Document:

cicn_ex1018.htm

    
      Exhibit
10.18

      
        
 

      

      EMPLOYMENT
AGREEMENT

      

      

      This
Employment Agreement (the “Agreement”) is made and entered into this __ day of
January, 2010, by and between CICERO INC, a Delaware corporation (the
“Company”), and Antony Castagno, a resident of the State of Georgia (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 Georgia or North
      Carolina at the discretion of the Company.  Employee’s title
      will be Chief Technology Officer and Employee will report directly to the
      Chief Executive Officer.  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
      Technology Officer.  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 (“Policies”).  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.

              

      

      

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      Exhibit 10.18

       

      
        	
                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.  Subject to the provisions of
      Section 4, this Agreement will cover the period January __, 2010 through
      December 31, 2010 and thereafter successive annual periods unless a party
      provides the other with written notice of its intention to terminate this
      Agreement, which notice shall be delivered no later than thirty (30) days
      prior to the expiration of the initial term or any renewal term, as
      applicable.

              

      

      

      
        	
                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
      improperly performs, or fails to perform, his duties and responsibilities
      or materially breaches any of the terms or conditions set forth in this
      Agreement, a Policy, or invention assignment, confidentiality,
      non-solicitation or non-competition agreement with or for the benefit of
      the Company, SOAdesk, LLC (“SOAdesk”) or Vertical Thought, Inc. (“VTI”)
      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 or of provisions of such
      Policies or agreements relating to any
thereof);

                

        

      

       

      
        	
                (ii)  

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

              

      

      

      
        	
                (iii)  

              	
                Employee
      engages in willful misconduct, including fraud or intentional
      misrepresentation;

              

      

      

      
        	
                (iii)  

              	
                Employee
      engages in dishonest activities or commits or is convicted of, or pleads
      guilty or nolo contendere to, any felony or a misdemeanor involving fraud,
      deceit, moral turpitude or unethical business
  conduct;

              

      

      

      
        	
                (iv)  

              	
                Employee
      engages in habitual alcohol or drug abuse that continues after written
      notice from the Company, which abuse has (a) had an adverse effect on
      Employee’s productivity or ability to carry out his duties under this
      Agreement, (b) jeopardized the safety of any other employee of the Company
      or any person having business relations with the Company, (c) damaged the
      reputation of the Company, or (d) endangered the Company’s ability to
      compete for business; or

              

      

      

      
        	
                 
      

              	
                (v)

              	
                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.

              

      

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      Exhibit 10.18

       

      
        	
                 
      

              	
                (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, and subject to the execution by
      Employee and effectiveness of a customary release in a form reasonably
      satisfactory to the Company, the Company shall be obligated to pay
      Employee severance payments equal to six (6) months of Employee’s then
      base salary in the aggregate.  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.  The
      foregoing severance and other payments shall be payable (subject to the
      effectiveness of such customary release) in equal semi-monthly
      installments over the six (6) month period following Employee’s
      termination in accordance with the Company’s standard payroll practices.
      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.

              

      

       

      
        
          	
                  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 Fifty Thousand Dollars
      ($150,000.00) per annum in equal semi-monthly
  installments.

              

      

      

      
        	
                 
      

              	
                (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.

              

      

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      Exhibit 10.18

       

      
        	
                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,
      including for purposes of this Section 10 any of the same purchased from
      SOAdesk or VTI, 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 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;
      provided, that clauses (i) through (iv) shall not be available for Trade
      Secrets of or purchased from SOAdesk or VTI.  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.

              

      

      

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      Exhibit
10.18

       

      
        	
                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 or SOAdesk 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 or SOAdesk as a prospective client, and
      (ii) with whom Employee had material contact while employed by or
      providing services to or for the benefit of the Company, SOAdesk or VTI to
      provide similar services or products as such provided by Employee for the
      Company, SOAdesk or VTI 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, SOAdesk or VTI, any person
      employed by the Company for whom Employee had supervisory responsibility
      or with whom Employee had material contact while employed by or providing
      services to or for the benefit of the Company, SOAdesk or VTI, 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, SOAdesk or VTI; (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, SOAdesk or VTI providing Employee with confidential Client
      information, including but not limited to the Client’s identify, for
      purposes of furthering a business
  relationship.  

              

      

      

      
        	
                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.

              

      

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      Exhibit 10.18

       

      
        	
                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.  

                 

                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 has
      had access during and by virtue of Employee's employment by the Company or
      providing services to or for the benefit of SOAdesk or VTI or which arises
      out of work assigned to Employee by the Company, SOAdesk or
      VTI.  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, SOAdesk or VTI.  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, except if conceived while
      providing service to or for the benefit of SOAdesk or
      VTI.  Employee agrees that any such Invention is set forth on
      Exhibit “A” to this Agreement.

              

      

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      Exhibit 10.18

       

      
        	
                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 North
      Carolina.  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, 13, 14, 15 and 18 of this
      Agreement shall survive termination of this
  Agreement.

              

      

      

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

Exhibit 10.18

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

      

       

      
        	COMPANY:	EMPLOYEE:
	 	 
	CICERO,
    INC.	 
	 	 
	 By:  ____________________________	 
	 	______________________________________ 
	Name:___________________________	Antony
      Castagno
	 	 
	Title:____________________________  	 
	 	 

      

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      Exhibit
10.18

       

      EXHIBIT
A 

       

      INVENTIONS

      

      

       

      Employee represents that there are no
Inventions.

      

      

      

      _________________

      Employee Initials

       

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      
        Exhibit
10.18

      

      
 

      EXHIBIT
B

      

      EXISTING RESTRICTIVE
COVENANTS

      

       

       

      
 

      Employee
Non-Disclosure, Non-Solicitation, Non-Competition and Assignment Agreement,
dated as of June 17, 2005, by and between Tony Castagno and OpenSpan,
Inc.

       

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      
        Exhibit
10.18

      

      EXHIBIT
C

      

      VARIABLE
COMPENSATION

      

      

      
 

      For Fiscal
2010:

      

      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 as per the chart below:

       

      
        
          	Operating
      Net Income Range (before tax)	 	
                   

                	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 
	 
      	 	
                  From

                	 	 	
                  To

                	 	
                  Variable
      Compensation

                	 
	 
      	 	
                  Less
      than $2,500,000

                	 	 	 	 	 	
                  None

                	 
	
                  Tier
      1

                	 	$	2,500,000	 	 	$	2,999,999	 	 	$	75,000	 
	
                  Tier
      2

                	 	$	3,000,000	 	 	$	4,999,999	 	 	$	150,000	 
	
                  Tier
      3

                	 	
                  >
      $5,000,000

                	 	 	 	 	 	 	$	250,000	 

        

         

        
          Performance
significantly in excess of Tier 3 may result in an additional reward at the
discretion
of the Compensation Committee 

             

            
              
                 

              

              
                11Unassociated Document

Exhibit 10.4

 

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 10.4

 

	
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 10.4

 

	
  

	
(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

  

3

  

Exhibit 10.4

 

	
  

	
(iii)

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

	
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.

  

4

  

Exhibit 10.4

 

	
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 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 10.4

 

	
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.  

 

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.

 

  

6

  

Exhibit 10.4

 

	
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.

  

7

  

Exhibit 10.4

 

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:____________________________  	 
	 	 

  

8

  

Exhibit 10.4

EXHIBIT A

INVENTIONS

Employee represents that there are no Inventions.

_______________________

Employee Initials

 

 

  

9

  

Exhibit 10.4

EXHIBIT B

EXISTING RESTRICTIVE COVENANTS

  

10

  

Exhibit 10.4

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	 

  

11

  

Exhibit 10.4

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.

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

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