Document:

ex_4-07.htm

    
      
         

      

      
         

        
          

          

        

      

      Form S-8

    

     

    
      Exhibit
4.07

    SILICON
IMAGE, INC.

    NON-PLAN STOCK OPTION
AGREEMENT

    (INDUCEMENT
STOCK OPTION AWARD)

    

    This Non-Plan Stock Option Agreement
(this “Agreement”)
is made and entered into as of the date of grant set forth below (the “Date of
Grant”) by and between Silicon Image, Inc., a Delaware corporation (the
“Company”),
and the optionee named below (“Optionee”).  Capitalized
terms not defined herein shall have the meaning ascribed to them in the
Company’s 2008 Equity Incentive Plan (the “Plan”).  This
Option (as defined below) is granted pursuant to Nasdaq Marketplace Rule
5635(c)(4).

     

    Optionee:                                                       Camillo
Martino                                                                                         

    Total Option
Shares:                                  1,000,000                                       

    Exercise Price Per
Share:                        
$2.79                                                

    Date of
Grant:                                              
January 15,
2010                             

    First Vesting
Date:                                     
January 1,
2011                             

    Expiration
Date:                                          
January 14,
2020                             

    Type of Stock
Option:                                
Non-Qualified Stock Option

    

    1.           Grant of Option.  The
Company hereby grants to Optionee an option (this “Option”)
to purchase up to the total number of shares of common stock of the Company
(“Common
Stock”), set forth above (collectively, the “Shares”)
at the Exercise Price Per Share set forth above (the “Exercise
Price”), subject to all of the terms and conditions of this
Agreement.

    

    2.           Vesting;
Exercise Period.

    

    2.1           Vesting of Shares.
 This Option shall
be exercisable as it vests and shall not be exercisable with respect to any of
the Shares until the First Vesting Date.  Subject to the terms and
conditions of this Agreement, provided that Optionee has continuously provided
services to the Company, or any Parent or Subsidiary of the Company from the
Date of Grant through and including the applicable vesting date, then this
Option shall vest and become exercisable as follows:  (a) as to ten
percent (10%) of the Shares on the First Vesting Date; (b)  as to an
additional twenty percent (20%) of the Shares on the first anniversary of the
First Vesting Date; (c) as to an additional thirty percent (30%) of the Shares
on the second anniversary of the First Vesting Date; and (d) as to an additional
forty percent (40%) of the Shares on the third anniversary of the First Vesting
Date, such that this Option will be fully vested and exercisable on January 1,
2014.  This Option shall cease to vest upon Optionee’s Termination,
and Optionee shall in no event be entitled under this Option to purchase a
number of shares of the Company’s Common Stock greater than the Total Option
Shares.

    

    2.2           Expiration.  This
Option shall expire on the Expiration Date set forth above and must be
exercised, if at all, on or before the earlier of the Expiration Date or the
date on which this Option is earlier terminated in accordance with the
provisions of Section 3.

    

    3.           Termination.

    

    3.1           Termination for Any Reason Except Death,
Disability or Cause.  If Optionee is Terminated for any reason
except Optionee’s death, Disability or Cause (as such term is defined in the
Offer Letter of employment between the Company and Optionee dated December 23,
2009), then this Option, to the extent (and only to the extent) that it is
vested in accordance with the schedule set forth in Section 2.1 of this
Agreement on the Termination Date, may be exercised by Optionee no later than
three (3) months after the Termination Date, but in no event later than the
Expiration Date.

    

    3.2           Termination Because of Death
or Disability.  If Optionee is Terminated because of Death or
Disability of Optionee (or the Optionee dies within three (3) months after
Termination other than for Disability or Cause), then this Option, to the extent
that it is vested in accordance with the schedule set forth in Section 2.1 of
this Agreement on the Termination Date, may be exercised by Optionee (or
Optionee’s legal representative or authorized assignee) no later than twelve
(12) months after the Termination Date, but in no event later than the
Expiration Date.

    

    3.3           Termination for
Cause.  If Optionee is Terminated for Cause, this Option will
expire on the Optionee’s Termination Date.

    

    3.4           No Obligation to Employ.  Nothing
in this Agreement shall confer on Optionee any right to continue in the employ
of, or other relationship with, the Company or any Parent or Subsidiary of the
Company, or limit in any way the right of the Company or any Parent or
Subsidiary of the Company to terminate Optionee’s employment or other
relationship at any time, with or without Cause.

    

    
      
        
        

      

      
        
        

        
        

        
          

          

        

      

      
        
        

      

    

     

            4.           Manner of Exercise.

    

    4.1           Stock Option Exercise Agreement.  To
exercise this Option, Optionee (or in the case of exercise after Optionee’s
death, Optionee’s legal representative or authorized assignee) must deliver to
the Company an executed stock option exercise agreement in the form attached
hereto as Exhibit A, or in
such other form as may be approved by the Company from time to time (the “Exercise
Agreement”), which shall set forth, inter alia, Optionee’s
election to exercise this Option, the number of Shares being purchased, any
restrictions imposed on the Shares and any representations, warranties and
agreements regarding Optionee’s investment intent and access to information as
may be required by the Company to comply with applicable securities
laws.  If someone other than Optionee exercises this Option, then such
person must submit documentation reasonably acceptable to the Company that such
person has the right to exercise this Option.

    

    4.2           Limitations on Exercise.  This
Option may not be exercised unless such exercise is in compliance with all
applicable federal and state securities laws, as they are in effect on the date
of exercise.  This Option may not be exercised for less than 100
Shares, unless it is exercised as to all Shares then exercisable.

    

    4.3           Payment.  The
Exercise Agreement shall be accompanied by full payment of the Exercise Price
for the Shares being purchased.  Payment may be in the form of cash
(by check), or where permitted by law:

    

    (a)           by
cancellation of indebtedness of the Company to the Optionee;

    

    (b)           by
surrender of shares of the Company’s Common Stock that: (A) either (1) have been
paid for within the meaning of SEC Rule 144 (and, if such shares were purchased
from the Company by use of a promissory note, such note has been fully paid with
respect to such shares); or (2) were obtained by Optionee in the open public
market; and (B) are clear of all liens, claims, encumbrances or security
interests;

    

    (c)           by
waiver of compensation due or accrued to Optionee for services
rendered;

    

    (d)           provided
that a public market for the Company’s stock exists:  (1) through a
“same day sale” commitment from Optionee and a broker-dealer that is a member of
the Financial Industry Regulatory Authority (a “Dealer”),
whereby Optionee irrevocably elects to exercise this Option and to sell a
portion of the Shares so purchased to pay for the Exercise Price and whereby the
Dealer irrevocably commits upon receipt of such Shares to forward the exercise
price directly to the Company; or (2) through a “margin” commitment from
Optionee and a Dealer, whereby Optionee irrevocably elects to exercise this
Option and to pledge the Shares so purchased to the Dealer in a margin account
as security for a loan from the Dealer in the amount of the Exercise Price, and
whereby the Dealer irrevocably commits upon receipt of such Shares to forward
the Exercise Price directly to the Company; or

    

    (f)           by
any combination of the foregoing.

    

    4.4           Tax Withholding.  Prior
to the issuance of the Shares upon exercise of this Option, Optionee must pay or
provide for any applicable federal or state withholding obligations of the
Company.  If the Committee permits, Optionee may provide for payment
of withholding taxes upon exercise of this Option by requesting that the Company
retain Shares with a Fair Market Value equal to the minimum amount of taxes
required to be withheld.  In such case, the Company shall issue the
net number of Shares to the Optionee by deducting the Shares retained from the
Shares issuable upon exercise.

    

    4.5           Issuance of Shares.  Provided
that the Exercise Agreement and payment are in form and substance satisfactory
to counsel for the Company, the Company shall issue the Shares registered in the
name of Optionee, Optionee’s authorized assignee, or Optionee’s legal
representative, and shall deliver certificates representing the
Shares.

    

    5.           Compliance with Laws and Regulations.  The exercise of
this Option and the issuance and transfer of Shares shall be subject to
compliance by the Company and Optionee with all applicable requirements of
federal and state securities laws and with all applicable requirements of any
stock exchange on which the Company’s Common Stock may be listed at the time of
such issuance or transfer.  Optionee understands that the Company is
under no obligation to register or qualify the Shares with the Securities and
Exchange Commission (“SEC”), any
state securities commission or any stock exchange to effect such
compliance.

     

     

    
      
        
        

      

      
        
        

        
        

        
          

          

        

      

      
        
        

      

    

    
 

    6.           Nontransferability of Option.  This Option may
not be transferred in any manner other than by will or by the laws of descent
and distribution and may be exercised during the lifetime of Optionee only by
Optionee or Optionee’s legal representative and after Optionee’s death by the
legal representative of Optionee’s heirs or legatees.  The terms of
this Option shall be binding upon the legal representative or authorized
assignee of Optionee.

    

    7.           Tax Consequences.  Set forth below
is a brief summary of some of the federal and California tax consequences of
exercise of this Option and disposition of the Shares.  THIS SUMMARY
IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE.  OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES.

    

    7.1           Exercise of Nonqualified Stock Option.  There
may be a regular federal and California income tax liability upon the exercise
of this Option.  Optionee will be treated as having received
compensation (taxable at ordinary income tax rates) equal to the excess, if any,
of the fair market value of the Shares on the date of exercise over the Exercise
Price.  The Company will be required to withhold from Optionee’s
compensation or collect from Optionee and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation at the time of
exercise.

    

    7.2           Disposition of Shares.  If
the Shares are held for more than twelve (12) months after the date of the
transfer of the Shares pursuant to the exercise of an NQSO, any gain realized on
disposition of the Shares will be treated as long-term capital gain, as the case
may be.

    

    8.           Privileges of Stock Ownership.  Optionee shall
not have any of the rights of a stockholder with respect to any Shares until the
Shares are issued to Optionee.  After Shares are issued to Optionee,
Optionee will be a stockholder and have all the rights of a stockholder with
respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares.

    

    9.           Interpretation.  Any dispute
regarding the interpretation of this Agreement shall be submitted by Optionee or
the Company to the Committee for review.  The resolution of such a
dispute by the Committee shall be final and binding on the Company and
Optionee.

    

    10.           Entire Agreement.  This Agreement
and the Exercise Agreement constitute the entire agreement and understanding of
the parties hereto with respect to the subject matter hereof and supersede all
prior understandings and agreements with respect to such subject
matter.

    

    11.           Notices.  Any notice
required to be given or delivered to the Company under the terms of this
Agreement shall be in writing and addressed to the Corporate Secretary of the
Company at its principal corporate offices.  Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated above or to such other address as such party may designate
in writing from time to time to the Company.  All notices shall be
deemed to have been given or delivered upon:  personal delivery; three
(3) days after deposit in the United States mail by certified or registered mail
(return receipt requested); one (1) business day after deposit with any return
receipt express courier (prepaid); or one (1) business day after transmission
via electronic means.

    

    12.           Successors and Assigns.  The Company may
assign any of its rights under this Agreement.  This Agreement shall
be binding upon and inure to the benefit of the successors and assigns of the
Company.  Subject to the restrictions on transfer set forth herein,
this Agreement shall be binding upon Optionee and Optionee’s legal
representatives or authorized assignee.

    

    13.           Governing Law.  This Agreement
shall be governed by and construed in accordance with the internal laws of the
State of California, without regard to that body of law pertaining to choice of
law or conflict of law.

     

     

    
      
        
        

      

      
        
        

        
        

        
          

          

        

      

      
        
        

      

    

     

    
 

    14.           Acceptance.  Optionee hereby
acknowledges receipt of a copy of this Agreement.  Optionee has read
and understands the terms and provisions thereof, and accepts this Option
subject to all the terms and conditions of this Agreement.  Optionee
acknowledges that there may be adverse tax consequences upon exercise of this
Option or disposition of the Shares and that the Company has advised Optionee to
consult a tax advisor prior to such exercise or disposition.

    

    15.           Modification,
Extension or Renewal.  The Committee may
modify, extend or renew this Option and authorize the grant of new options in
substitution therefor, provided that any such action may not, without the
written consent of the Optionee, impair any of such Optionee’s rights under this
Option.  The Committee may reduce the Exercise Price of this Option
without the consent of the Optionee affected by a written notice to the
Optionee; provided, however, that the
Exercise Price may not be reduced below the Fair Market Value of the Shares on
the date the action is taken to reduce the exercise price.

    

    16.           Certificates.  All certificates
for Shares or other securities delivered upon exercise of this Option will be
subject to such stock transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.

    

    17.           Adjustment
of Shares.  If the number of
outstanding shares is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company, without consideration,
then the Exercise Price of and the number of Shares subject to this Option shall
be proportionately adjusted, subject to any required action by the Board or the
Optionee and compliance with applicable securities laws; provided, however, that
fractions of a Share will not be issued.

    

    18.           Corporate
Transactions.  In the event of a
Corporate Transaction, this Option may be assumed or replaced by the successor
corporation, which assumption or replacement shall be binding on the
Optionee.  In the alternative, the successor corporation may
substitute an equivalent award or provide substantially similar consideration to
the Optionee as was provided to stockholders (after taking into account the
existing provisions of this Option).  In the event such successor or
acquiring corporation (if any) refuses to assume, convert, replace or substitute
this Option, as provided above, pursuant to a Corporate Transaction, then
notwithstanding any other provision in this Agreement to the contrary, this
Option will expire on such transaction at such time and on such conditions as
the Board will determine; the Board (or, the Committee, if so designated by the
Board) may, in its sole discretion, accelerate the vesting of this Option in
connection with a Corporate Transaction.  In addition, in the event
such successor or acquiring corporation (if any) refuses to assume, convert,
replace or substitute this Option, as provided above, pursuant to a Corporate
Transaction, the Committee will notify the Optionee in writing or electronically
that this Option will be exercisable for a period of time determined by the
Committee in its sole discretion, and this Option will terminate upon the
expiration of such period.  This Option need not be treated similarly
to other Awards in a Corporate Transaction.

    

    19.           REPRICING;
EXCHANGE AND BUYOUT OF OPTION.  Except in connection with a (i)
Corporate Transaction or (ii) a stock dividend, recapitalization, stock split,
reverse stock split, subdivision,  combination, reclassification or
similar change in the capital structure of the Company without consideration,
the terms of this Option may not be amended to reduce the Exercise Price or
cancel this Option in exchange for cash or other Awards (including Options or
SARs) with an exercise price that is less than the Exercise Price without prior
stockholder approval.

     

    

    20.           Amendment
or Termination of the Agreement.  The Board may at
any time terminate or amend this Agreement in any respect; provided, however, that the
Board will not, without the approval of the Optionee, amend this Agreement in
any manner that requires Optionee’s approval.

    

     

    

    IN WITNESS WHEREOF, the
Company has caused this Agreement to be executed in duplicate by its duly
authorized representative and Optionee has executed this Agreement in duplicate
as of the Date of Grant.

    

    SILICON
IMAGE,
INC.                                                                            CAMILLO
MARTINO, OPTIONEE

    

     

    By:  /s/ Edward
Lopez                                                                             
By: /s/ Camillo Martino

           
Edward Lopez

           
Chief Legal Officer

      

      
        
          
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    EXHIBIT A

    

    

    SILICON
IMAGE, INC.

    NON-PLAN STOCK OPTION
EXERCISE AGREEMENT

    

     

    
      	
               
      

            	
              You
      must submit this form to Stock Administration prior to contacting your
      broker.

            

    

    

    

    I am
exercising my vested Silicon Image, Inc. Non-Qualified stock options as
follows:

    

    (A) Total
# of Shares to
Exercise:                                                                                     

    

    (B) Cost
per
Share:  $                                                                

    

    (C) Total
Exercise Cost (A) X
(B):  $                                                                                     

    

    (D) Tax
Amount Due for Non-Qualified stock options:
$                                                                                                                     

     

    Please
leave tax amount blank – Stock Administration will calculate.

    

    (E)
Exercise
Date:                                                      

    Please leave exercise date
blank – Stock
Administration will complete.

    

    Please
indicate the transaction method below.  See reverse side of this form
for a brief explanation of each method.

    

              Method
1                                           SAME DAY
SALE  You must contact a Silicon Image designated broker to
place this trade.

    Please
indicate which broker you have selected below.

    

              Method
2                                           SELL TO
COVER I am
exercising                                                                           
shares, but want to sell only  
shares.

    The
balance will be deposited in the account I’ve designated below.  You
must contact a Silicon

    Image
designated broker to place this trade.  Please indicate which broker
you have selected

    below.

    

              Method
3                                           EXERCISE
& HOLD  Please attach a personal check, made payable to
Silicon Image for the

    amounts
indicated in items (D) and (F) above.  Please indicate below where you
would like your

    stock
certificate to be mailed.

    

    Broker
Name                                

    

    Broker
Address                                

    

                    Account
#                      

    

    

    

              E*Trade/OptionsLink                                                                Account
#                                           (Executive
Services)

              Deutsche
Bank Alex
Brown                                                      Account
#                                           

    

    

     

    
      
        
        

      

      
        
        

        
        

        
          

          

        

      

      
        
        

      

    

     

        I authorize
the broker to remit funds to Silicon Image to pay for this exercise and any
applicable taxes and I understand that the shares will be sent directly to the
broker address I have indicated above.  I acknowledge receipt of the
prospectus covering shares of common stock offered to me under this Non-Plan
Stock Option.  The Non-Plan Stock Option Agreement is incorporated
herein by reference.  The Exercise Agreement and the Non-Plan Stock
Option Agreement constitute the entire agreement and understanding of the
parties and supercede in their entirety all prior understandings and agreements
of the Company and Optionee with respect to the subject matter
hereof.  I UNDERSTAND
THAT I MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF THE PURCHASE OR
DISPOSITION OF THESE SHARES.  I HAVE CONSULTED WITH ANY TAX
CONSULTANT(S) I DEEM ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF
THE SHARES AND CERTIFY THAT I AM NOT RELYING ON THE COMPANY FOR TAX
ADVICE.  __________  (Initial here)

     

    

    First
Name                                Middle
Initial                                           Last
Name                                Signature

    

    

    Social
Security
#                                                          Employee
ID
#                                                      Phone
Number

    

    

    Current
Address

    

    

    NOTE FOR NON-QUALIFIED (NQ) OPTIONS
ONLY – Tax is required to be withheld or collected upon exercise of all
non-qualified stock options.  The tax is based on the spread between
the sale price (closing fair market value if not same day sale) and the exercise
price multiplied by 36.68% (25% federal; 10.23% CA state; 1.45%
medicare).  In addition, Social Security and California SDI tax may be
withheld or collected depending on what you have paid year to date.

    

    

    Method 1
– SAME DAY SALE

    You are
selling all vested shares as indicated on the Exhibit A.

    

    Method 2 – SELL TO
COVER

    You want
to exercise vested shares and sell a portion of these shares to cover the cost
and applicable taxes of all the exercised shares.  The balance of
unsold shares will be deposited into your brokerage account for future
sale.

    

    Method 3 - EXERCISE &
HOLD

    You only
want to exercise (purchase) the shares in order to sell them at a later
date.

     

    

     

    
      	
               
      

            	
              Silicon
      Image Designated Brokers

            

    

    

    

     

    
      	
              E*Trade/OptionsLink

            	
              Deutsche
      Bank 

            

    

    P.O. Box
989032                                                                                     101
California Street, 46th
Floor

    West
Sacramento,
CA  95798-9858                                                     San
Francisco, CA  94111

    www.etrade.com                                                                                    Fax
– (415) 617-4270

    (800)
838-0908 (press “#0” for service
representative)                   

    (650)
599-0125 (from outside the United States)

    (800)
775-2793 (for Executive Services)

    

    
      
         

      

      
         

        
        

        
          

          

        

      

      
         

      

    

    Spousal
Consent

    

    I acknowledge that I have read the
foregoing Non-Plan Stock Option Exercise Agreement (the “Agreement”)
and that I know its contents.  I hereby consent to and approve all the
provisions of the Agreement, and agree that the shares of the Common Stock of
Silicon Image, Inc. purchased thereunder (the “Shares”)
and any interest I may have in such Shares are subject to all the provisions of
the Agreement.  I will take no action at any time to hinder operation
of the Agreement on these Shares or any interest I may have in or to
them.

    

    

    

    __________________________________ Date:__________________

    Signature of Optionee’s
Spouse

    

    __________________________________

    Spouse’s Name - Typed or
Printed

    

    ___________________________________

    Optionee’s Name - Typed or
Printedex101.htm

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT dated as of the 23rd day of April, 2010, effective April 1, 2010 (the “Effective Date”) by and among FOREX INTERNATIONAL TRADING CORP., a Nevada corporation with its principal office 1618 N. Fairfax Avenue, Los Angeles, California 90046 (the “Company”), and DARREN DUNCKEL, with a business address at 9 Buckskin Rd., Bell Canyon, CA 91307 (“Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Company wishes to engage Executive as its chief executive officer and desires to obtain the benefits of Executive’s knowledge, skill and ability in connection with managing of the Company and to employ Executive on the terms and conditions hereinafter set forth; and

 

WHEREAS, the Company desires to engage Executive to serve at its chief executive officer on and subject to the terms of this Agreement;

 

NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement, the parties agree as follows:

 

1. Employment and Duties.

 

(a) Subject to the terms and conditions hereinafter set forth, the Company hereby employs Executive as chief executive officer, during the Term, as hereinafter defined.  As chief executive officer of the Company, Executive shall have the duties and responsibilities associated with the chief executive officer of a corporation.  Executive shall also perform such other duties and responsibilities as may be determined by the Company’s board of directors (the “Board”), as long as such duties and responsibilities are consistent with those of the Company’s chief executive officer.

 

(b) During the Term, Executive shall serve, if elected, as a member of the Board or the board of directors of the parent or subsidiary or as an officer of a subsidiary as long as such services are reasonably related to his duties set forth in Section 1(a) of this Agreement.

 

(c) The “Term” shall mean the period commencing on the Effective Date and ending two (2) years from the date of this Agreement, unless terminated earlier pursuant to Section 5 of this Agreement.

 

2. Executive’s Performance.  Executive hereby accepts the employment contemplated by this Agreement. During the Term, Executive shall perform his duties diligently, in good faith and in a manner consistent with the best interests of the Company, and shall devote substantially all of his business time to the performance of his duties under this Agreement.

 

3. Compensation and Other Benefits.

 

(a) For his services during the Term, the Company shall pay Executive a salary (“Salary”) at the annual rate of one hundred twenty thousand dollars ($120,000), to be paid on a monthly basis at a rate of ten thousand dollars ($10,000) per month.  Executive will also be granted a signing bonus consisting of 4,000,000 shares of common stock of the Company upon signing this Agreement.  Additionally, if the Company generates net income (as such term is defined by US GAAP) of at least one million dollars ($1,000,000) during any fiscal year during the Term, the Company will pay the Executive an annual bonus in the amount of one hundred thousand dollars ($100,000).

 

(b) In addition to Salary, Executive shall receive the following benefits during the Term:

 

(i) Such insurance, including such medical, health and disability insurance, if any, as the Company provides its executive officers, which benefits will not be less than the insurance benefits presently provided by the Company to its executive officers.

 

(ii) two weeks vacation in each calendar year, which may be taken in accordance with Company policy.

 

(iii) Eligibility to participate in such pension, profit-sharing, retirement and other benefits, if any, that are available to executive officers of the Company.

 

  

1

  

 

4. Reimbursement of Expenses.  The Company shall reimburse Executive, upon presentation of proper expense statements, for all authorized in writing, ordinary and necessary out-of-pocket expenses reasonably incurred by Executive during the Term in connection with the performance of his services pursuant to this Agreement in accordance with the Company’s expense reimbursement policy.

 

5. Termination of Employment.

 

(a) This Agreement and Executive’s employment shall terminate immediately upon his death.

 

(b) This Agreement and Executive’s employment pursuant to this Agreement may be terminated by the Executive or the Company on not less than 30 days’ written notice in the event of Executive’s Disability. The term “Disability” shall mean any illness, disability or incapacity of the Executive which prevents him from substantially performing his regular duties for a period of two consecutive months or three months, even though not consecutive, in any twelve month period.

 

(c) The Company may terminate this Agreement and Executive’s employment pursuant to this Agreement immediately for Cause, in which event no further compensation shall be payable to Executive subsequent to the date of such termination except for accrued compensation earned prior to the date of termination. The date of termination shall be the date of the notice from the Company stating that Executive’s employment is terminated for Cause.  The term “Cause” shall mean:

 

(i) repeated failure of Executive to perform material instructions from the Board, provided that such instructions are reasonable and consistent with Executive’s duties as set forth in Section 1 of this Agreement, or any other failure or refusal by Executive to perform his duties required by said Section 1; provided, however, that Executive shall have received notice from the Board specifying the nature of such failure in reasonable detail and Executive shall have failed to cure the failure within five business days after receipt of such notice, provided, however, that if such failure is capable of being cured but cannot, with due diligence, be cured within such five business day period, and if Executive has commenced efforts to cure such failure within such five business day period and proceeds diligently to cure such failure, then such failure will not constitute “Cause” if such failure is cured as soon as practical under the circumstances, but not later than twenty (20) days after such notice from the Board.

 

(ii) a breach of Sections 6, 7 or 8 of this Agreement;

 

(iii) a breach of trust whereby Executive obtains personal gain or benefit at the expense of or to the detriment of the Company or any of its affiliates;

 

(iv) any fraudulent or dishonest conduct by Executive or any other wrongful or tortious conduct by Executive which damages the Company or any of their affiliates or their property, business or reputation.

 

(v) a conviction of, or guilty plea or plea of nolo contendere by, of Executive of (x) any felony or (y) any other crime involving fraud, theft, embezzlement or use or possession of illegal substances; or

 

(vi) the admission by Executive of any matters set forth in Section 5(c)(v) of this Agreement.

 

  

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(d) Executive’s resignation prior to the expiration of the Term shall be treated in the same manner as a termination for Cause, except that if Executive resigns for Good Reason, as hereinafter defined, then Executive’s resignation shall be treated as a termination by the Company pursuant to Section 5(e) of this Agreement.   A resignation shall be for Good Reason if, without Executive’s consent, either: (i) his duties, responsibilities and title have been changed to duties and responsibilities other than those set forth in Section 1(a) of this Agreement, or (ii) the location of Executive’s principal office is moved from the Los Angeles, California area.

 

(e) In the event that the Company terminate this Agreement and Executive’s employment other than for reasons set forth in Sections 5(a), 5(b) or 5(c) or in the event of Executive’s resignation for Good Reason, the Company shall pay to Executive within 30 days after the date of his termination an amount equal to his Salary for the balance, if any, of the Term, including the one-time bonus referred to in Section 3(d) of this Agreement.

 

6. Trade Secrets and Proprietary Information.

 

(a) Executive recognizes and acknowledges that the Company, through the expenditure of considerable time and money, has developed and will continue to develop in the future confidential information.  “Confidential information” shall mean all information of a proprietary or confidential nature relating to Covered Persons, including, but not limited to, such Covered Person’s trade secrets or proprietary information, confidential know-how, and marketing, services, products, business, research and development activities, inventions and discoveries, whether or not patentable, and information concerning such Covered Person’s services, business, customer or client lists, proposed services, marketing strategy, pricing policies and the requirements of its clients and relationships with its lenders, suppliers, licensors, licensees and others with which a Covered Person has a business relationship, financial or other data, technical data or any other confidential or proprietary information possessed, owned or used by the Company, the disclosure of which could or does have a material adverse effect on the Company, its businesses, any business in which it proposes to engage.  Executive agrees that he will not at any time use or disclose to any Person any confidential information relating to the Company or any affiliate of the Company or any client of the Company which provided confidential information to Executive; provided, however, that nothing in this Section 6(a) shall be construed to prohibit Executive from using or disclosing such information if he can demonstrate that such information (i) became public knowledge other than by or as a result of disclosure by a Person not having a right to make such disclosure or (ii) was disclosure that was authorized by the Company.  The term “Covered Person” shall include the Company, its parent and subsidiaries and any other Person who provides information to the Company pursuant to a secrecy or non-disclosure agreement.

 

(b) In the event that any confidential information is required to be produced by Executive pursuant to legal process (including judicial process or governmental administrative subpoena), Executive shall give the Company notice of such legal process within a reasonable time, but not later than ten business days prior to the date such disclosure is to be made, unless Executive has received less notice, in which event Executive shall immediately notify the Company.  The Company shall have the right to object to any such disclosure, and if the Company objects (at the Company’s cost and expense) in a timely manner so that Executive is not subject to penalties for failure to make such disclosure, Executive shall not make any disclosure until there has been a court determination on the Company’s objections.  If disclosure is required by a court order, final beyond right of review, or if the Company does not object to the disclosure, Executive shall make disclosure only to the extent that disclosure is required by the court order, and Executive will exercise reasonable efforts at the Company’s expense, to obtain reliable assurance that confidential treatment will be accorded the Confidential Information.

 

(c) Executive shall, upon expiration or termination of the Term, or earlier at the request of the Company, turn over to the Company or destroy all documents, papers, computer disks or other material in Executive’s possession or under Executive’s control which may contain or be derived from confidential information.  To the extent that any confidential information is on Executive’s hard drive or other storage media, he shall, upon the request of the Company, cause either such information to be erased from his computer disks and all other storage media or otherwise take reasonable steps to maintain the confidential nature of the material.

 

(d) Executive further realizes that any trading in the Company’s common stock or other securities or aiding or assisting others in trading in the Company’s common stock or other securities, including disclosing any non-public information concerning the Company or its affiliates to a Person who uses such information in trading in the Company’s common stock or other securities, may constitute a violation of federal and state securities laws.  Executive will not engage in any transactions involving the Company’s common stock or other securities while in the possession of material non-public information in a manner that would constitute a violation of federal and state securities laws.

 

  

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7. Covenant Not To Solicit or Compete.

 

(a) During the period from the date of this Agreement until one year following the date on which Executive’s employment is terminated, Executive will not, directly or indirectly:

 

(i) persuade or attempt to persuade any Person which is or was a customer, client or supplier of the Company to cease doing business with the Company, or to reduce the amount of business it does with the Company (the terms “customer” and “client” as used in this Section 7 to include any potential customer or client to whom the Company submitted bids or proposals, or with whom the Company conducted negotiations, during the term of Executive’s employment or consulting relationship hereunder or during the twelve (12) months preceding the termination of his employment or consulting relationship, as the case may be);

 

(ii) solicit for himself or any other Person other than the Company the business of any Person which is a customer or client of the Company, or was a customer or client of the Company within one (1) year prior to the termination of his employment or consulting relationship;

 

(iii) persuade or attempt to persuade any employee of the Company, or any individual who was an employee of the Company during the one (1) year period prior to the lawful and proper termination of this Agreement, to leave the Company’s employ, or to become employed by any Person in any business in the United States whether as an officer, director, consultant, partner, guarantor, principal, agent, employee, advisor or in any manner, which directly competes with the business of the Company as it is engaged in at the time of the termination of this Agreement, unless, at the time of such termination or thereafter during the period that the Executive is bound by the provisions of this Section 7, the Company ceases to be engaged in such activity, provided, however, that nothing in this Section 7 shall be construed to prohibit the Executive from owning an interest of not more than five (5%) percent of any public company engaged in such activities.

 

(b) Executive will not, during or after the Term, make any disparaging statements concerning the Company, its business, officers, directors and employees that could injure, impair, damage or otherwise affect the relationship between the Company, on the one hand, and any of the Company’s employees, suppliers, customers, clients or any other Person with which the Company has or may conduct business or otherwise have a business relationship of any kind and description; provided, however, that this sentence shall not be construed to prohibit either from giving factual information required to be given pursuant to legal process, subject to the provisions of Section 6(b) of this Agreement.  The Company will not make any disparaging statements concerning Executive.  This Section 7(b) shall not be construed to prohibit the either party from giving factual information concerning the other party in response to inquiries that such party believes are bona fide.

 

(c) The Executive acknowledges that the restrictive covenants (the “Restrictive Covenants”) contained in Sections 6 and 7 of this Agreement are a condition of his employment and are reasonable and valid in geographical and temporal scope and in all other respects. If any court determines that any of the Restrictive Covenants, or any part of any of the Restrictive Covenants, is invalid or unenforceable, the remainder of the Restrictive Covenants and parts thereof shall not thereby be affected and shall remain in full force and effect, without regard to the invalid portion. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable because of the geographic or temporal scope of such provision, such court shall have the power to reduce the geographic or temporal scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable.

 

(d) Nothing in this Section 7 shall be construed to prohibit Executive from owning a passive, non-management interest of less than 5% in any public company that is engaged in activities prohibited by this Section 

 

  

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8. Inventions and Discoveries. Executive agrees promptly to disclose in writing to the Company any invention, design, system, process, development or other discovery or intellectual property (collectively, “inventions and discoveries”) conceived, created or made by him during the Term, whether created or developed by himself or with others, whether during or after working hours, in any business in which the Company is then engaged or which otherwise relates to any product or service dealt in by the Company and such inventions and discoveries shall be the Company’s sole property, regardless of whether such inventions and discoveries are otherwise treated as work performed for hire and regardless of whether such inventions and discoveries are or can be patented, registered or copyrighted. Upon the Company’s request, and at the Company’s cost and expense, Executive shall execute and assign to the Company all applications for copyrights, trademarks and letters patent of the United States and such foreign countries as the Company may designate, and Executive shall execute and deliver to the Company such other instruments as the Company deems necessary to vest in the Company the sole ownership of all rights, title and interest in and to such inventions and discoveries, as well as all copyrights and/or patents. Executive shall also give the Company all assistance it may reasonably require, including the giving of testimony in any suit, action, investigation or other proceeding in connection with the foregoing.  If Executive is required to give such testimony subsequent to the Term, the Company shall pay his reasonable out-of-pocket expenses incurred in connection with such testimony.

 

9. Injunctive Relief. Executive agrees that his violation or threatened violation of any of the provisions of Sections 6, 7 or 8 of this Agreement shall cause immediate and irreparable harm to the Company. In the event of any breach or threatened breach of any of said provisions, Executive consents to the entry of preliminary and permanent injunctions by a court of competent jurisdiction prohibiting Executive from any violation or threatened violation of such provisions and compelling Executive to comply with such provisions. This Section 9 shall not affect or limit, and the injunctive relief provided in this Section 9 shall be in addition to, any other remedies available to the Company at law or in equity or in arbitration for any such violation by Executive. Subject to Section 7(c) of this Agreement, the provisions of Sections 6, 7, 8 and 9 of this Agreement shall survive any termination of this Agreement and Executive’s employment and consulting relationship pursuant to this Agreement.

 

10. Indemnification. The Company shall provide Executive with payment of legal fees and indemnification to the maximum extent permitted by the Company’s or the Company’s, as the case may be, certificate of incorporation, by-laws and applicable law.

 

11. Representations by the Parties.

 

(a) Executive represents, warrants, covenants and agrees that he has a right to enter into this Agreement, that he is not a party to any agreement or understanding, oral or written, which would prohibit performance of his obligations under this Agreement, and that he will not use in the performance of his obligations hereunder any proprietary information of any other party which he is legally prohibited from using.

 

(b) The Company represents, warrants and agrees that it has full power and authority to execute and deliver this Agreement and perform its obligations hereunder.

 

12. Miscellaneous.

 

(a) Any notice, consent or communication required under the provisions of this Agreement shall be given in writing and sent or delivered by hand, overnight courier or messenger service, against a signed receipt or acknowledgment of receipt, or by registered or certified mail, return receipt requested, or telecopier or similar means of communication if receipt is acknowledged or if transmission is confirmed by mail as provided in this Section 12(a), to the parties at their respective addresses set forth at the beginning of this Agreement or by telecopier to the Company at (    )    -    or to Executive at (      )              , with notice to the Company being sent to the attention of the individual who executed this Agreement on its behalf. Any party may, by like notice, change the Person, address or telecopier number to which notice is to be sent.  If no telecopier number is provided for Executive, notice to him shall not be sent by telecopier.

 

  

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(b) This Agreement shall in all respects be construed and interpreted in accordance with, and the rights of the parties shall be governed by, the laws of the State of California applicable to contracts executed and to be performed wholly within such State, without regard to principles of conflicts of laws.  Each party hereby (i) consents to the exclusive jurisdiction of the federal courts in Los Angeles County, California, (ii) agrees that any process in any action commenced in such court under this Agreement may be served upon it or him personally, either (x) by certified or registered mail, return receipt requested, or by courier service which obtains evidence of delivery, with the same full force and effect as if personally served upon such party, or (y) by any other method of service permitted by law, and (iii) waives any claim that the jurisdiction of any such court is not a convenient forum for any such action and any defense of lack of in personam jurisdiction with respect thereof.

 

(c)  If any term, covenant or condition of this Agreement or the application thereof to any party or circumstance shall, to any extent, be determined to be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition to parties or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and be enforced to the fullest extent permitted by law, and any court or arbitrator having jurisdiction may reduce the scope of any provision of this Agreement, including the geographic and temporal restrictions set forth in Section 7 of this Agreement, so that it complies with applicable law.

 

(d) This Agreement constitute the entire agreement of the Company and Executive as to the subject matter hereof, superseding all prior or contemporaneous written or oral understandings or agreements, including any and all previous employment agreements or understandings, all of which are hereby terminated, with respect to the subject matter covered in this Agreement. This Agreement may not be modified or amended, nor may any right be waived, except by a writing which expressly refers to this Agreement, states that it is intended to be a modification, amendment or waiver and is signed by both parties in the case of a modification or amendment or by the party granting the waiver. No course of conduct or dealing between the parties and no custom or trade usage shall be relied upon to vary the terms of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

(e) No party shall have the right to assign or transfer any of its or his rights hereunder except that the Company’s rights and obligations may be assigned in connection with a merger of consolidation of the Company or a sale by the Company of all or substantially all of its business and assets.

 

(f) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, executors, administrators and permitted assigns.

 

(g) The headings in this Agreement are for convenience of reference only and shall not affect in any way the construction or interpretation of this Agreement.

 

(h) This Agreement may be executed in counterparts, each of which when so executed and delivered will be an original document, but both of which counterparts will together constitute one and the same instrument.

 

 

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

 

	 	FOREX INTERNATIONAL TRADING CORP.	 
	 	 	 	 
	
 

	
By: 

	 /s/ Moshe J. Schnapp	 
	 	Name: Moshe J. Schnapp	 
	 	Title: CEO 	 
	 	 	 	 
	 	 	 	 
	 	EXECUTIVE:	 
	 	 	 	 
	 	/s/ Darren Dunckel	 
	 	Darren Dunckel	 

 

 

  

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