ex10_16.htm


    
      

    

    Exhibit
10.16


    EMPLOYMENT
AGREEMENT

    


    


    This
Employment Agreement (the “Agreement”) is made and entered into this 1st day of
January, 2009, by and between CICERO INC, a Delaware corporation (the
“Company”), and John P. Broderick, a resident of the State of New Jersey (the
“Employee”).

    


    In
consideration of the mutual covenants, promises and conditions set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:

    


    
      	
              1.

            	
              Employment.  The
      Company hereby employs Employee and Employee hereby accepts such
      employment upon the terms and conditions set forth in this
      Agreement.

            


    

    


    
      	
              2.

            	
              Duties of
      Employee.  Employee will be based in New Jersey or North
      Carolina at the discretion of the Company.  Employee’s title
      will be Chief Executive Officer, Chief Financial Officer, Chief Operating
      Officer and Corporate Secretary and Employee will report directly to the
      Board of Directors of the Company.    Employee agrees
      to perform and discharge such other duties as may be assigned to Employee
      from time to time by the Company to the reasonable satisfaction of the
      Board of Directors , and such duties will be consistent with those duties
      regularly and customarily assigned by the Company to the position of Chief
      Executive Officer, Chief Financial Officer and
      Secretary.  Employee agrees to comply with all of the Company's
      policies, standards and regulations and to follow the instructions and
      directives as promulgated by the Board of Directors of the
      Company.  Employee will devote Employee's full professional and
      business-related time, skills and best efforts to such duties and will
      not, during the term of this Agreement, be engaged (whether or not during
      normal business hours) in any other business or professional activity,
      whether or not such activity is pursued for gain, profit or other
      pecuniary advantage, without the prior written consent of the Board of
      Directors of the Company.  This Section will not be construed to
      prevent Employee from (a) investing personal assets in businesses which do
      not compete with the Company in such form or manner that will not require
      any services on the part of Employee in the operation or the affairs of
      the companies in which such investments are made and in which Employee's
      participation is solely that of an investor; (b) purchasing securities in
      any corporation whose securities are listed on a national securities
      exchange or regularly traded in the over-the-counter market, provided that
      Employee at no time owns, directly or indirectly, in excess of one percent
      (1%) of the outstanding stock of any class of any such corporation engaged
      in a business competitive with that of the Company; or (c) participating
      in conferences, preparing and publishing papers or books, teaching or
      joining or participating in any professional associations or trade group,
      so long as the Board of Directors of the Company approves such
      participation, preparation and publication or teaching prior to Employee’s
      engaging therein.

            


    

    


    
      	
              3.

            	
              Term.  The
      term of this Agreement will be at-will, and can be terminated by either
      party at any time, with or without cause, subject to the provisions of
      Section 4 of this Agreement.

            


    


    
      
         


      

      
        1

        
          

        

      

      
         


        
          Exhibit
10.16

        

      

    

     

    
      	
              4.

            	
              Termination.

            


    

    


    
      	
               
      

            	
              (a)

            	
              Termination by Company
      for Cause.  The Company may terminate this Agreement and
      all of its obligations hereunder immediately, including the obligation to
      pay Employee severance, vacation pay or any further accrued benefits or
      remuneration, if any of the following events
  occur:

            


    

    


    
      	
               
      

            	
              (i)

            	
              Employee
      materially breaches any of the terms or conditions set forth in this
      Agreement and fails to cure such breach within ten (10) days after
      Employee's receipt from the Company of written notice of such breach
      (notwithstanding the foregoing, no cure period shall be applicable to
      breaches by Employee of Sections 10 through 14  of this
      Agreement);

            


    

    


    
      	
               
      

            	
              (ii)

            	
              Employee
      commits any other act materially detrimental to the business or reputation
      of the Company;

            


    

    


    
      	
               
      

            	
              (iii)

            	
              Employee
      engages in dishonest or illegal activities or commits or is convicted of
      any crime involving fraud, deceit or moral turpitude;
  or

            


    

    


    
      	
               
      

            	
              (iv)

            	
              Employee
      dies or becomes mentally or physically incapacitated or disabled so as to
      be unable to perform Employee's duties under this Agreement even with a
      reasonable accommodation.  Without limiting the generality of
      the foregoing, Employee's inability adequately to perform services under
      this Agreement for a period of sixty (60) consecutive days will be
      conclusive evidence of such mental or physical incapacity or disability,
      unless such inability  is pursuant to a mental or physical
      incapacity or disability covered by the Family Medical Leave Act, in which
      case such sixty (60) day period shall be extended to a one hundred and
      twenty (120) day period.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Termination by Company
      Without Cause.  The Company may terminate Employee's
      employment pursuant to this Agreement for reasons other than those stated
      in Section 4(a) upon at least thirty (30) days' prior written notice to
      Employee. In the event Employee's employment with the Company is
      terminated by the Company without cause, the Company shall be obligated to
      pay Employee a lump sum severance payment equal to twelve (12) months of
      Employee’s then base salary payable within thirty (30)
      days  after the date of termination.  In addition,
      Employee will be entitled to payment of all unused vacation days at his
      current daily rate and any accrued but unpaid salary or earned bonuses.
      Any option grants or restricted stock awards made to employee will
      immediately vest. The  payment to  Employee
      for  all deferred salaries and earned bonuses will be paid
      within 30 days by the Company. Other than the severance payments set forth
      in this Section 4(b), Employee will be entitled to receive no further
      remuneration and will not be entitled to participate in any Company
      benefit programs following his
      termination by the Company, whether such termination is with or without
      cause.

            


    


    
      
         


      

      
        2

        
          

        

      

      
         


        
          Exhibit
10.16

        

      

    

     

    
      	
               
      

            	
              (c)

            	
              Termination by
      Employee for Cause.  In the event of a Change of Control
      (as defined below) of the Company that results in either a substantial
      reduction or change of title in the Employee’s job duties related to his
      position as CFO or CEO, ,or a decrease in or a failure to provide the
      compensation or vested benefits under this Agreement or the Company
      initiates a substantial reduction or change of title in the Employee’s job
      duties related to his position as CFO, Employee shall have the right to
      resign his employment and will be entitled to a lump sum severance payment
      equal to twelve (12) months of Employee’s then base salary payable within
      thirty (30) days after  the date of termination  In
      addition, Employee will be entitled to payment of all unused vacation days
      at his current daily rate and a lump sum equal to all deferred salaries
      and earned bonuses. In addition, all Employee’s then outstanding but
      unvested stock options shall vest one hundred percent
      (100%).  Employee shall have 12 months from the date written
      notice is given to Employee about the announcement and closing of a
      transaction resulting in a Change in Control of the Company that would
      result in a substantial change in the Employee’s job duties or decrease
      his compensation or vested benefits under this Agreement to resign or this
      Section 4(c) shall not apply.  In the event Employee resigns
      from the Company for any other reason, Employee will not be entitled to
      receive or accrue any further Company benefits or other remuneration under
      this Agreement, and Employee specifically agrees that he will not be
      entitled to receive any severance
pay.

            


    

    


    For
purposes of this Section 4, a Change in Control shall be deemed to have occurred
if any of the following occur:

    


    
      	
               
      

            	
              (i)

            	
              the
      merger or consolidation of the Company with or into another unaffiliated
      entity, or the merger of another unaffiliated entity into the Company or
      another subsidiary thereof with the effect that immediately after such
      transaction the stockholders of the Company immediately prior to such
      transaction hold less than fifty percent (50%) of the total voting power
      of all securities generally entitled to vote in the election of directors,
      managers or trustees of the entity surviving such merger or
      consolidation.  This provision will not apply to any
      reorganization and reverse merger between the Company and any subsidiary
      (or any other similar entity established for a similar
      purpose);

            


    

    


    
      	
               
      

            	
              (ii)

            	
              the
      sale or transfer of more than fifty-one percent (51%) of the Company’s
      then outstanding voting stock (other than a restructuring event which
      results in the continuation of the Company’s business by an affiliated
      entity) to unaffiliated person or group (as such term is used in Section
      13(d)(3) of the Securities Exchange Act of 1934, as amended);
      or

            


    

    


    
      	
               
      

            	
              (iii)

            	
              the
      adoption by the stockholders of the Company of a plan relating to the
      liquidation or dissolution of the
Company.

            


    


    
      
         


      

      
        3

        
          

        

      

      
         


        
          Exhibit
10.16

        

      

    

     

    5.           Compensation and
Benefits.

    


    
      	
               
      

            	
              (a)

            	
              Annual
      Salary.  During the term of this Agreement and for all
      services rendered by Employee under this Agreement, the Company will pay
      Employee a base salary of One Hundred and Seventy-Five Thousand Dollars
      ($175,000.00) per annum in equal bi-monthly
      installments.  Employee will also be entitled to earn a short
      term incentive compensation as further outlined in Exhibit
    D.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Incentive
      Compensation.  Employee is eligible for
      an  annual bonus upon the Company reaching certain pre tax
      income levels (after accounting for all bonuses)  as set forth
      in Exhibit C.  Said bonus will be payable after the annual
      accounts have been presented to the Compensation Committee. Exhibit C
      attached hereto provides the benchmarks associated with achieving the
      Incentive Compensation.

            


    

    


    
      	
               
      

            	
              (c)

            	
              Equity
      Awards.  Employee is eligible for stock option grants and
      restricted stock awards as determined by the Compensation
      Committee.

            


    

    


    
      	
              6.

            	
              Vacation.  Employee
      shall be eligible for four (4) weeks of paid vacation annually, provided
      that such vacation is scheduled at such times that do not interfere with
      the Company’s legitimate business
needs.

            


    

    


    
      	
              7.

            	
              Other
      Benefits.  Employee will be entitled to such fringe
      benefits as may be provided from time-to-time by the Company to its
      employees, including, but not limited to, group health insurance, life and
      disability insurance, and any other fringe benefits now or hereafter
      provided by the Company to its employees, if and when Employee meets the
      eligibility requirements for any such benefit.  The Company
      reserves the right to change or discontinue any employee benefit plans or
      programs now being offered to its employees; provided, however, that all
      benefits provided for employees of the same position and status as
      Employee will be provided to Employee on an equal
  basis.

            


    

    


    
      	
              8.

            	
              Business
      Expenses.  Employee will be reimbursed for all reasonable
      expenses incurred in the discharge of Employee's duties under this
      Agreement pursuant to the Company's standard reimbursement
      policies.

            


    

    


    
      	
              9.

            	
              Withholding.  The
      Company will deduct and withhold from the payments made to Employee under
      this Agreement, state and federal income taxes, FICA and other amounts
      normally withheld from compensation due
  employees.

            


    

    


    
      	
              10.

            	
              Non-Disclosure of
      Proprietary Information.  Employee recognizes and
      acknowledges that the Trade Secrets (as defined below) and Confidential
      Information (as defined below) of the Company and its affiliates and all
      physical embodiments thereof (as they may exist from time-to-time,
      collectively, the “Proprietary Information”) are valuable, special and
      unique assets of the Company's and its affiliates' businesses. Employee
      further acknowledges that access to such Proprietary Information is
      essential to the performance

            


    


    
      
         


      

      
        4

        
          

        

      

      
         


        
          Exhibit
10.16

        

      

    

    


    
      	
               
      

            	
              of
      Employee's duties under this Agreement.  Therefore, in order to
      obtain access to such Proprietary Information, Employee agrees that,
      except with respect to those duties assigned to him by the Company,
      Employee  will hold in confidence all Proprietary Information
      and will not reproduce, use, distribute, disclose, publish or otherwise
      disseminate any Proprietary Information, in whole or in part, and will
      take no action causing, or fail to take any action necessary to prevent
      causing, any Proprietary Information to lose its character as Proprietary
      Information, nor will Employee make use of any such information for
      Employee's own purposes or for the benefit of any person, firm,
      corporation, association or other entity (except the Company) under any
      circumstances.

            


    

    


    For
purposes of this Agreement, the term “Trade Secrets” means information,
including, but not limited to, any technical or nontechnical data, formula,
pattern, compilation, program, device, method, technique, drawing, process,
financial data, financial plan, product plan, list of actual or potential
customers or suppliers, or other information similar to any of the foregoing,
which derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can derive economic value from its disclosure or use.  For
purposes of this Agreement, the term “Trade Secrets” does not include
information that Employee can show by competent proof (i) was known to Employee
and reduced to writing prior to disclosure by the Company (but only if Employee
promptly notifies the Company of Employee’s prior knowledge); (ii) was generally
known to the public at the time the Company disclosed the information to
Employee;  (iii) became generally known to the public after disclosure
by the Company through no act or omission of Employee; or (iv) was disclosed to
Employee by a third party having a bona fide right both to possess the
information and to disclose the information to Employee.  The term
“Confidential Information” means any data or information of the Company, other
than trade secrets, which is valuable to the Company and not generally known to
competitors of the Company.  The provisions of this Section 6 will
apply to Trade Secrets for so long as such information remains a trade secret
and to Confidential Information during Employee’s employment with the Company
and for a period of two (2) years following any termination of Employee’s
employment with the Company for whatever reason.

    


    
      	
              11.

            	
              Non-Solicitation
      Covenants.  Employee agrees that during Employee's
      employment by the Company and for a period of  two (2) year
      following the termination of Employee's employment for whatever reason,
      Employee will not, directly or indirectly, on Employee's own behalf or in
      the service of or on behalf of any other individual or entity, divert,
      solicit or attempt to divert or solicit any individual or entity (i) who
      is a client of the Company at any time during the six (6)-month period
      prior to Employee's termination of employment with the Company (“Client”),
      or was actively sought by the Company as a prospective client, and (ii)
      with whom Employee had material contact while employed by the Company to
      provide  similar services or products as such provided by
      Employee for the Company to such Clients or prospects.  Employee
      further agrees and represents that during Employee's employment by the
      Company and for a period of  two (2) year following any
      termination of Employee's employment for whatever reason, Employee will
      not, directly or indirectly, on Employee's own behalf or in the service
      of, or on behalf of
      any other individual or entity, divert, solicit or hire away, or attempt
      to divert, solicit or hire away, to or for any individual or entity which
      is engaged in providing similar services or products to that provided by
      the Company, any person employed by the Company for whom Employee had
      supervisory responsibility or with whom Employee had material contact
      while employed by the Company, whether or not such employee is a full-time
      employee or temporary employee of the Company, whether or not such
      employee is employed pursuant to written agreement and whether or not such
      employee is employed for a determined period or at-will.  For
      purposes of this Agreement, “material contact” exists between Employee and
      a Client or potential Client when (1) Employee established and/or nurtured
      the Client or potential Client; (2) the Client or potential Client and
      Employee interacted to further a business relationship or contract with
      the Company; (3) Employee had access to confidential information and/or
      marketing strategies or programs regarding the Client or potential Client;
      and/or (4) Employee learned of the Client or potential Client through the
      efforts of the Company providing Employee with confidential Client
      information, including but not limited to the Client’s identify, for
      purposes of furthering a business
  relationship.

            


    


    
      
         


      

      
        5

        
          

        

      

      
         


        
          Exhibit
10.16

        

      

    

     

    
      	
              12.

            	
              Existing Restrictive
      Covenants.  Except as provided in Exhibit B, Employee has
      not entered into any agreement with any employer or former employer: (a)
      to keep in confidence any confidential information, or (b) to not compete
      with any former employer.  Employee represents and warrants that
      Employee's employment with the Company does not and will not breach any
      agreement which Employee has with any former employer to keep in
      confidence confidential information or not to compete with any such former
      employer.  Employee will not disclose to the Company or use on
      its behalf any confidential information of any other party required to be
      kept confidential by Employee.

            


    

    


    
      	
              13.

            	
              Return of Proprietary
      Information.  Employee acknowledges that as a result of
      Employee's employment with the Company, Employee may come into the
      possession and control of Proprietary Information, such as proprietary
      documents, drawings, specifications, manuals, notes, computer programs, or
      other proprietary material.  Employee acknowledges, warrants and
      agrees that Employee will return to the Company all such items and any
      copies or excerpts thereof, and any other properties, files or documents
      obtained as a result of Employee's employment with the Company,
      immediately upon the termination of Employee's employment with the
      Company.

            


    

    


    
      	
              14.

            	
              Proprietary
      Rights.  During the course of Employee's employment with
      the Company, Employee may make, develop or conceive of useful processes,
      machines, compositions of matter, computer software, algorithms, works of
      authorship expressing such algorithm, or any other discovery, idea,
      concept, document or improvement which relates to or is useful to the
      Company's Business (the “Inventions”), whether or not subject to copyright
      or patent protection, and which may or may not be considered Proprietary
      Information.  Employee acknowledges that all such Inventions
      will be “works made for hire” under United States copyright law and will
      remain the sole and exclusive property of the Company.  Employee
      also hereby assigns and agrees to assign to the Company, in perpetuity,
      all right, title and interest Employee may have in and to such Inventions,
      including without limitation, all copyrights, and the right to apply for
      any form of patent, utility
      model, industrial design or similar proprietary right recognized by any
      state, country or jurisdiction.  Employee further agrees, at the
      Company's request and expense, to do all things and sign all documents or
      instruments necessary, in the opinion of the Company, to eliminate any
      ambiguity as to the ownership of, and rights of the Company to, such
      Inventions, including filing copyright and patent registrations and
      defending and enforcing in litigation or otherwise all such
      rights.

            


    


    
      
         


      

      
        6

        
          

        

      

      
         


        
          Exhibit
10.16

        

      

    

     

    Employee
will not be obligated to assign to the Company any Invention made by Employee
while in the Company's employ which does not relate to any business or activity
in which the Company is or may reasonably be expected to become engaged, except
that Employee is so obligated if the same relates to or is based on Proprietary
Information to which Employee will have had access during and by virtue of
Employee's employment or which arises out of work assigned to Employee by the
Company.  Employee will not be obligated to assign any Invention which
may be wholly conceived by Employee after Employee leaves the employ of the
Company, except that Employee is so obligated if such Invention involves the
utilization of Proprietary Information obtained while in the employ of the
Company.  Employee is not obligated to assign any Invention that
relates to or would be useful in any business or activities in which the Company
is engaged if such Invention was conceived and reduced to practice by Employee
prior to Employee's employment with the Company.  Employee agrees that
any such Invention is set forth on Exhibit “A” to this Agreement.

    


    
      	
              15.

            	
              Remedies.  Employee
      agrees and acknowledges that the violation of any of the covenants or
      agreements contained in Sections 10 through 14 of this Agreement would
      cause irreparable injury to the Company, that the remedy at law for any
      such violation or threatened violation thereof would be inadequate, and
      that the Company will be entitled, in addition to any other remedy, to
      temporary and permanent injunctive or other equitable relief without the
      necessity of proving actual damages or posting a
  bond.

            


    

    


    
      	
              16.

            	
              Severability.  In
      case one or more of the provisions contained in this Agreement is for any
      reason held to be invalid, illegal or unenforceable in any respect, the
      parties agree that it is their intent that the same will not affect any
      other provision in this Agreement, and this Agreement will be construed as
      if such invalid or illegal or unenforceable provision had never been
      contained herein.  It is the intent of the parties that this
      Agreement be enforced to the maximum extent permitted by
    law.

            


    

    


    
      	
              17.

            	
              Entire
      Agreement.  This Agreement embodies the entire agreement
      of the parties relating to the subject matter of this Agreement and
      supersedes all prior agreements, oral or written, regarding the subject
      matter hereof.   No amendment or modification of this
      Agreement will be valid or binding upon the parties unless made in writing
      and signed by the parties.

            


    

    


    
      	
              18.

            	
              Governing
      Law.  This Agreement is entered into and will be
      interpreted and enforced pursuant to the laws of the State of New
      Jersey.  The parties hereto hereby agree that the appropriate
      forum and venue for any disputes between any of the parties hereto arising
      out of this Agreement shall be any federal court in the state where the
      Employee has his principal place of residence and each of the parties
      hereto hereby submits to the personal jurisdiction of any such
      court.  The foregoing shall not limit the rights of any party to
      obtain execution of judgment in any other jurisdiction.  The
      parties further agree, to the extent permitted by law, that a final and
      unappealable judgment against either of them in any action or proceeding
      contemplated above shall be conclusive and may be enforced in any other
      jurisdiction within or outside the United States by suit on the judgment,
      a certified exemplified copy of which shall be conclusive evidence of the
      fact and amount of such judgment.

            


    

    


    
      	
              19.

            	
              Surviving
      Terms.  Sections 4, 10, 11, 14, 15 and 18 of this
      Agreement shall survive termination of this
  Agreement.

            


    

    


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

    


    
      
        
          
            
              
                
                  
                    
                      
                        	
                                COMPANY:

                              	 
      	 
      	
                                EMPLOYEE:

                              
	 	 	 	 
	
                                CICERO,
      INC.

                              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                                By:  

                              	 
      	 
      	 
      
	 	 	 	 
	
                                Name:

                              	 
      	 
      	
                                John
      P. Broderick

                              
	
                                Title:

                              	 
      	 
      	 
      


                      

                    

                  

                

              

            

          

        

      

    


    
      
         


      

      
        7

        
          

        

      

      
         


        
          Exhibit
10.16

        

      

    


    EXHIBIT
A

    


    INVENTIONS

    


    


    


    


    


    


    
      	 
      	
              Employee
      represents that there are no
Inventions.

            


    

    


    


    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	 	___________________
	 
      	
                                            Employee
      Initials

                                          


                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

      
        
           


        

        
          8

          
            

          

        

        
           


          
            Exhibit
10.16

          

        

      

    

     

    EXHIBIT
B

    


    EXISTING RESTRICTIVE
COVENANTS

    


    



    
      
         


      

      
        9

        
          

        

      

      
         


        
          Exhibit
10.16

        

      

    

     

    EXHIBIT
C

    


    VARIABLE
COMPENSATION

    


    


        Annual
Cash Bonus:

     

        Employee is
entitled to an annual cash bonus payable after the Company has reported its
results for the year. This annual cash bonus is tied to Operating Net Income
before taxes (defined as above)  as per the chart below:

    


    
 

    
      
        
          
            
              
                
                  
                    	 
      	 	
                            Operating
      Net Income Net Income Range (before tax)

                          	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 
	 
      	 	
                            From

                          	 	 	
                            To

                          	 	 	
                            Variable
      Compensation

                          	 
	 
      	 	
                            Less
      than $1,000,000

                          	 	 	 	 	 	
                            None

                          	 
	
                            Tier
      1

                          	 	$	1,000,000	 	 	$	1,699,999	 	 	$	100,000	 
	
                            Tier
      2

                          	 	$	1,700,000	 	 	$	1,999,999	 	 	$	200,000	 
	
                            Tier
      3

                          	 	
                             greater
      than $2,000,000

                          	 	 	 	 	 	 	$	300,000	 
	 
      	 	 	 	 	 	 	 	 	 	 	 	 


                  

                

              

            

          

        

      

    

     

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
D

    


    SHORT
TERM VARIABLE COMPENSATION

    


    


    In order
to reach a targeted compensation for 2009 the Employee will receive a Bonus of
$25,000 upon closing and payment of the first contract valued at $300,000 or
greater.

    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
E

    


    DEFERRED
COMPENSATION PLAN

    


    


    Should
Employee achieve targeted operating income for fiscal 2009, he would be eligible
to participate in an additional deferred compensation plan. The Executive
Deferred Compensation Plan would set aside an addition cash payout of $75,000 if
Executive Employee achieved targeted operating income in 2009 and 2010. The
Deferred Compensation Plan amount would be paid to Employee after the annual
accounts have been filed with the regulatory agencies in March,
2011.

     

    
      
         


      

      
        12