EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”), by and between Landstar,
Inc. a Nevada corporation through its operating subsidiary, Data443 Risk
Mitigation, Inc., a North Carolina corporation (collectively, the “Company”),
and Steven C. Dawson (“Employee”) (collectively referred to as the “Parties”),
is entered into this 30th day of April 2019, effective as of 1st of May 2019
(the “Effective Date”).

 

WITNESSETH

 

WHEREAS, the Company is engaged in the business of providing data security,
archiving and privacy protections through its software-as-a-service offerings,
as well as any other activities that the Company undertakes while Employee is an
Employee of the Company (together, the “Business”); and

 

WHEREAS, the Company desires to employ Employee as Chief Financial Officer
(“CFO”), and Employee wishes to accept such employment; and

 

WHEREAS, the Board of Directors of the Company (the “Board”) has authorized the
Company to enter into this Agreement.

 

WHEREAS, Employee’s position will be a position of trust and responsibility with
access to Confidential Information, Trade Secrets, and information concerning
executives and customers of the Company; and

 

WHEREAS, the Trade Secrets and Confidential Information, and the relationship
between the Company and each of its executives and customers are valuable assets
of the Company and may not be used for any purpose other than the Business; and

 

WHEREAS, the Company and Employee have agreed upon the terms and conditions of
Employee’s employment with the Company and the Parties desire to express the
terms and conditions in this Agreement.

 

NOW THEREFORE, in consideration of the foregoing and the mutual promises and
covenants contained herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto agree that:

 

1. Employment and Duties.

 

A. The Company shall employ Employee as Chief Financial Officer of the Company,
in accordance with the terms and conditions set forth in this Agreement.
Employee accepts employment on the terms set forth herein.

 

 

   

 

B. Employee shall faithfully and to the best of his ability perform all duties
of the Company related to his position with the Company, including, but not
limited to, all duties set forth in this Agreement and/or in the Bylaws of the
Company related to the position that he holds, as well as all duties that are
reasonably assigned to him by the Board or its designees. Employee agrees to
devote his entire working time, attention, energy, and skills to the Company in
furtherance of the Company’s best interests, while so employed; provided that
Employee may, to the extent not otherwise prohibited by this Agreement, (A)
engage in such activities as permitted in writing by the Company and (B) devote
such amount of time as does not interfere or compete with the performance of the
Employee’s duties under this Agreement to any one or more of the following
activities: (i) investing the Employee’s personal assets in such manner as will
not require services to be rendered by the Employee in the operation of the
affairs of the companies in which investments are made; or (ii) engaging in
charitable and professional organization activities, including serving on the
Boards of Directors of charitable and professional organizations. Employee shall
comply with all reasonable Company policies, standards, rules, and regulations
(the “Company Policies”) and all applicable government laws, rules, and
regulations that are now or hereafter in effect. Employee acknowledges receipt
of copies of all written Company Policies that are in effect as of the date of
this Agreement.

 

2. Term of Employment. Unless earlier terminated as provided herein, the initial
term of this Agreement shall commence on the Effective Date and shall continue
until the one-year anniversary of the Effective Date (the “Initial Term”). After
the Initial Term, this Agreement shall automatically renew for successive
additional one-year terms on the same terms and conditions set forth herein,
unless: (i) earlier terminated or amended as provided herein or (ii) either
party gives written notice of non-renewal at least thirty (30) days prior to the
end of the Initial Term or any renewal term of this Agreement. The Initial Term
of this Agreement and all applicable renewals thereof are collectively referred
to herein as the “Term.”

 

3. Compensation and Benefits. During the Term, Employee shall receive
compensation and benefits for the services performed for the Company under this
Agreement as follows:

 

(a) Base salary.

 

  a. Initial Base Salary. Employee shall receive a base salary of One Hundred
Twenty Thousand and 00/100 Dollars ($120,000), payable in regular and equal
installments in accordance with the Company’s regular payroll schedule and
practices (“Base Salary”).         b. Base Salary Modification 1. Employee shall
receive a base salary of One Hundred Eighty Thousand and 00/100 Dollars
($180,000), payable in regular and equal installments in accordance with the
Company’s regular payroll schedule and practices, upon the SEC declaring
effective an S-1 to register shares of the Company’s common stock.         c.
Base Salary Modification 2. Employee shall receive a base salary of Two Hundred
Twenty Thousand and 00/100 Dollars ($220,000), payable in regular and equal
installments in accordance with the Company’s regular payroll schedule and
practices, upon the Company achieving an annualized revenue run rate of at least
Five Million and 00/100 Dollars ($5,000,000) measured at the time of an
acquisition closing, and/or entering into new customer contracts; or trailing
twelve (12) month gross booked revenues of Two Million Five Hundred Thousand and
00/100 Dollars ($2,500,000).

 

 

 

 

(b) Employee Benefits. Employee shall be entitled to receive those benefits that
are made available to the other similarly-situated executive employees of the
Company, including, but not limited to, life, medical, and disability insurance,
as well as retirement benefits (collectively, the “Employee Benefits”), in
accordance with the terms and conditions of the applicable plan documents,
provided that Employee meets the eligibility requirements thereof. The Company
reserves the right to reduce, eliminate, or change such Employee Benefits, in
its sole discretion, subject to any applicable legal and regulatory
requirements.

 

(c) Equity Compensation Awards. The Board has approved an incentive stock option
(“ISO”) granting Employee the right to purchase up to 26,315,789 shares of the
Company’s common stock under the Company’s Stock Incentive Plan (to be
determined and filed via S-8), at an option exercise price of $0.0019, equal to
the weighted-average closing price of the common stock for the previous five (5)
trading days as of April 15, 2019, contingent upon Employee’s execution of this
Agreement; provided that such option shall be granted as a non-ISO to the extent
it does not qualify for ISO treatment on the Effective Date. This ISO award
shall vest immediately upon the filing of the Company’s Form 10-Q for the period
ending March 31, 2019. The ISO award shall be contingent upon Employee’s
execution of a standard Employee Incentive Option Agreement in substantially the
form attached as Exhibit A to this Agreement and the ISO award shall in all
respects be subject to and governed by the provisions of the Company’s Stock
Incentive Plan and the Employee Incentive Option Agreement. The Board has also
approved a restricted stock award (“RSA”) of 23,684,211 shares of the Company’s
common stock under the Company’s Stock Incentive Plan, valued at $0.0019, equal
to the weighted-average closing price of the common stock for the previous five
(5) trading days as of April 15, 2019, contingent upon the Employee’s executive
of this Agreement. This RSA grant will vest immediately upon the filing of the
Company’s Form 10-Q for the period ending March 31, 2019. Employee shall also
receive an RSA grant every three months beginning at the time of the Agreement
valued at Forty-Five Thousand and 00/100 Dollars ($45,000) in shares equal to
the grant value divided by the weighted-average closing price of the common
stock for the previous five (5) trading days. These quarterly grants will vest
100% twelve (12) months from date of grant.

 

(d) Reimbursement of Expenses. The Company shall reimburse Employee for all
reasonable out-of-pocket expenses incurred by Employee that specifically and
directly relate to the performance by Employee of the services under this
Agreement, provided that Employee complies with the Company Policies for
reimbursement that are now or hereafter in effect. Each such expense shall be
submitted for reimbursement after they are incurred.

 

(e) Paid Time Off. On a calendar year basis, Employee will: (i) earn paid time
off (“PTO”) in accordance with the Company’s PTO policy. In accordance with the
Company Policies, all PTO that is earned by Employee shall be used or carried
over to the extent permitted and all paid personal leave that is received by
Employee shall be used or forfeited. However, no new PTO will be granted or
accrued after one year hereunder until Employee uses all earned PTO. Upon the
termination of the Employee’s employment by the Company, all earned and unused
PTO shall be paid in accordance with the terms of the Company Policies.

 

 

   

 

(f) Bonus. Employee shall be eligible to receive a semi-annual bonus (the
“Semi-annual Bonus”) tied to the success of the Company’s annual business plan.
The total of the Semi-annual Bonus payments will be targeted at 50% of the base
salary for the semi-annual period. All Semi-annual Bonus payments will be
subject to the terms, conditions, and eligibility requirements of the applicable
bonus plan as it may exist from time to time, which may provide that the
Semi-annual Bonus is payable in the sole and absolute discretion of the Company.
The Semi-annual Bonus shall be provided in a manner such that entitlement to and
payment of the Semi-annual Bonus is exempt from or compliant with Internal
Revenue Code Section 409A.

 

4. Withholding. The Company shall withhold from any payments or benefits under
this Agreement, including, but not limited to, any payments under Paragraphs
4(a), (c), (d), (e), and (f) of this Agreement, all federal, state, or local
taxes or other amounts, as may be required pursuant to applicable law,
government regulation, or ruling.

 

5. Termination. This Agreement and Employee’s employment by the Company shall or
may be terminated as follows:

 

(a) Expiration of the Term. This Agreement and Employee’s employment by the
Company shall terminate upon the expiration of the Term, if either party gives
written notice of non-renewal at least thirty (30) days prior to the end of the
Term.

 

(b) Death of Employee. This Agreement and Employee’s employment by the Company
shall terminate upon the death of Employee (“Death”).

 

(c) Discontinuance. The Company, immediately and without notice, may terminate
this Agreement and Employee’s employment by the Company upon the liquidation,
dissolution, or discontinuance of business by the Company in any manner or the
filing of any petition by or against the Company under any federal or state
bankruptcy or insolvency laws, provided that such petition is not dismissed
within sixty (60) days after filing (“Discontinuance”).

 

(d) Termination by the Company for Just Cause. The Company, immediately and
without notice, may terminate this Agreement and Employee’s employment by the
Company at any time for Just Cause. Termination for “Just Cause” shall include
termination for Employee’s: dishonesty; gross incompetence; willful misconduct;
breach of fiduciary duty owed to the Company, including any failure to disclose
a material conflict of interest; failure to perform his duties as required by
this Agreement or to achieve the reasonable objectives mutually agreed upon by
Employee and the Board or its designees; material violation of any law (other
than traffic violations or similar offenses); material failure to comply with
Company Policies, including policies prohibiting harassment, discrimination, and
retaliation, or any other reasonable directives of the Board or its designees;
conviction of a felony of any nature or of a misdemeanor involving moral
turpitude; use of illegal drugs or other illegal substance, or use of alcohol in
a manner that materially interferes with the performance of Employee’s duties
under this Agreement; adverse action or omission, without the consent or
approval of the Company or not in accordance with performing Employee’s duties
hereunder, that would be required to be disclosed pursuant to public securities
laws, even though such laws may not then apply to the Company, that would limit
the ability of the Company or any affiliated entity to sell securities under any
federal or state law, or that would disqualify the Company or any affiliated
entity from any exemption otherwise available to it; disability; or material
breach of any provision of this Agreement, including provisions concerning
confidentiality, proprietary information, and restrictive covenants. For
purposes of this subsection, the term “disability” means the inability of
Employee, because of the condition of his physical, mental, or emotional health,
to satisfactorily perform the duties of his employment hereunder, with or
without a reasonable accommodation, for a continuous three-month period.

 

 

   

 

(e) Termination by the Company Without Cause. The Company may terminate this
Agreement and Employee’s employment by the Company other than for “Just Cause,”
as described in Paragraph 6(d) above, and other than upon “Discontinuance,” as
described in Paragraph 6(c) above, at any time for any reason by providing
written notice to Employee, which termination shall be effective immediately
(“Without Cause”). For the avoidance of doubt, a notice by the Company that the
Term of this Agreement shall not be automatically renewed as provided in
Paragraph 2 of this Agreement shall constitute a termination by the Company
Without Cause.

 

(f) Termination by Employee for Good Reason. Employee may terminate this
Agreement and his employment by the Company for “Good Reason” (as defined
herein), provided that: (i) Employee provides the Company with written notice of
the Good Reason within ninety (90) days of the initial actions or inactions of
the Company giving rise to Good Reason; (ii) the Company does not cure such
conditions within sixty (60) days of such notice (the “Cure Period”); (iii)
Employee terminates his employment under this Agreement within thirty (30) days
of the expiration of the Cure Period; and (iv) the Company has not, prior to
Employee giving notice of Good Reason, provided Employee with notice of
termination or of non-renewal under this Agreement.

 

“Good Reason” shall mean the occurrence of any of the following events within
six (6) months following a Change of Control (as defined herein) and without
Employee’s consent: (i) a material diminishment in Employee’s responsibilities
from those he had immediately prior to the Change of Control; (ii) a material
reduction in Employee’s base salary; (iii) Employee’s place of employment is
relocated more than fifty (50) miles from the location where Employee worked
immediately prior to the Change of Control; or (iv) a material breach of this
Agreement by the Company.

 

 

   

 

A “Change of Control” shall be deemed to have occurred if: (i) any person or
group of persons (as defined in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934) together with its affiliates, excluding employee benefit
plans of the Company, becomes, directly or indirectly, the “beneficial owner”
(as defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934)
of securities or ownership interests of the Company, representing 51% or more of
the combined voting power of the Company’s then outstanding securities or
ownership interests; or (ii) during the then existing term of the Agreement, as
a result of a tender offer or exchange offer for the purchase of securities or
ownership interests of the Company (other than such an offer by the Company for
its own securities), or as a result of a proxy contest, merger, consolidation or
sale of assets, or as a result of any combination of the foregoing, individuals
who at the beginning of any year period during such term constitute the Company
Board, plus new directors whose election by the Company’s shareholders is
approved by a vote of at least two-thirds of the outstanding voting shares of
the Company, cease for any reason during such year period to constitute at least
two-thirds of the members of such Board; or (iii) the shareholders of the
Company approve a merger or consolidation of the Company with any other
corporation or entity regardless of which entity is the survivor, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or being converted into voting securities of the surviving
entity) at least 60% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation which entity continues to be the sole or majority owner of the
Company; or (iv) any event which the Company’s Board of Directors determines
should constitute a Change of Control. Notwithstanding anything in this
Agreement to the contrary, in no event shall any of the following occurrences
constitute a “Change of Control”: (i) the Company’s making any assignment for
the benefit of its creditors or consenting to the appointment of a receiver or
commencing any proceeding in bankruptcy or for dissolution, liquidation,
winding-up, composition or other relief under state or federal bankruptcy laws
or (ii) any proceeding in bankruptcy or for dissolution, liquidation,
winding-up, composition or other relief under state or federal bankruptcy laws
being commenced against the Company, or a receiver or trustee being appointed
for the Company or a substantial part of its property.

 

(g) Termination by Employee Without Good Reason. Employee may terminate this
Agreement and his employment by the Company for reasons other than Good Reason
thirty (30) days after written notice of Employee’s resignation is received by
the Company (“Resignation”).

 

(h) Obligations of the Company Upon Termination.

 

i. Upon the termination of this Agreement: (A) pursuant to the expiration of the
Term, under Paragraph 6(a) of this Agreement, following Employee’s notice of
non-renewal pursuant to Paragraph 2 of this Agreement; (B) pursuant to Paragraph
6(b) of this Agreement (“Death”); (C) by the Company pursuant to Paragraph 6(c)
of this Agreement (“Discontinuance”) or Paragraph 6(d) of this Agreement (“Just
Cause”); (D) by Employee pursuant to Paragraph 6(g) of this Agreement
(“Resignation”); or (E) for any reason other than those set forth in Paragraph
6(h)(ii); the Company shall have no further obligation hereunder other than the
payment of all compensation and other benefits payable to Employee through the
date of such termination.

 

ii. Upon the termination of this Agreement (and subject to Employee’s execution
of a release under Paragraph 6 of this Agreement and compliance with his
obligations under Paragraphs 8, 9, 10, and 11 of this Agreement): (A) by
Employee pursuant to Paragraph 6(f) of this Agreement (“Good Reason”); (B) by
the Company pursuant to Paragraph 6(e) of this Agreement (“Without Cause”)
within six (6) months following a Change of Control; or (C) pursuant to the
expiration of the Term, under Paragraph 5(a) of this Agreement, following the
Company’s notice of non-renewal pursuant to Paragraph 2 of this Agreement within
six (6) months following a Change of Control; the Company shall pay Employee an
amount equal to six (6) months of his then current base salary (less all
applicable deductions), payable over six consecutive months in equal installment
payments paid in accordance with the Company’s regular payroll schedule,
beginning on the first regular payroll date occurring on or after the date on
which the release of claims required by Paragraph 6 of this Agreement becomes
effective and non-revocable.

 

 

   

 

iii. Upon the termination of this Agreement (and subject to Employee’s execution
of a release under Paragraph 6 of this Agreement and compliance with his
obligations under Paragraphs 8, 9, 10, and 11 of this Agreement): (A) by the
Company pursuant to Paragraph 6(e) of this Agreement (“Without Cause”) not
occurring within six months following a Change of Control; or (B) pursuant to
the expiration of the Term, under Paragraph 5(a) of this Agreement, following
the Company’s notice of non-renewal pursuant to Paragraph 2 of this Agreement
and not within six months following a Change of Control; the Company shall pay
Employee an amount equal to six (6) months of his then current base salary (less
all applicable deductions), payable over six consecutive months in equal
installment payments paid in accordance with the Company’s regular payroll
schedule, beginning on the first regular payroll date occurring on or after the
date on which the release of claims required by Paragraph 7 of this Agreement
becomes effective and non-revocable.

 

iv. Notwithstanding the terms of the Company’s equity compensation plans and
applicable award agreements, upon the occurrence of a Change of Control or a
termination of this Agreement by the Company pursuant to Paragraph 6(e) of this
Agreement (“Without Cause”) not occurring within six months following a Change
of Control (and subject to Employee’s execution of a release under Paragraph 7
of this Agreement and compliance with his obligations under Paragraphs 8, 9, 10,
and 11 of this Agreement): (A) all of Employee’s outstanding unvested time-based
equity awards shall become fully vested and any restrictions thereon shall lapse
and (B) all of Employee’s outstanding unvested performance-based equity awards
shall be deemed achieved at target levels with respect to performance goals or
other vesting criteria.

 

v. Notwithstanding any provision in this Agreement to the contrary, any payment
conditioned upon the release required by Paragraph 7 shall be made, or commence,
as applicable, within ninety (90) days of the termination of Employee’s
employment. To the extent that any payment due under this Paragraph 6 is not
exempt from Section 409A, such amount shall be paid in a lump sum no later than
seventy-four (74) days following the Employee’s termination of employment.

 

6. Release of Claims. Notwithstanding any provision of this Agreement to the
contrary, the Company’s obligation to provide any severance payment under
Paragraph 5(h)(ii) or (iii) of this Agreement is conditioned upon Employee’s
execution of an enforceable release of any and all claims arising before the
date that he signs the release, in a form which is reasonable and which is
satisfactory to the Company (satisfaction of the Company is not to be
unreasonably withheld), and his compliance with the provisions of Paragraphs 8,
9, 10, and 11 of this Agreement. If Employee fails to execute such a release or
fails to comply with such terms of this Agreement, then the Company’s obligation
to make any payments to him ceases on the effective termination date. The
release of claims shall be provided to Employee within seven (7) days of the
termination of his employment, and Employee must execute it within the time
period specified in the release (which shall not be longer than forty-five (45)
days from the date upon which he receives it). Such release shall not be
effective until any applicable revocation period has expired.

 

 

   

 

7. Definitions. For purposes of this Agreement, the following terms shall have
the following meanings:

 

(a) “Confidential Information” shall mean: (i) any and all non-public or
otherwise confidential proprietary knowledge, material, or information of the
Company, including any and all knowledge, material, or information that is
designated as Confidential Information by the Company and any and all
confidential knowledge, material, or information that becomes generally known to
the public as a result of a disclosure by Employee, or any other person or
entity who is obligated to treat such knowledge, material, or information
confidentially, and (ii) any and all non-public or otherwise confidential
proprietary knowledge, material, or information of others who disclose that
knowledge, material, or information to the Company, including any and all
knowledge, material, or information designated as Confidential Information by
the Company, or those others and any and all confidential knowledge, material,
or information that becomes generally known to the public as a result of a
disclosure by Employee, or any other person or entity who is obligation to treat
such knowledge, material, or information confidentially. Confidential
Information includes, but is not limited to, the following types of knowledge,
material, or information (whether or not reduced to writing): trade secrets;
concepts; designs; discoveries; ideas; know-how; processes; techniques;
Inventions (as defined herein); drawings; specifications; models; data; software
in various stages of development; source and object code; documentation;
diagrams; flow charts; research; procedures; marketing devices, processes,
computer programs and related source code and object code, mask works, and
methods, together with any improvements thereon or thereto, and development
techniques, materials, plans, and information; business methods, procedures, and
policies; current and prospective customers names and lists and other
information related to current and prospective customers; prices, including
price lists, policies, and formulas; profit margins, data, and formulas;
financial information; a mask work and whether or not reduced to practice,
including, but derivative works made therefrom, and know-how, descriptions,
sketches, drawings, or other knowledge, manuals and methodologies; and employee
files and information.

 

(b) “Inventions” shall mean ideas, concepts, techniques, inventions,
discoveries, and works of authorship, whether or not patentable or protectable
by copyright or as information, or material related thereto.

 

(c) “Intellectual Property Rights” shall mean all patent, trademark, and
copyright rights, moral rights, rights of attribution or integrity, trade secret
rights, or other proprietary or intellectual property rights.

 

(d) “Competing Business” shall mean any corporation, partnership, person, or
other entity that is primarily engaged in researching, developing manufacturing,
marketing, distributing, or selling any product, service, or technology that is
competitive with any part of the Company’s business. For the avoidance of doubt,
any with less than 20% of its total revenue derived from these activities, is
not a Competing Business.

 

 

   

 

(e) “Company’s Business” shall mean the development, marketing, distribution, or
sale of, including research directed to, any product, service, or technology
data security industry. As of the date of this Agreement, Company’s Business
includes, but is not limited to: (i) marketing and distributing data security
and privacy applications, and (ii) developing and acquiring data security and
privacy software companies. Employee understands that during Employee’s
employment with the Company, the Company’s Business may expand or change, and
Employee agrees that any such expansions or changes shall expand or contract the
definition of the Company’s Business and Employee’s obligations under this
Agreement accordingly.

 

(f) “Territory” shall mean the following severable geographic areas: (i) within
a 100 mile radius of any location where the Employee performed services for the
Company for the two (2) years preceding Employee’s termination; and (ii) within
50 miles of any county where the Company sells or markets its products or
services.

 

8. Covenant Not to Compete. As a result of Employee’s employment by the Company:
(i) Employee will have access to trade secrets and Confidential Information of
the Company, including, but not limited to, valuable information about its
intellectual property, business operations and methods, and the persons with
which it does business in various locations throughout the world, that is not
generally known to or readily ascertainable by a Competing Business, (ii)
Employee will develop relationships with the Company’s customers and others with
which the Company does business, and these relationships are among the Company’s
most important assets, (iii) Employee will receive specialized knowledge of and
specialized training in the Company’s Business, and (iv) Employee will gain such
knowledge of the Company’s Business that, during the course of Employee’s
employment with the Company and for a period of one year following the
termination thereof, Employee could not perform services for a Competing
Business without inevitably disclosing the Company’s trade secrets and
Confidential Information to that Competing Business. Accordingly, Employee
agrees to the following:

 

(a) While employed by the Company, Employee will not, without the express
written consent of an authorized representative of the Company: (i) perform
services (as an employee, independent contractor, officer, director, or
otherwise) within the Territory for any Competing Business, (ii) engage in any
activities (or assist others to engage in any activities) within the Territory
that compete with the Company’s Business, (iii) own or beneficially own an
equity interest in a Competing Business, (iv) request, induce, or solicit (or
assist others to request, induce, or solicit) any customers, prospective
customers, or suppliers of the Company to curtail or cancel their business with
the Company, or to do business within the scope of the Company’s Business with a
Competing Business, (v) request, induce, or solicit (or assist others to
request, induce, or solicit) for the benefit of any Competing Business any
employee or independent contractor of the Company to terminate his or her
employment or independent contractor relationship with the Company, or (vi)
employ (or assist others to employ) for the benefit of any Competing Business
any person who has been employed by the Company within the last year of
Employee’s employment with the Company.

 

 

   

 

(b) For a period of one year following the termination of Employee’s employment
with the Company, Employee will not, without the express written consent of an
authorized representative of the Company: (i) perform services (as an employee,
independent contractor, officer, director, or otherwise), within the Territory
for any Competing Business, that are the same or similar to any services that
Employee performed for the Company or that otherwise utilize skills, knowledge,
and/or business contacts and relationships that Employee utilized while
providing services to the Company, (ii) engage in any activities (or assist
others to engage in any activities) within the Territory that compete with the
Company’s Business, (iii) own or beneficially own an equity interest in a
Competing Business, (iv) request, induce, or solicit (or assist others to
request, induce, or solicit) any customers, prospective customers, or suppliers
of the Company, which were customers, prospective customers, or suppliers of the
Company during the last year of Employee’s employment with the Company, to
curtail or cancel their business with the Company, or to do business within the
scope of the Company’s Business with a Competing Business, (v) request, induce,
or solicit (or assist others to request, induce, or solicit) any customers,
prospective customers, or suppliers of the Company with which Employee worked or
had business contact during the last year of Employee’s employment with the
Company to curtail or cancel their business with the Company, or to do business
within the scope of the Company’s Business with a Competing Business, (vi)
request, induce, or solicit (or assist others to request, induce, or solicit)
any employee or independent contractor of the Company to terminate his or her
employment or independent relationship with the Company, (vii) request, induce,
or solicit (or assist others to request, induce, or solicit) any person who has
been employed by the Company within the last year of Employee’s employment by
the Company or thereafter to be employed with a Competing Business, or (viii)
employ or engage as a contractor (or assist others to employ or engage as a
contractor) any person who has been employed by the Company within the last year
of Employee’s employment by the Company or thereafter. These obligations will
continue for the specified period regardless of whether the termination of
Employee’s employment was voluntary or involuntary or with or without cause, and
the specified period shall be tolled and shall not run during any time in which
Employee fails to abide by these obligations.

 

(c) As an exception to the above restrictions, Employee may own passive
investments in Competing Businesses, (including, but not limited to, indirect
investments through mutual funds), provided that the securities of the Competing
Business are publicly traded and Employee does not own or control more than two
percent of the outstanding voting rights or equity of the Competing Business.

 

9. Confidentiality.

 

(a) All documents or other records, paper or electronic, that, in any way,
constitute, contain, incorporate, or reflect any Confidential Information and
all proprietary rights therein, including Intellectual Property Rights, shall
belong exclusively to the Company, and Employee agrees to promptly deliver to
the Company, upon request or upon termination of Employee’s employment with the
Company, all copies of such materials and Confidential Information in Employee’s
possession, custody, or control, as well as all other property of the Company in
Employee’s possession, custody, or control. Likewise, Employee agrees to
promptly deliver to the Company, upon request or upon termination of Employee’s
employment with the Company, all copies of all documents or other records that,
in any way, constitute, contain, incorporate, or reflect any Confidential
Information of others that was disclosed or provided to Employee during the Term
that is in Employee’s possession, custody, or control.

 

 

   

 

(b) Employee agrees, during the Term and thereafter: (i) to hold in confidence
and treat with strict confidentiality all Confidential Information, (ii) not to
directly or indirectly reveal, report, publish, disclose, or transfer any
Confidential Information to any person or entity, and (iii) not to utilize any
Confidential Information for any purpose, other than in the course and scope of
Employees work for the Company. If Employee is required to disclose Confidential
Information pursuant to a court order or subpoena or such disclosure is
necessary to comply with applicable law, the undersigned shall: (i) promptly
notify the Company before any such disclosure is made and provide the Company
with reasonable and ample time within which to object to or oppose any such
disclosure, (ii) at the Company’s request and expense take all reasonably
necessary steps to defend against such disclosure, including defending against
the enforcement of the court order, subpoena, or other applicable law, and (iii)
permit the Company to participate with counsel of its choice in any related
proceedings.

 

10. Proprietary Information.

 

(a) Employee agrees that any Inventions created, conceived, developed, or
reduced to practice, in whole or in part, by Employee, either solely or in
conjunction with others, during or after the Term that arise in any way from the
use of or reliance on any Confidential Information or any of the Company’s
equipment, facilities, supplies, trade secret information, or time, that relate
to the Company’s Business or the Company’s demonstrably anticipated business,
research, or development, or that result from any work performed by Employee
for, on behalf of, or at the direction of the Company, shall belong exclusively
to the Company and shall be deemed part of the Confidential Information for
purposes of this Agreement, whether or not fixed in a tangible medium of
expression. Employee agrees that all rights, title, and interest in and to all
such Inventions, including, but not limited to, Intellectual Property Rights
shall vest and reside in, and shall be the exclusive property of, the Company.
Without limiting the foregoing, Employee agrees that any and all such Inventions
shall be deemed to be “works made for hire” and that the Company shall be deemed
the sole and exclusive owner thereof. In the event and to the extent that any
such Inventions are determined not to constitute “works made for hire” or that,
by operation of law or otherwise, any right, title, or interest in or to the
Inventions, including, but not limited to, any Intellectual Property Rights,
vests not in the Company, but, rather, in Employee, Employee hereby: (i)
irrevocably and unconditionally assigns and transfers to the Company all rights,
title, and interest in and to any such Inventions, including, but not limited
to, all Intellectual Property Rights and (ii) forever waives and agrees never to
assert all such rights, title, and interest.

 

(b) Employee agrees to promptly and fully disclose in writing to the Board of
Directors of the Company: (i) any Invention created, conceived, developed or
reduced to practice by Employee, either solely or in conjunction with others,
during the Term and (ii) any such Invention created, conceived, developed, or
reduced to practice after the Term that belongs exclusively to the Company
pursuant to the provisions of Paragraph 11(a) of this Agreement. For the
avoidance of doubt, in no event shall any provision of this Agreement, including
without limitation Paragraph 11(b), provide or be construed to provide Employee
or any other party with any license or other right or authority to create,
conceive, develop, or reduce to practice, after the Term, any Invention in which
the Company has an ownership interest, without the prior written consent of the
Company.

 

 

   

 

(c) Employee agrees to assist the Company, at the Company’s expense, either
during or subsequent to the Term, to obtain and enforce for the Company’s own
benefit, in any country, Intellectual Property Rights in connection with any and
all Inventions created, conceived, developed, or reduced to practice by Employee
(in whole or in part) that belong or have been assigned to the Company pursuant
to the provisions of Paragraph 11(a) of this Agreement. Upon request, either
during or subsequent to the Term, Employee will execute all applications,
assignments, instruments, and papers and perform all acts that the Company or
its counsel may reasonably deem necessary or desirable to obtain, maintain, or
enforce any Intellectual Property Rights in connection with any such Inventions
or to otherwise protect the interests of the Company in those Inventions.

 

11. Acknowledgements, Representations, and Warranties.

 

(a) Employee acknowledges that the Company has a strict policy against using
proprietary information belonging to any other person or entity without the
express permission of the owner of that information.

 

(b) Employee represents and warrants to the Company that Employee’s performance
under this Agreement and as an employee of the Company does not and will not
breach any non-competition, non-solicitation, or confidentiality agreement to
which Employee is a party. Employee represents and warrants to the Company that
Employee has not entered into, and agrees not to enter into, any agreement that
conflicts with or violates this Agreement.

 

(c) Employee represents and warrants to the Company that Employee has not
brought and shall not bring to the Company, or use in the performance of
Employee’s responsibilities for the Company, any materials or documents of a
former employer that are not generally available to the public or that did not
belong to Employee prior to Employee’s employment with the Company, unless
Employee has obtained written authorization from the former employer or other
owner for their possession and use and provided the Company with a copy thereof.

 

12. Indemnification. The Employee will be eligible for indemnification to the
fullest extent authorized under the Company’s Articles of Incorporation and
By-Laws (as applicable) and will be eligible for coverage under the Company’s
Director’s & Officer’s liability insurance policy as approved by the Board,
subject to the terms and conditions contained therein, if and when such a policy
is obtained.

 

13. Entire Agreement. This Agreement constitutes the entire agreement of the
parties with respect to the matters set forth herein and supersedes any prior
agreements or understandings between them, whether written or oral.

14. Attorneys’ Fees. In the event of litigation relating to this Agreement, the
prevailing party shall be entitled to recover attorney’s fees and costs of
litigation in addition to all other remedies available at law or in equity.

 

15. Waiver. The failure of either party to insist, in any one or more instance,
upon performance of the terms and conditions of this Agreement shall not be
construed as a waiver or a relinquishment of any right granted hereunder or of
the future performance of any such term or condition.

 

 

   

 

16. Notices. Any notice to be given under this Agreement shall be deemed
sufficient if addressed in writing and delivered personally, by telefax with
receipt acknowledged, or by registered or certified U.S. mail to the following:

 

For the Company:

Chairman of the Board of Directors

LandStar, Inc.

c/o Data443 Risk Mitigation, Inc.

101 J Morris Commons Lane, Suite 105

Morrisville, North Carolina 27560

Fax: (919) 526-1070

 

For Employee:

Steven C. Dawson

 

17. Severability. In the event that any provision of any paragraph of this
Agreement shall be deemed to be invalid or unenforceable for any reason
whatsoever, it is agreed such invalidity or unenforceability shall not affect
any other provision of such paragraph or of this Agreement, and the remaining
terms, covenants, restrictions or provisions in such paragraph and in this
Agreement shall remain in full force and effect and any court of competent
jurisdiction may so modify the objectionable provision as to make it valid,
reasonable, and enforceable. In the event that a court determines that the
length of time, the geographic area, or the activities prohibited under this
Agreement are too restrictive to be enforceable, the court may reduce the scope
of the restriction to the extent necessary to make the restriction enforceable.

 

18. Amendment. This Agreement may be amended only by an agreement in writing
signed by each of the parties hereto.

 

19. Restrictive Covenants Are Reasonable. The market for the Company’s services
and the Company’s Business is highly specialized and highly competitive such
that other companies and business entities compete with the Company in various
locations throughout the world. The provisions set forth in this Agreement: (i)
are reasonably necessary to protect the Company’s legitimate business interests,
(ii) are reasonable as to the time, territory, and scope of activities that are
restricted, (iii) do not interfere with Employee’s ability to earn a comparable
living or secure employment in the field of Employee’s choice, (iv) do not
interfere and are not inconsistent with public policy or the public interest,
and (v) are described with sufficient accuracy and definiteness to enable
Employee to understand the scope of the restrictions on Employee.

 

20. Injunctive Relief. Because of the unique nature of the Confidential
Information, Employee understands and agrees that the Company will suffer
irreparable harm in the event that Employee fails to comply with any of
Employee’s obligations under Paragraphs 8, 9, 10, or 11 of this Agreement and
that monetary damages will be inadequate to compensate the Company for such
breach. Accordingly, Employee agrees that the Company will, in addition to any
other remedies available to it at law or in equity, be entitled to injunctive
relief to enforce the terms of Paragraphs 8, 9, 10, or 11 of this Agreement.

 

   

 

21. Publication. Employee hereby authorizes the Company to provide a copy of
this Agreement to any and all of Employee’s future employers and to notify any
and all such future employers that the Company intends to exercise its legal
rights arising out of or in connection with this Agreement and/or any breach or
any inducement of a breach hereof.

 

22. Survival. Employee agrees that: (i) Employee’s employment with the Company
is contingent upon Employee’s execution of this Agreement, which is a material
inducement to the Company to offer employment and the compensation and benefits
hereunder to Employee and to provide Confidential Information to Employee, and
(ii) Paragraphs 8, 9, 10, and 11 of this Agreement shall survive any termination
for any reason whatsoever of Employee’s employment with the Company.

 

23. Governing Law. This Agreement shall be construed, interpreted, and governed
in accordance with the laws of the state of North Carolina, without regard to
the conflicts of laws principles thereof. The state and federal courts in North
Carolina shall be the exclusive venues for the adjudication of all disputes
arising out of this Agreement, and the parties consent to the exercise of
personal jurisdiction over them in any such adjudication and hereby waive any
and all objections and defenses to the exercise of such personal jurisdiction.

 

24. Benefit. This Agreement shall be binding upon and inure to the benefit of
and shall be enforceable by and against the Company, its successors and assigns,
and Employee, his heirs, beneficiaries, and legal representatives. The Company
may assign this Agreement or any rights hereunder, or delegate any obligations
hereunder, without the consent of Employee. Employee shall not assign this
Agreement or delegate Employee’s obligations hereunder. Employee’s right to
receive payments under this Agreement shall not be subject to alienation,
anticipation, commutation, sale, assignment, encumbrance, setoff, charge,
pledge, offset or hypothecation or to execution, levy, attachment, or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to effect any such action shall be null, void and of no effect.

 

 

   

 

25. Compliance with Section 409A.

 

(a) Parties’ Intent. The parties intend that the payments and benefits to which
Employee may become entitled in connection with Employee’s employment under this
Agreement will be exempt from or comply with Section 409A of the Code and the
regulations and other guidance promulgated thereunder (collectively, “Section
409A”) and all provisions of this Agreement shall be construed in a manner
consistent with the requirements for avoiding taxes or penalties under Section
409A. All severance payments hereunder are intended to qualify as short-term
deferrals meeting the requirements of Treasury Regulation Section 1.409A-1(b)(4)
or as involuntary severance payments satisfying the requirements of Treasury
Regulation Section 1.409A-1(b)(9)(iii) and this Agreement shall be construed in
accordance with such intent. If any provision of this Agreement (or of any award
of compensation, including equity compensation or benefits) would cause Employee
to incur any additional tax or interest under Section 409A, the Company shall,
upon the specific request of Employee, use its reasonable business efforts to in
good faith reform such provision to comply with Code Section 409A; provided,
that to the maximum extent practicable, the original intent and economic benefit
to Employee and the Company of the applicable provision shall be maintained, and
the Company shall have no obligation to make any changes that could create any
additional economic cost or loss of benefit to the Company. The Company shall
timely use its reasonable business efforts to amend any plan or program in which
Employee participates to bring it in compliance with Section 409A.

 

(b) Separation from Service. A termination of employment shall not be deemed to
have occurred for purposes of any provision of this Agreement relating to the
payment of any amounts or benefits upon or following a termination of employment
unless such termination also constitutes a “Separation from Service” within the
meaning of Section 409A and, for purposes of any such provision of this
Agreement, references to a “termination,” “termination of employment,”
“separation from service” or like terms shall mean Separation from Service.

 

(c) Separate Payments. Each installment payment required under this Agreement
shall be considered a separate payment for purposes of Section 409A.

 

(d) Delayed Distribution to Key Employees. If the Company determines in
accordance with Sections 409A and 416(i) of the Internal Revenue Code of 1986,
as amended, and the regulations promulgated thereunder, in the Company’s sole
discretion, that Employee is a Key Employee of the Company on the date
Employee’s employment with the Company terminates and that a delay in benefits
provided under this Agreement is necessary to comply with Code Section
409A(A)(2)(B)(i), then any severance payments and any continuation of benefits
or reimbursement of benefit costs provided by this Agreement, and not otherwise
exempt from Section 409A, shall be delayed for a period of six (6) months
following the date of termination of Employee’s employment (the “409A Delay
Period”). In such event, any severance payments and the cost of any continuation
of benefits provided under this Agreement that would otherwise be due and
payable to Employee during the 409A Delay Period shall be paid to Employee in a
lump sum cash amount in the month following the end of the 409A Delay Period.
For purposes of this Agreement, “Key Employee” shall mean an employee who, on an
Identification Date (“Identification Date” shall mean each December 31) is a key
employee as defined in Section 416(i) of the Code without regard to paragraph
(5) thereof. If Employee is identified as a Key Employee on an Identification
Date, then Employee shall be considered a Key Employee for purposes of this
Agreement during the period beginning on the first April 1 following the
Identification Date and ending on the following March 31.

 

a. Reimbursement. To the extent that any right to reimbursement of expenses or
payment of any benefit in-kind under this Agreement constitutes nonqualified
deferred compensation (within the meaning of Section 409A), (i) any such expense
reimbursement shall be made by the Company no later than the last day of the
taxable year following the taxable year in which such expense was incurred by
the Employee, (ii) the right to reimbursement on in-kind benefits shall not be
subject to liquidation or exchange for another benefit, and (iii) the amount of
expenses eligible for reimbursement or in-kind benefits provided during any
taxable year shall not affect the expenses eligible for reimbursement or in-kind
benefits to be provided in any other taxable year.

 

   

 

26. Confidentiality. The terms and conditions of this Agreement are highly
confidential. Accordingly, Employee acknowledges and agrees that neither
Employee nor anyone acting on Employee’s behalf has made or will make any
disclosures concerning the terms of this Agreement to any person or entity,
except: (i) Employee’s spouse or domestic partner; (ii) Employee’s attorneys,
accountants, or financial advisors, but only to the extent disclosure is
necessary to obtain legal or professional services from such persons; or (iii) a
government agency or court of competent jurisdiction pursuant to a legally
enforceable subpoena. If Employee makes any disclosure to any person described
in sub-clauses (i) or (ii) above, Employee shall inform such person of this
confidentiality provision and shall receive the individual’s agreement not to
make any use, disclosure, or announcement concerning this Agreement in violation
of this Section. However, nothing shall prevent the Company from disclosing any
or all provisions of this Agreement in accordance with applicable securities
rules.

 

27. Affirmation. EMPLOYEE acknowledgeS that employee HAS carefully read this
Agreement, EMPLOYEE knowS and understandS its terms and conditions, and employee
HAS had the opportunity to ask the Company any questions employee may have had
prior to signing this Agreement.

 

 

   

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

  LandStar, Inc.         By:

 

    Jason Remillard     Chairman and President         EMPLOYEE         By:

 

    Steven C. Dawson