Benefits. In the event Executive’s employment is
terminated by the Company without Cause or Executive resigns for Good Reason at
any time during the term of Employment, Executive shall be eligible to receive
the following severance benefits:
               (a) Cash Severance. Executive shall receive six (6) months of
Executive’s last base salary, less applicable withholdings and deductions, paid
(at the Company’s election) either in the form of continuing base salary
payments paid over a six (6) month period, or as a single, lump sum amount. For
purposes of this Agreement, the “Severance Period” shall mean the number of
months of base salary Executive is entitled to receive as severance under this
Section 6.
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               (b) Accelerated Vesting. As an additional severance benefit, if
the Executive is terminated under paragraph 6.4, the Company shall accelerate
the vesting of the Executive’s then outstanding options such that, as of the
Termination Date, Executive shall receive an additional six (6) months of
vesting on his then outstanding options. For all options vested at the time of
any termination, the Executive shall have six (6) months from the date of
Termination in which to exercise such vested options.
               (c) Preconditions. In order to receive any of the above-described
severance benefits, Executive must (i) sign and deliver to the Company a general
release of claims against the Company, in a form acceptable to the Company
within sixty (60) days after the Termination Date, and (ii) comply with his
continuing obligations under this Agreement.
               (d) Termination for Cause/Resignation Without Good Reason.
Executive shall not be eligible to receive any severance benefits in the event
his employment is terminated by the Company for Cause or by Executive without
Good Reason.
          6.3 Cause for Termination. “Cause” for termination of Executive’s
employment shall mean Executive’s: (i) commission of any felony or of any crime
involving dishonesty; (ii) participation in any fraud against the Company;
(iii) material breach of any of his obligations under this Agreement, the
Employment Proprietary Information and Inventions Agreement, or any other
agreement between Executive and the Company; (iv) intentional damage to any
property of the Company; and (iv) death or inability to perform the essential
functions of his job for a period of ninety (90) calendar days, or for at least
sixty-five (65) business days within a twelve (12)-month period provided that
the Employer shall act upon this clause only in compliance with the applicable
federal and state law, including the federal Americans with Disabilities Act.
          6.4 Resignation for Good Reason. Executive may voluntarily terminate
his employment for “Good Reason” by notifying the Company in writing, within ten
(10) days after the occurrence of one of the following events, that Executive
intends to terminate his employment for Good Reason in thirty (30) days: “Good
Reason” means the occurrence of any of the following events, conditions or
actions taken by the Company or any successor without Cause and without your
consent: (i) a change in your job title with the Company to a job title
involving a materially reduced level of responsibility (provided however, a
change in your job title without a material reduction in your level of
responsibility shall not constitute “Good Reason”), (ii) a reduction by the
Company in Executive’s annual base salary by greater than ten percent (10%),
except to the extent the base salaries of all other executive officers of the
Company are accordingly reduced or (iii) a relocation of your place of service
by more than 50 miles.
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     7. Cooperation with Company.
          7.1 Cooperation Obligation. During and after the term of Executive’s
employment, Executive will cooperate with the Company in responding to the
reasonable requests of the Company’s Chief Executive Officer, General Counsel or
other appropriate officer, in connection with any and all existing or future
litigation, arbitrations, mediations or investigations brought by or against the
Company, or its or their respective affiliates, agents, officers, directors or
employees, whether administrative, civil or criminal in nature, in which the
Company reasonably deems Executive’s cooperation necessary or desirable. In such
matters, Executive agrees to provide the Company with reasonable advice,
assistance and information, including offering and explaining evidence,
providing sworn statements, and participating in discovery and trial preparation
and testimony. Executive also agrees to promptly send the Company copies of all
correspondence (for example, but not limited to, subpoenas) received by
Executive in connection with any such legal proceedings, unless Executive is
expressly prohibited by law from so doing. The failure by Executive to cooperate
fully with the Company in accordance with this Section 7 will be a material
breach of the terms of this Agreement which will result in all commitments of
the Company to make additional payments to Executive under Section 6 becoming
null and void.
          7.2 Expenses and Fees. The Company will reimburse Executive for
reasonable out-of-pocket expenses incurred by Executive as a result of his
cooperation with the obligations described in Section 7.1 above, within thirty
(30) days of the presentation of appropriate documentation thereof, in
accordance with the Company’s standard reimbursement policies and procedures.
After termination of Executive’s employment, the Company will also pay Executive
a reasonable fee in the amount of $200 per hour for the time Executive devotes
to matters as requested by the Company under Section 7.1 (“the Fees”). The
Company will not deduct or withhold any amount from the Fees for taxes, social
security, or other payroll deductions, but will instead issue an IRS Form 1099
with respect to the Fees. Executive acknowledges that in cooperating in the
manner described in Section 7.1, he will be serving as an independent
contractor, not a Company employee, and he will be entirely responsible for the
payment of all income taxes and any other taxes due and owing as a result of the
payment of Fees. Executive hereby indemnifies the Company and its officers,
directors, agents, attorneys, employees, shareholders, subsidiaries, and
affiliates and holds them harmless from any liability for any taxes, penalties,
and interest that may be assessed by any taxing authority with respect to the
Fees, with the exception of the employer’s share of employment taxes
subsequently determined to be applicable, if any.
     8. Dispute Resolution. Executive and the Company agree that any and all
disputes, claims, or demands in any way arising out of or relating to the terms
of this Agreement, Executive’s employment relationship with the Company, or the
termination of that employment relationship for any reason, shall be resolved,
to the fullest extent permitted by law, by final, binding and confidential
arbitration in San Francisco, California conducted before a single neutral
arbitrator by JAMS, Inc. (“JAMS”) or its successor, under the then-applicable
JAMS rules. Executive and the Company
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acknowledge that by agreeing to this arbitration procedure, they are each
waiving the right to resolve any such dispute, claim or demand through a trial
by jury or judge or by administrative proceeding. The arbitrator shall: (a) have
the authority to compel adequate discovery for the resolution of the dispute and
to award such relief as would otherwise be available under applicable law in a
court proceeding; and (b) issue a written statement signed by the arbitrator
regarding the disposition of each claim and the relief, if any, awarded as to
each claim, the reasons for the award, and the arbitrator’s essential findings
and conclusions on which the award is based. The Company shall pay all JAMS’
arbitration fees. Nothing in this Section 8 shall prevent either party from
obtaining injunctive relief in court to prevent irreparable harm pending the
conclusion of any arbitration.
     9. General Provisions.
          9.1 Notices. Any notices provided hereunder must be in writing and
shall be deemed effective upon the earlier of personal delivery (including
personal delivery by fax) or the next day after sending by overnight courier, to
the Company at its primary office location and to Executive at his address as
listed on the Company payroll.
          9.2 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction to the extent possible in
keeping with the intent of the parties.
          9.3 Waiver. If either party should waive any breach of any provisions
of this Agreement, he or it shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement. Any waiver must be in writing signed by the waiving party to be
effective.
          9.4 Complete Agreement. This Agreement, including Exhibit 1,
constitutes the entire agreement between Executive and the Company and it is the
complete, final, and exclusive embodiment of their agreement with regard to this
subject matter. It is entered into without reliance on any promise or
representation other than those expressly contained herein, and it cannot be
modified or amended except in a writing signed by an officer of the Company.
          9.5 Counterparts. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.
          9.6 Headings. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
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          9.7 Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors, assigns, heirs, executors and administrators,
except that Executive may not assign any of his duties hereunder and he may not
assign any of his rights hereunder without the written consent of the Company,
which shall not be withheld unreasonably.
          9.8 Survival. Executive’s duties under the Proprietary Information and
Inventions Agreement, and Sections 3, 5, 7, and 8 shall survive termination of
his employment with the Company.
          9.9 Remedies. Executive acknowledges that a remedy at law for any
breach or threatened breach by him of the provisions of the Proprietary
Information and Inventions Agreement, and Sections 3, 5, 7 and 9 would be
inadequate, and he therefore agrees that the Company shall be entitled to
injunctive relief in case of any such breach or threatened breach, in addition
to any other remedies available to the Company.
          9.10 Choice of Law. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the law of the
State of California.
     In Witness Whereof, the parties have executed this Agreement on the day and
year first above written.

                  StarVox Communications Inc.    
 
           
 
  By:   /s/ Thomas Rowley
 
   
 
      Thomas Rowley    
 
      Chief Executive Officer    
 
           
 
  Date:   February 15, 2007     
 
     
 
   

Accepted and agreed this
15th day of February, 2007.
DOUGLAS S. ZORN

     
/s/ Douglass Zorn
 
   

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Exhibit 1
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT