Document:

EMPLOYMENT AGREEMENT

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”), effective as of March 3, 2014 (the “Effective Date”), is by and between Heat Biologics, Inc. a corporation organized under the laws of the State of Delaware with offices located at 100 Europa Drive, Suite 420, Chapel Hill, North Carolina 27517 (the “Corporation”), and Taylor Schreiber, M.D., Ph.D., an individual residing in North Carolina (the “Employee”).

1.

EMPLOYMENT; DUTIES

(a)

The Corporation hereby engages and employs Employee as the Vice President of Research of the Corporation, and Employee hereby accepts such engagement and employment as the Vice President of Research of the Corporation, for the Term (as defined in Section 2). Employee will report directly to the Chief Executive Officer of the Corporation, and Employee shall have such duties, authorities and responsibilities commensurate with the duties, authorities and responsibilities of persons in similar capacities in similarly sized companies. 

(b)

Subject to the last sentence of this paragraph, Employee shall devote such time as is necessary, which is anticipated to require at least eighty percent (80%) of his professional time, to attending to the business of the Corporation. During the Term, Employee may not engage, directly or indirectly, in any other business, investment, or activity that interferes with Employee's performance of Employee's duties hereunder, is contrary to the interest of the Corporation or any of its subsidiaries, or requires any significant portion of Employee's professional time; provided, however, that as long as the activity does not interfere with Employee's performance of Employee's duties hereunder,,Employee shall be entitled to devote no more than an aggregate of twenty percent (20%) of his professional time to research activities, physician related clinical activities or other independent consulting work that is not directly or indirectly competitive with the research or development conducted or contemplated by the Corporation or the products developed or being developed by the Corporation.

2. 

TERM

The term of this Agreement, and of Employee’s employment under it, shall commence on the Effective Date and terminate on the earlier of: (i) four (4) years from the Effective Date of this Agreement or (ii) termination under Section 8 of this Agreement (the “Term”). 

3. 

COMPENSATION

(a)

As compensation for the performance of his duties on behalf of the Corporation hereunder, Employee shall receive the following:

 

(i) 

BASE SALARY. Employee shall receive an annual base salary of Two Hundred Ten Thousand Dollars ($210,000) for the Term (the “Base Salary”), payable bi-weekly.

 

(ii) 

BONUS. Employee shall be eligible for an annual bonus of up to twenty percent (20%) percent of his Base Salary, which bonus shall be is payable in cash (“Annual Bonus”). Any Annual Bonus that may be awarded will be in the sole and absolute discretion of both the Compensation Committee and the Board of Directors of the Corporation. Any first-year Annual Bonus will be pro-rated from the Effective Date thru December 31, 2014.

(b)

The Corporation shall reimburse Employee for all normal, usual and necessary expenses incurred by Employee in the course of performing his duties, including all travel, lodging and entertainment, against receipt by the Corporation, as the case may be, of appropriate vouchers or other proof of Employee’s expenditures and in accordance with any expense reimbursement policy that may be adopted by the Corporation after the Effective Date; provided that prior to adoption of such policy, Employee obtains prior written approval of the Chief Executive Officer or Chief Financial Officer for any expenses or series of related expenses that exceed $500.

(c)

On the date that the Corporation’s shareholders approve its new stock incentive plan (the “Plan”), the Corporation shall grant to you an incentive option to purchase an aggregate of 50,000 shares of the Corporation’s publicly traded common stock (the “Initial Option”) pursuant to the Plan with an exercise price per share equal to the fair market value of the Corporation’s common stock on the date of grant. Such stock options will vest on the date of grant immediately as to such number of shares as shall equal the product of (i) the number of completed months from the Effective Date until the date of the shareholder approval of the Plan (the “Completed Months”) and (ii) 1041.67 and the balance vesting as to 1041.67 shares per month at the end of each month for such additional number of months as shall equal the difference between (i) 48 and (ii) the number of Completed Months. Any vested portions of the Initial Option will remain exercisable for a period of ten (10) years from the Effective Date, unless such exercise rights are terminated earlier per the Corporation’s existing stock option plan. Other terms of the Initial Option, including the period to exercise vested options following termination of employment with the Corporation, shall be according to the Corporation’s existing stock option plan and the Corporation’s stock option agreement. 

In addition to the Initial Option, if at any time prior to the first anniversary of the Effective Date certain milestones agreed upon by Corporation and Employee have been attained, Employee shall receive from the Corporation, on such first anniversary of the Effective Date, an incentive option to purchase an additional ten thousand (10,000) shares of the Corporation’s publicly traded common stock at an exercise price equal to the closing market price per share of the Corporation’s common stock on such first anniversary of the Effective Date (the “Incentive Option”). The Corporation and Employee agree to use their best efforts to agree to such milestones by December 31, 2014. Once granted, one forty-eighth (1/48) of the Incentive Option grant will vest to Employee on the first day of each month (commencing on the first day of the month after the first anniversary of the Effective Date) for forty-eight (48) successive months while Employee is employed by the Corporation. Any vested portions of the Incentive Option will remain exercisable for a period of ten (10) years from the first anniversary of the Effective Date, unless such exercise rights are terminated earlier per the Corporation’s existing stock option plan. Other terms of the Incentive Option, including the period to exercise vested options following termination of employment with the Corporation, shall be according to the Corporation’s existing stock option plan and the Corporation’s stock option agreement.

(d)

Employee shall be entitled to three (3) weeks paid vacation and five (5) days sick leave in addition to standard national holidays in accordance with the Corporation’s policies. 

(e)

The Corporation shall pay seventy-five percent (75%) of the cost of medical, insurance for coverage for Employee and his family pursuant to the Corporation’s healthcare insurance policy plan. Employee shall also be entitled to any other benefits provided to the Corporation’s officers. 

4. 

REPRESENTATIONS AND WARRANTIES BY EMPLOYEE

Employee hereby represents and warrants as of the Effective Date to the Corporation that:

(a) 

Neither the execution and delivery of this Agreement nor the performance by Employee of his duties and other obligations hereunder violates or will violate any statute, law, determination or 

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award, or conflict with or constitute a default under (whether immediately, upon the giving of notice or lapse of time or both) any prior employment agreement, contract, or other instrument to which Employee is a party or by which he is bound.

 

(b) 

Employee has the full right, power and legal capacity to enter and deliver this Agreement and to perform his duties and other obligations hereunder. This Agreement constitutes the legal, valid and binding obligation of Employee enforceable against his in accordance with its terms. No approvals or consents of any persons or entities are required for Employee to execute and deliver this Agreement or perform his duties and other obligations hereunder.

 

5. 

CONFIDENTIAL INFORMATION

 

(a) 

Except in performing his duties within the scope of his employment with the Corporation or except with the prior written authorization by the Corporation, Employee agrees that, during the Term or at any time thereafter, he will not disclose or make accessible to any person who is not a director, employee, contractor, or agent of the Corporation, the non-public research, development, products, services and technology, both current and under development, promotion and marketing programs, lists, trade secrets and other confidential and proprietary business information of the Corporation, of any of its affiliates, of any of their clients, or of any other party to whom the Corporation owes an obligation of confidentiality (collectively, “Corporation Confidential Information. Employee agrees: (i) not to use any Corporation Confidential Information for himself or others and (ii) not to take any Corporation Confidential Information or reproductions thereof from the Corporation’s facilities at any time during his employment by the Corporation other than to perform his duties hereunder. Employee agrees immediately to return all Corporation Confidential Information and reproductions thereof in his possession to the Corporation upon request and in any event upon termination of employment.

(b) 

In the event that Employee breaches any provisions of this Section 5 or there is a threatened breach, then, in addition to any other rights which the Corporation may have, the Corporation shall be entitled, without the posting of a bond or other security, to injunctive relief to enforce the restrictions contained herein. In the event that an actual proceeding is brought in equity to enforce the provisions of this Section 5, Employee shall not urge as a defense that there is an adequate remedy at law, nor shall the Corporation be prevented from seeking any other remedies which may be available. In addition, Employee agrees that in the event that he breaches the covenants in this Section 5, in addition to any other rights that the Corporation may have, Employee shall be required to pay to the Corporation any amounts he receives in connection with such breach.

 

(c) 

Employee recognizes that in the course of his duties hereunder, he may receive from the Corporation or others information which may be considered “material, non-public information” concerning a public company that is subject to the reporting requirements of the United States Securities and Exchange Act of 1934, as amended. Employee agrees not to:

 

(i) 

Buy or sell any security, option, bond or warrant while in possession of relevant material, non-public information received from the Corporation or others in connection herewith, and

 

(ii) 

Provide the Corporation with information with respect to any public company that may be considered material, non-public information, unless first specifically agreed to in writing by the Corporation.

6. 

INVENTIONS DISCOVERED BY EMPLOYEE

Employee shall promptly disclose to the Corporation any invention, improvement, discovery, process, formula, or method or other intellectual property, whether or not patentable or copyrightable, 

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conceived or first reduced to practice by Employee, either alone or jointly with others, while performing services hereunder (or, if based on any of the Corporation Confidential Information, within one (1) year after the expiration or termination of the Term): (a) which pertain to any line of business activity of the Corporation, whether then conducted or then being actively planned by the Corporation, with which Employee was or is involved; (b) which is developed using time, material or facilities of the Corporation, whether or not during working hours or on the Corporation premises; or (c) which directly relates to any of Employee’s work for the Corporation during the Term, whether or not during normal working hours (collectively, "Inventions"). Employee hereby assigns to the Corporation all of Employee’s right, title and interest in and to any such Inventions. During and after the Term, Employee shall execute any documents necessary to perfect the assignment of such Inventions to the Corporation and to enable the Corporation to apply for, obtain and enforce patents, trademarks and copyrights in any and all countries on such Inventions, including, without limitation, the execution of any instruments and the giving of evidence and testimony, without further compensation beyond Employee’s agreed compensation during the course of Employee’s employment. All such acts and cooperation hereunder shall be done at Corporation’s expense, without cost or expense to Employee. Employee shall be compensated for the giving of evidence or testimony after the Term of Employee’s employment at the rate of $500/day. Without limiting the foregoing, Employee further acknowledges that all original works of authorship by Employee, whether created alone or jointly with others, related to Employee’s employment with the Corporation and which are protectable by copyright, are "works made for hire" within the meaning of the United States Copyright Act, 17 U. S. C. (S) 101, as amended, and the copyright of which shall be owned solely, completely and exclusively by the Corporation. If any Invention is considered to be work not included in the categories of work covered by the United States Copyright Act, 17 U. S. C. (S) 101, as amended, such work is hereby assigned or transferred completely and exclusively to the Corporation. Employee hereby irrevocably designates counsel to the Corporation as Employee's agent and attorney-in-fact to do all lawful acts necessary to apply for and obtain patents and copyrights and to enforce the Corporation's rights under this Section. This Section 6 shall survive the termination of this Agreement. Any assignment of copyright hereunder includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as "moral rights" (collectively "Moral Rights"). To the extent such Moral Rights cannot be assigned under applicable law and to the extent the following is allowed by the laws in the various countries where Moral Rights exist, Employee hereby waives such Moral Rights and consents to any action of the Corporation that would violate such Moral Rights in the absence of such consent. Employee agrees to confirm any such waivers and consents from time to time as requested by the Corporation.

7.

NON-COMPETE; NON-SOLICITATION

(a)

NON-COMPETE. For a period commencing on the Effective Date and ending one (1) year after the date Employee ceases to be employed by the Corporation (the "Non-Competition Period"), Employee shall not: 

(i)

accept any employment whose responsibilities include developing, marketing or selling any biologic or pharmaceutical product that is based upon heat shock protein-based cancer immunotherapy;

(ii)

own any equity of an entity that is developing, marketing or selling a biologic or pharmaceutical product that is based upon heat shock protein-based cancer immunotherapy; provided that Employee shall not be prohibited from being a passive owner of not more than five percent (5%) of the equity securities of an entity described in this clause (ii) that is publicly traded and for which he is in compliance with clauses (i) and (iii); or 

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(iii)

permit his name to used by, act as consultant or advisor to, render material services for, or otherwise assist in any manner any person or entity, in each case with regard to the development, marketing or selling of any biologic or pharmaceutical product that is based upon heat shock protein-based cancer immunotherapy. 

(b)

NON-SOLICITATION. During the Non-Competition Period, Employee shall not, directly or indirectly, (i) induce or attempt to induce or aid others in inducing anyone working at or for the Corporation to cease working at or for the Corporation, or in any way interfere with the relationship between the Corporation and anyone working at or for the Corporation or (ii) in any way interfere with the relationship between the Corporation and any customer, supplier, licensee or other business relation of the Corporation.

(c)

SCOPE. If, at the time of enforcement of this Section 7, a court shall hold that the duration, scope, area or other restrictions stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration, scope, area or other restrictions reasonable under such circumstances shall be substituted for the stated duration, scope, area or other restrictions.

(d)

INDEPENDENT AGREEMENT. The covenants made in this Section 7 shall survive the termination of this Agreement for the period of time set forth in subsections (a) and (b) respectively.

8. 

TERMINATION

Employee’s employment hereunder shall continue for the Term unless terminated upon the first to occur of the following events in (a)-(f):

(a)

Employee’s death.

(b)

Employee’s “Disability”, meaning Employee’s incapacity, due to physical or mental illness, which results in Employee having been absent from fully performing his duties with the Corporation for a continuous period of more than thirty (30) days or more than sixty (60) days in any period of three hundred sixty-five (365) consecutive days. In the event that the Corporation intends to terminate the employment of Employee by reason of Disability, the Corporation shall give Employee no less than thirty (30) days’ prior written notice of the Corporation’s intention to terminate Employee’s employment. The Employee agrees, in the event of any dispute hereunder as to whether a Disability exists, and if requested by the Corporation, to submit to a physical examination in the state of the Corporation’s Employee offices by a licensed physician selected by mutual agreement between the Corporation and the Employee, the cost of such examination to be paid by the Corporation. The written medical opinion of such physician shall be conclusive and binding upon each of the parties hereto as to whether a Disability exists and the date when such Disability arose. If Employee refuses to submit to appropriate examinations by such physician at the request of the Corporation, the determination of the Employee’s Disability by the Corporation in good faith will be conclusive as to whether such Disability exists. This Agreement shall be interpreted and applied so as to comply with the provisions of the Americans with Disabilities Act (to the extent that it is applicable) and any other applicable laws regarding disability.

(c) 

termination by the Corporation for Just Cause; “Just Cause”, meaning the Employee’s:

(i)

acts of embezzlement or misappropriation of funds; or fraud; 

(ii)

conviction of a felony or other crime involving moral turpitude, dishonesty or theft;

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(iii)

willful unauthorized disclosure of Corporation Confidential Information;

(iv) 

material violation of any provision of the Agreement, which is not cured by Employee within thirty (30) days of receiving written notice of such violation by the Corporation; 

(v) 

being under the influence of drugs (other than prescription medicine or other medically-related drugs to the extent that they are taken in accordance with their directions) during the performance of Employee’s duties under this Agreement;

(vi) 

engaging in behavior that would constitute grounds for liability for harassment (as proscribed by the U.S. Equal Employment Opportunity Commission Guidelines or any other applicable state or local regulatory body) or other egregious conduct that violates laws governing the workplace; or

(vii) 

willful failure to perform his written assigned tasks, where such failure is attributable to the fault of Employee, gross insubordination, or dereliction of fiduciary obligations which are not cured by Employee within thirty (30) days of receiving written notice of such violation by the Corporation.

In the event that the Corporation intends to terminate the employment of Employee by reason of Just Cause, the Corporation shall give Employee written notice of the Corporation’s intention to terminate Employee’s employment, and such termination may be effective immediately, unless a cure period applies, in which case the termination date may not precede the expiration date of the applicable cure period and the breach remains uncured.

(d) 

termination by the Corporation Without Just Cause; “Without Just Cause”, meaning written notice by the Corporation to Employee of termination other than for Just Cause or other than due to Employee’s death or Disability. 

(e)

termination by Employee for Good Reason; “Good Reason”, meaning a material breach by the Corporation of the terms of this Agreement, which breach is not cured within thirty (30) days after notice thereof from Employee. 

In the event that Employee intends to terminate his employment for Good Reason, Employee shall give the Corporation written notice of his intention to terminate his employment, and such termination may be effective immediately, unless a cure period applies, in which case the termination date may not precede the expiration date of the applicable cure period.

(f) 

termination by Employee Without Good Reason; “Without Good Reason”, meaning written notice by Employee to the Corporation of termination other than for Good Reason.

 

(g)

If Employee’s employment hereunder is terminated for any reason under this Section 8, Employee or his estate, as the case may be, will only be entitled to receive the accrued Base Salary, vacation pay, expense reimbursement and any other entitlements accrued by Employee under Section 3, to the extent not previously paid (the sum of the amounts described in this subsection shall be hereinafter referred to as the “Accrued Obligations”); provided, however, that if Employee’s employment is terminated by the Corporation Without Just Cause or by the Employee for Good Reason, then in addition to paying Accrued Obligations, the Corporation shall pay to the Employee as a severance benefit, (i) an amount equal to four months’ Base Salary and (ii) pro-rated amount of the Annual Bonus which he would have received the year without the occurrence of such termination; provided that Employee first executes and does not revoke a release and settlement agreement in form acceptable to Employee and the Corporation releasing the Corporation from all claims arising for his employment within 60 days of such 

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termination. These amounts shall be paid to the Employee in accordance with the Corporation’s standard salary payments to its employees.

9.

NO DISPARAGEMENT

Employee agrees that during the course of his employment or at any time thereafter, he and his agents, family and/or representatives shall refrain from (i) all conduct, verbal or otherwise, which would materially damage the reputation, goodwill or standing in the community of the Corporation, its affiliates, subsidiaries, divisions, agents and related parties and their respective principals, owners (direct or indirect), members, directors, officers, agents, servants, employees, parties, attorneys and other professionals, successors and assigns (collectively, the “The Corporation Related Parties”) and (ii) referring to or in any way commenting on the Corporation and/or any of the other The Corporation Related Parties in or through the general media or any public domain (including without limitation, internet websites, blogs, chat rooms and the like), which would materially damage, the reputation, goodwill or standing in the community of the Corporation and/or any of the Corporation Related Parties. The Corporation agrees that during the course of Employee’s employment or at any time thereafter, it shall refrain from (i) all conduct, verbal or otherwise, which would materially damage the reputation, goodwill or standing in the community of the Employee and (ii) referring to or in any way commenting on the Employee in or through the general media or any public domain (including without limitation, internet websites, blogs, chat rooms and the like), which would materially damage, the reputation, goodwill or standing in the community of the Employee.

10. 

NOTICES

Any notice or other communication under this Agreement shall be in writing and shall be deemed to have been given: (i) when delivered personally against receipt therefor, (ii) one (1) day after being sent by Federal Express or similar overnight delivery, (iii) three (3) days after being mailed registered or certified mail, postage prepaid, return receipt requested, to the Corporation at the address set forth above and to the Employee at the officers of the Corporation with a copy sent to the Employee’s home address set forth in the Corporation’s records, or to such other address as such party shall give by notice hereunder to the other party, or (iv) in the case of transmittal by electronic mail, upon receipt by the sender of electronic confirmation of such transmittal.

11. 

SEVERABILITY OF PROVISIONS

If any provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced in whole or in part, such provision shall be interpreted so as to remain enforceable to the maximum extent permissible consistent with applicable law and the parties’ intent and the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provision shall be deemed dependent upon any other covenant or provision unless so expressed herein.

12. 

ENTIRE AGREEMENT MODIFICATION

This Agreement contains the entire agreement of the parties relating to the subject matter hereof, and the parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement that are not set forth herein. No modification of this Agreement shall be valid unless made in writing and signed by the parties hereto.

 

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13. 

BINDING EFFECT

The rights, benefits, duties and obligations under this Agreement shall inure to, and be binding upon, the Corporation, its successors and assigns, and upon Employee and his legal representatives. This Agreement constitutes a personal service agreement, and the performance of Employee’s obligations hereunder may not be transferred or assigned by Employee. This Agreement cannot be assigned by Corporation without the written consent of Employee except that this Agreement may be assigned to an affiliated entity of the Corporation.

14. 

NON-WAIVER

The failure of either party to insist upon the strict performance of any of the terms, conditions and provisions of this Agreement shall not be construed as a waiver or relinquishment of future compliance therewith, and said terms, conditions and provisions shall remain in full force and effect. No waiver of any term or condition of this Agreement on the part of either party shall be effective for any purpose whatsoever unless such waiver is in writing and signed by such party.

15. 

GOVERNING LAW, DISPUTE RESOLUTION

This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of North Carolina of the United States of America without regard to principles of conflict of laws. The State of North Carolina shall be the exclusive jurisdiction for any disputes arising under this Agreement and the parties hereby consent to such jurisdiction.

16. 

HEADINGS

The headings of paragraphs are inserted for convenience and shall not affect any interpretation of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the Effective Date.

Corporation:

HEAT BIOLOGICS, INC.

 

			
	By: 

	/s/ Jeff Wolf

	 

	 
	Name: Jeff Wolf

	 

	 
	Title: Chief Executive Officer

	 

Employee: 

		
	/s/ Taylor Schreiber

	 

	TAYLOR SCHREIBER, M.D., PH.D.

	 

8ex-10_1.htm - Generated by SEC Publisher for SEC Filing

 

EXECUTIVE EMPLOYMENT
AGREEMENT

 

This Executive Employment Agreement (the “Agreement”)
is made as of September 1st, 2013, between Indoor Harvest, Corp., (the
"Company") and Chad C. Sykes (the "Executive").

1. Terms of Employment

 

(a) Position. Company hereby employs the Executive as
Chief Executive Officer, and the Executive accepts such employment with Company
subject to the terms and conditions of this Agreement.

 

(b) Duties. Executive shall have such duties and
responsibilities as may be assigned by the Board of Directors not inconsistent
with the position.

 

(c) Dedication. Executive shall devote his full
business time and best efforts to the business and affairs of the Company.

 

(d) Performance. Executive shall faithfully and
diligently perform Executive’s duties in conformity with the directions of the
Company and serve the Company to the best of Executive’s abilities.

 

(e) Permitted Activities. Executive may:

 

(i)     serve on industry, trade, civic or charitable
boards or committees;

(ii)    engage in charitable
activities and community affairs; and

(iii)  manage personal investments, as long as such
activities do not materially interfere with the performance of Executive's
duties and responsibilities.

 

2. Compensation

 

(a) Base
Salary

(i)       Salary.
Executive shall receive a base salary in the amount of $70,0000 ("Base
Salary").

(ii)      Payment.
The Base Salary shall be payable in accordance with the customary payroll
practices of the Company, but in no event less frequently than monthly.

(iii)    Adjustments.
The Base Salary may be increased, or decreased, from time to time during the
term of this Agreement in the sole discretion of the Board of Directors based
on the Company's ability to pay.

(b) Incentive
Compensation. During the term of employment, the Executive shall be
eligible to participate in any equity-based incentive compensation plan or
program adopted by the Board of Directors.

 

 

 

 

 

3. Expenses

(a) Reimbursement.
Company shall pay all reasonable travel, dining and other ordinary, necessary
and reasonable business expenses incurred by the Executive in the performance
of his duties under this Agreement, subject to budget and/or other limitations
or conditions imposed by the Board of Directors.

(b) Substantiation.
The Executive shall, as a condition of any such payment or reimbursement,
submit verification, substantiation and documentation of the nature and amount
of such expenses in accordance with the policies of Company from time to time.

4.
Vacation.

(a) Entitlement.
The Executive shall be entitled to two weeks (14 Days) of vacation leave each
year during the term of this Agreement without any deduction in his
compensation, and at such times within each year as the Executive may
determine, taking into account Company's schedule and the Executive's duties
relative thereto, such vacation leave which shall be forfeited at the end of
each year if not fully utilized in that year.

(b) Vacation
Benefits upon Termination. Upon the termination or expiration of the
Executive's employment by Company under this Agreement, the Executive shall not
be entitled to compensation for any unutilized vacation leave.

5.
Representations and Warranties.
 

The
Company and the Executive respectively represents and warrants to each other
that each respectively is fully authorized and empowered to enter into the
Agreement and that their entering into the Agreement and to each parties'
knowledge the performance of their respective obligations under the Agreement
will not violate any agreement between the Company or the Executive
respectively and any other person, firm or organization or any law or
governmental regulation.

6. Confidential
Information

(a) Obligation.
The Executive agrees to maintain the strict confidentiality of all Confidential
Information during the term of this Agreement and thereafter.

(b) Scope.
For purposes of this Agreement, "Confidential Information" shall mean
all information and materials of Company, and all information and materials
received by Company from third parties (including but not limited to
affiliates, subsidiaries, chapters, and members of Company), which are not
generally publicly available and all other information and materials which are
of a proprietary or confidential nature, even if they are not marked as such.

(c) Survival.
This provision shall survive the termination of this Agreement indefinitely.

7. Intellectual
Property

(a) Ownership.
Executive agrees that  all copyrights, trademarks, patents, and other
intellectual property rights to works or marks arising in from or in connection
with the Executive's employment by Company are
"work made for hire" within the definition of Section 101 of the
Copyright Act (17 U.S.C. 101) and shall remain the sole and exclusive property
of Company.

 

 

 

(c) Assignment
of Interest. To the extent any work product is not deemed to be a work made
for hire within the definition of the Copyright Act, Executive with effect from
creation of any and all work product, hereby assigns, and agrees to assign, to
Company all right, title and interest in and to such work product, including
but not limited to copyright, all rights subsumed thereunder, and all other
intellectual property rights, including all extensions and renewals thereof.

(d) Moral
Rights. Executive also agrees to waive any and all moral rights relating to
the work product, including but not limited to, any and all rights of
identification of authorship and any and all rights of approval, restriction or
limitation on use, and subsequent modifications.

(e) Assistance.
Executive further agrees to provide all assistance reasonably requested by
Company, both during and subsequent to the Term of this Agreement, in the
establishment, preservation and enforcement of Company's rights in the work
product.

(f) Return
of Property. Upon the termination of this Agreement, Executive agrees to
deliver promptly to Company all printed, electronic, audio-visual, and other
tangible manifestations of work product, including all originals and copies
thereof.

8. Non-Competition

(a) Restrictions.
During the term of this Agreement and for a period of 5 years immediately
following the termination of this Agreement, Executive shall not, directly or
indirectly, without the prior written consent Company, own, manage, operate,
join, control, finance or participate in the ownership, management, operation,
control or financing of, or be connected as an officer, director, employee,
partner, principal, agent, representative, or consultant of any Entity engaged
in the Restricted Business.

(b) Exceptions.
Executive shall not be deemed to be in contravention of the foregoing if
Employee participates as a passive investor holding up to 1% of the equity
securities of an Entity engaged in the Restricted Business, which securities
are publicly traded.

9. Non-Solicitation. 

During
the term of this Agreement and for 5 years after any termination of this
Agreement, Executive will not, without the prior written consent of the
Company, either directly or indirectly, on Executives' own behalf or in the
service or on behalf of others, solicit or attempt to solicit, divert or hire
away any person employed by the Company, or any customer of the Company.

10. Non-Disparagement. 

(a) Executive
Obligation. Executive will not at any time, during or after the
Term, disparage, defame or denigrate the reputation, character, image, products
or services of the Company, or of any of its Affiliates, or, any of its or its
Affiliate s directors, officers, stockholders, members, employees or agents.

(b) Company
Obligation. The Company will not, except as may be required by law, issue
any official press release or statement which is intended to disparage
Executive.

 

 

 

11. Acknowledgement. 

Executive
expressly acknowledges that the covenants of this Agreement are supported by
good and adequate consideration, and that such covenants are reasonable and
necessary in terms of duration, scope and geographic area to protect the
legitimate business interests of Company.

12.
Term of Employment

(a)
Initial Term. The
term of the Executive's employment under this Agreement shall commence on the
Effective Date and continue until September 1st, 2014 (the "Term"),
unless his employment is sooner terminated by the Board of Directors.

(b)
Automatic Renewal. Commencing
on September 1st and on each anniversary of that date thereafter, the Term
shall be extended for an additional one year period.

(c)
Notice Not to Renew.
Either party may give notice of the intention not to extend the Term in writing
at least 90 days prior to each such anniversary date.

13.
Termination of Employment

(a)
Termination Upon Death. This
Agreement shall terminate automatically upon the death of the Executive.

(b)
Automatic Termination Upon Disability.
This Agreement shall terminate automatically upon Total Disability of the
Executive.

Total
Disability.
Total Disability means the Executive is unable to perform the duties set forth
in this Agreement for a period of twelve consecutive weeks, or 90 cumulative
business days in any 12-month period, as a result of physical or mental illness
or loss of legal capacity.

(c)
Termination Upon Retirement. The
Executive may voluntarily terminate this Agreement at any time by reason of
Retirement. 

Retirement. Retirement is the cessation
by Executive of all full-time employment of any kind.

(d)
Termination by the Company For Cause. The
Company shall have the right to terminate Executive's employment under this
Agreement at any time for Cause, which termination shall be effective
immediately. Termination for "Cause" shall include termination for:

(i)      material
breach of this Agreement by Executive;

(ii)    intentional
nonperformance or misperformance of such duties, or refusal to abide by or
comply with the reasonable directives of his superior officers, or the
Corporation's policies and procedures;

(iii)   Executive's
gross negligence in the performance of his material duties under this
Agreement;

(iv)   Executive's
willful dishonesty, fraud or misconduct with respect to the business or affairs
of the Corporation, that in the reasonable judgment of the President and/or the
Board of Directors materially and adversely affects the Corporation;

 

 

 

(v)     Executive's
conviction of, or a plea of nolo contendere to, a felony or other crime
involving moral turpitude; or

(vi)   the
commission of any act in direct or indirect competition with or materially
detrimental to the best interests of Corporation that is in breach of Executive
s fiduciary duties of care, loyalty and good faith to Corporation.

Cause
will not, however, include any actions or circumstances constituting Cause
under (i) or (ii) above if Executive cures such actions or circumstances within
30 days of receipt of written notice from Corporation setting forth the actions
or circumstances constituting Cause. In the event Executive's employment under
this Agreement is terminated for Cause, Executive shall thereafter have no
right to receive compensation or other benefits under this Agreement.

(e)
Termination by the Company Without Cause. The Company may, upon a majority vote of the
Board of Directors, terminate the Executive's employment under this Agreement
without Cause at any time upon 90 days prior written notice to the Executive.

(f)
Termination Upon a Change in Control. If the Executive's employment is terminated by the
Company without Cause or by the Executive for Good Reason in connection with or
within one year after Change in Control, the Executive shall be entitled to
Severance Benefits as stated in the Termination Benefits section.

(g)
Change in Control. For
purposes of this Agreement, unless the Board determines otherwise, a Change of
Control of the Company shall be deemed to have occurred at such time as:

(i)       any
person (as the term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the Exchange Act)) is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of voting securities of the Company representing more than 50% of
the Company s outstanding voting securities or rights to acquire such
securities except for any voting securities issued or purchased under any
employee benefit plan of the Company or its subsidiaries; or

(ii)      any
sale, lease, exchange or other transfer (in one transaction or a series of
transactions) of all or substantially all of the assets of the Company; or

(iii)    a
plan of liquidation of the Company or an agreement for the sale or liquidation
of the Company is approved and completed; or

(iv)     the
Board determines in its sole discretion that a Change in Control has occurred,
whether or not any event described above has occurred or is contemplated.

14.
Indemnification.  

The
Company shall indemnify the Executive, to the maximum extent permitted by
applicable law and by its certificate of incorporation, against all costs,
charges and expenses incurred or sustained by the Executive in connection with
any action, suit or proceeding to which he may be made a party by reason of
being an officer, director or employee of the Company or of any subsidiary or
affiliate of the Company or any other corporation for which the Executive
serves in good faith as an officer, director, or employee at the Company's
request.

 

 

 

15. General Provisions

 

(a) Entire Agreement.
This Agreement constitutes the entire agreement between the parties, and
supersedes all prior agreements, representations and understandings of the
parties, written or oral.

(b) Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed
to be an original, but all of which, taken together, shall constitute one and
the same agreement.

(c) Amendment.
This Agreement may be amended only by written agreement of the parties.

(d) Notices.
All notices permitted or required under this Agreement shall be in writing and
shall be delivered in person or mailed by first class, registered or certified
mail, postage prepaid, to the address of the party specified in this Agreement
or such other address as either party may specify in writing. Such notice shall
be deemed to have been given upon receipt.

(e) Assignment.
This Agreement shall not be assigned by either party without the consent of the
other party.

(f) Governing Law.
This Agreement shall be governed by and construed in accordance with the laws
of the State of Texas, without regard to its conflict of laws rules.

(g) No Waiver of Rights. A failure or delay in exercising any right,
power or privilege in respect of this Agreement will not be presumed to operate
as a waiver, and a single or partial exercise of any right, power or privilege
will not be presumed to preclude any subsequent or further exercise, of that
right, power or privilege or the exercise of any other right, power or
privilege.

 

IN
WITNESS WHEREOF,
this Agreement has been duly executed this 1st day of September, 2013.

 

	
  EXECUTIVE

  
	
   

  
	
  __/s/
  Chad Sykes____________

  
	
  Signature

  
	
   

  
	
  Date:
  __9-1-2013____________

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