Document:

exh10-1.htm

Exhibit 10.1

Ceelox, Inc.(or its successor)

	
13976 Lynmar Blvd.

	
Tampa, Fl 33626

	
Private and Confidential

Mr. Gerry Euston

3906 W. 143rd Street

Leawood, KS 66224

RE: Consulting Services Agreement

Dear Mr. Euston:

This letter agreement (“Agreement”) is intended to be an addendum to the current “Employment  Agreement” between the parties dated April 15, 2008 and will confirm and set forth the terms of the engagement that will take effect upon either (i) the sale of  at least 75% of the stock of  Ceelox, Inc. (or its successor) (“Company”) and Nicaragua Rising, Inc. to another company or (ii) the consummation by the Company of an S-1 secondary or other senior financing offering (each a “Trigger Event”)..  Until terminated, the Employment Agreement shall be controlling.

1.        Retention.  Upon the occurrence of a Trigger Event, the Employment Agreement shall be terminated and Company (or its successor) agrees to retain Gerry Euston (“Consultant”) in accordance with the terms of this Agreement for the purpose of providing such consulting services as may be reasonably requested by Company based upon Consultant’s experience and knowledge gained as an employee of Company prior to the date of the Agreement (hereinafter “Consulting Services”).   Consultant will make himself available to Company on an as needed basis subject to reasonable notification by the Company. Company and Consultant agree that the Consulting Services will not exceed on average, forty hours per month.  Additional hours may be provided to Company by Consultant under such terms as may be mutually agreed.  If, however, a Trigger Event occurs after the expiration or earlier termination of the Employment Agreement, the Company (or its successor) shall have no obligation to retain Consultant for Consulting Services defined above and no obligation to pay any Consulting Fees specified in Section 3. (a).

2.        Confidential Information.

(a)           General.  Consultant recognizes that the Company has developed or acquired, and that Company will continue to develop and acquire intellectual property including, but not limited to, certain know-how, trade secrets, techniques, procedures, sales methods, other business methods and practices, and lists of customers and their particular requirements, which are confidential in nature (“Confidential Information”), and all of which is and will continue to be of great and unique value to the Company, all of which is now, and will continue to be, used in its business, and that, by reason of his previous employment and services pursuant to this Agreement, Consultant has acquired and will acquire certain Confidential Information regarding the business and affairs of  Company.

(b)           Non-Disclosure.  Consultant agrees that all Confidential Information heretofore or hereafter acquired by him as a result of previous services, this Agreement or otherwise, will be kept and maintained by him as confidential, in complete secrecy, and Consultant further agrees that he will not disclose, at any time, either during this Agreement or for a period of three years subsequent to this Agreement, whether orally or in writing, in any manner, directly or indirectly, to any person or firm (except to other employees of the Company), any knowledge or information that he acquired in connection with any services for or in connection with the Company, including this

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Agreement, nor will he use any such information for his own benefit or that of any other person or entity (other than the Company), except, in any such case, with the express written consent of the Company.

3.        Compensation.   The Company agrees to pay Consultant, the following compensation:

	 	
(a) 

	
As consideration for Consultant’s services pursuant to this Agreement, Consultant shall be entitled to receive a monthly fee, the Consulting Fee, of $7,500, which shall be due and payable on the first day of each month during the term of this Agreement as specified in section 7.

 

	 	
(b)

	
Coincident with the timing of a Trigger Event and as compensation for Consultants contribution to the successful completion of a Trigger Event, Company will grant Consultant a number of shares of Nicaragua Inc. registered stock with a total value of $116,000.  The value of the stock, in the event of an S-1 funding event, will be based upon the per share price of stock sold in the S-1 funding. The value of the stock to be issued to Consultant in the event of an acquisition of Company and Nicaragua Rising, Inc. will be based upon the value of the stock determined by the acquisition.  If employee voluntarily terminates his employment with the Company prior to the completion of a Trigger Event, no restricted stock shall be due to the employee.  If employment is terminated by the Company prior to the Trigger Event, Consultant will receive a stock grant in the amount determined above prorated based upon Employment time between September 27, 2010 and actual terminated date and September 27, 2010 and the date of the Trigger Event.

4.        Expenses.  In addition to payment to Consultant of the compensation set forth in Section 3 hereof, the Company shall also promptly reimburse Consultant for all reasonable expenses (including, without limitation, all travel and other out-of-pocket expenses) approved in advance by the Company and incurred by Consultant in connection with services provided pursuant to the Agreement.  Consultant will provide the Company copies of receipts for all such expenses.

5.        Indemnification.  The Company and Consultant agree to indemnify each other in accordance with the indemnification and other provisions attached to this Agreement as Exhibit A (the “Indemnification Provisions”), which provisions are incorporated herein by reference and shall survive the termination or expiration of this Agreement.

6.        Other Activities.  The Company acknowledges that Consultant has been, and may in the future be, engaged in other consulting or employment.  Subject to the confidentiality provisions contained in Section 2 hereof, the Company acknowledges and agrees that nothing contained in this Agreement shall limit or restrict the right of  Consultant to engage in, any other business, nor to limit or restrict the right of Consultant to render services of any kind to any other corporation, firm, individual or association provided, however, notwithstanding the foregoing, Consultant shall not provide any such services to any party engaged in the same or similar business as Company .

7.       Term.  The term of this agreement shall be twelve months commencing on the day after the date of termination of the Employment Agreement as a result of a Trigger Event provided that Company may terminate this Agreement at any time after 90 days from the commencement date of the Agreement provided that Company shall provide Consultant at least ninety (90) days written notice prior to such termination.  In the event of such termination, the Company shall pay and deliver to Consultant: (i) all compensation earned through the date of such termination (“Termination Date”) and (ii) payment for all approved expenses incurred by Consultant in connection with services through

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the Termination Date.  All such payments due to Consultant pursuant to the immediately preceding sentence shall be paid on or before the Termination Date.

9.        Governing Law; Jurisdiction; Waiver of Jury Trial.  This Agreement shall be governed by and construed in accordance with the laws of the State of Kansas applicable to agreements made and to be fully performed therein, without regard to conflicts of law principles.

10.      Amendments.  This Agreement may not be modified or amended except in a writing duly executed by the parties hereto.

11.      Headings.  The section headings in this Agreement have been inserted as a matter of reference and are not part of this Agreement.

12.     Successors and Assigns.  Neither Consultant nor the Company shall assign any of its obligations hereunder without the prior written consent of the other party.

14.      Waiver.  Any waiver or any breach of any of the terms or conditions of this Agreement shall not operate as a waiver of any other breach of such terms or conditions or of any other term or condition, nor shall any failure to insist upon strict performance or to enforce any provision hereof on any one occasion operate as a waiver of such provision or of any other provision hereof or a waiver of the right to insist upon strict performance or to enforce such provision or any other provision on any subsequent occasion.  Any waiver must be in writing.

15.      Counterparts.  This Agreement may be executed in any number of counterparts and by facsimile transmission, each of which shall be deemed to be an original instrument, but all of which taken together shall constitute one and the same agreement.  Facsimile signatures shall be deemed to be original signatures for all purposes.

If the foregoing correctly sets forth our agreement, please sign the enclosed copy of this Agreement in the space provided below along.

Very truly yours,

Ceelox, Inc.

By: /s/ WILLIAM P. MOORE

William P. Moore, Chairman

Date: March 22, 2011

Agreed to and accepted this 22nd day of March, 2011

By: /s/ GERRY F. EUSTON

Gerry F. Euston

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Exhibit A

INDEMNIFICATION PROVISIONS

Each party hereto agrees to indemnify, defend and hold the other party harmless for, from any and all losses, costs, claims, obligations, liabilities, demands, losses, damages, liens, causes of actions, suits, and expenses (including attorneys’ fees and court costs) associated with the claim or claims of any third party that arise as a result of the acts or omissions of the indemnifying party in connection with the relationship established under this Agreement. 

Neither termination nor completion of the Agreement shall affect these indemnification provisions which shall remain operative and in full force and effect.  The indemnification provisions shall be binding upon and inure to the benefit of the parties and their respective successors, assigns, heirs and personal representatives.

Euston Consulting Agreement.doc--<UNDEFINED>ex_10-1.htm

 

EXHIBIT 10.1

 

 

May 14, 2012

Matt Hyde

7029 14th Avenue

Seattle, WA 98115

Dear Matt:

On behalf of the Board of Directors of West Marine, Inc. (the “Company”), it is my pleasure to offer you employment as the President and Chief Executive Officer.  In making this offer, we are expressing our enthusiastic support for your leadership skills and abilities. You will bring a set of skills essential to achieving the Company’s goals, both short and long term, and fulfilling the Company’s Mission Statement.  The purpose of this letter is to detail the initial terms of your employment, and it supersedes any prior representations or agreements, whether written or oral, regarding this topic.

Position:  President and Chief Executive Officer of the Company and its subsidiaries (“CEO”).  This position requires your full business time and efforts, although you may serve on one (private or public) corporate board (in addition to West Marine) and one civic or charitable board, provided that such entities do not compete with the Company, your service does not create a conflict of interest, and your service does do not interfere with the fulfillment of your duties to the Company.

Board of Directors:  You will be appointed as a member of the Company’s Board of Directors (“Board”) as soon as practicable following your Starting Date.  Each year during your term of employment as CEO you will be nominated in the Company’s proxy as a candidate for membership on the Board. 

Location:  Watsonville, California.

Starting Date:  As soon as possible, but no later than June 19, 2012.

Salary:  Your salary will be paid at a rate of $23,076.92 per bi-weekly pay period ($600,000 per year), commencing on your Starting Date.  The Board will conduct an annual review of your performance, typically in March, and may adjust your salary accordingly.

Bonus: You will be eligible to earn a bonus for each fiscal year you are CEO, under the terms of the annual bonus plan in effect at the time, based on achievement of the criteria approved by the Board.  Your “target” bonus for achieving the target bonus goals will be 100% of the salary you earned for the fiscal year, and the actual amount of any bonus will be determined on a sliding scale (currently from 0% to 140% of your target bonus), depending upon the Company’s performance.  For the 2012 fiscal year only, your annual bonus will be not less than $340,000.  Any bonus will be paid at the same time the Company ordinarily pays bonuses to other senior management (typically in March of the subsequent year, following completion of the audit of the Company’s financial statements

  

  

  

Matt Hyde

May 11, 2012

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for the fiscal year), and you must be employed by the Company at the time of payment to receive the bonus.  You agree that in the event the Company restates its financial statements for any part of a fiscal year, then the Company shall recalculate the bonus you were entitled to for such fiscal year, and regardless of whether or not you are employed by the Company at such time, if the amount of the bonus is decreased, you will promptly pay the Company the deficit.

Stock Awards:  Effective as of the 10th business day of the calendar month following your Starting Date, you shall be granted:  (a) as a new hire incentive, (i) an option to purchase 60,000 shares of the Company’s common stock, and (ii) a restricted stock unit award to receive 20,000 shares of the Company’s common stock; and (b) as part of your regular compensation for 2012, (i) an additional option to purchase 40,000 shares of the Company’s common stock, and (ii) an additional restricted stock unit award to receive 20,000 shares of the Company’s common stock.  These awards will include standard terms and conditions, which currently include:  the options will have an exercise price per share equal to the fair market value per share of the Company’s common stock on the grant date, will vest in three substantially equal installments on the next three anniversaries of the grant date, and will have a maximum term of seven years; and the restricted stock unit awards also will vest in three substantially equal installments on the next three anniversaries of the grant date, and will be paid to you shortly following the vesting date.  Each fiscal year after 2012 you shall be eligible to receive additional equity-based awards at the discretion of the Governance and Compensation Committee.

Stock Ownership Guidelines:  The Company’s Stock Ownership Policy requires you to own Company stock equal to 400% of your annual base salary.  Under that Policy, until this threshold is met, you will be required to retain (i) 50% of the after-tax shares you receive from exercising options and purchasing stock under the Company’s Associate’s Stock Buying Plan, and (ii) 75% of the after-tax shares from restricted stock units.

Relocation Assistance:  In connection with you and your spouse’s relocation from Seattle, WA to the greater Watsonville, CA area, the Company will reimburse you for the reasonable expenses you incur within the next six months for:  (i) you and/or your family to temporarily reside in the Watsonville area, (ii) you and your spouse to travel roundtrip, by air, once per week between Seattle and one of the major airports in the Watsonville area, (iii) you and your spouse to travel to Watsonville to find a new primary residence, (iv) the packing, transportation and unpacking of the household goods of your current primary residence, (v) the ordinary and reasonable closing costs incurred in connection with the purchase of your new primary residence, and (vi) other reasonable relocation expenses, provided that you submit to the Company paid receipts or other documentation of such expenses acceptable to the Company and consistent with the Company’s accounting practices.

Benefits:  You will be eligible to participate in the Company’s medical insurance plans and other benefit plans in place at the time in accordance with the terms applicable to the Company’s senior level management. (A general description of the benefits is enclosed.)  You will receive 20 days of paid time off (“PTO”) each year, and you may carry forward

  

  

  

Matt Hyde

May 11, 2012

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unused PTO to a maximum of 30 days.  In addition, you will be eligible to receive $1.5 million of term life insurance (if you meet standard underwriting criteria).

Severance Benefits:   You will be a participant in the Company’s Executive Officer Severance Plan.  Under the terms of this Plan, if your employment is terminated without “Cause” or for “Good Reason” (as defined in the Plan) you would be eligible to receive severance benefits for 52 to 78 weeks, depending upon your tenure with the Company, and if your termination occurs during the second half of the Company’s fiscal year, you would be eligible to receive a pro-rated annual bonus for the year.  (A copy of the Plan is enclosed.)

Conditions to Employment:  This offer is conditioned upon you:

(a)  Signing the attached Confidentiality and Non-Solicit Agreement (because your services and responsibilities are of particular significance to the Company and your position with the Company will give you intimate knowledge of the Company’s business);

(b)  Certifying to the Company, by signing this letter, that (i) your acceptance of this offer will not violate any non-competition, confidentiality or other obligations you may have with any current and/or former employer, and (ii) you have provided the Company with copies of any non-competition, confidentiality or other agreements that you signed in conjunction with any current and/or former employment;

(c)  Satisfying federal immigration law requirements, by providing to the Company within three business days after the Starting Date documentary evidence of your identity and eligibility for employment in the United States; and

(d)  Signing permission for the Company to perform, and the Company’s satisfaction with, a background check.

Employment at Will:  Please note that this letter and your response are not meant to constitute a contract of employment for any specific period of time and that you will remain, at all times, an employee at-will, which means that you will not be obligated to remain at the Company for any specific period of time.  Likewise, the Company is not obligated to employ you for any specific period of time.  The terms of this letter will be governed by the substantive laws of the State of California.

Arbitration:  With the exception of a suit for injunctive or equitable relief, in the event that a dispute arises concerning you employment with, or the termination of your employment with, the Company, or any other related matter, you agree that any such dispute shall be resolved by a three member arbitration panel in Santa Cruz, California in accordance with the then prevailing commercial arbitration rules of the American Arbitration Association. You specifically waive any right to jury trial on such disputes.  The decisions and awards rendered by the arbitration panel shall be final and conclusive and may be entered in any court having jurisdiction thereof as a basis of judgment and of the issuance of a writ for its collection. The Company shall pay the cost of the arbitration panel, and unless the arbitration panel otherwise determines, the Company and you each shall be responsible for his or its cost of the arbitration (e.g., attorneys fees).  We

  

  

  

Matt Hyde

May 11, 2012

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mutually agree to keep confidential the existence of the claim, controversy or disputes from third parties (other than arbitration panel), and the determination thereof, unless otherwise required by law.  This arbitration agreement shall not be construed as precluding the Company from bringing an action for injunctive relief or other equitable relief for enforcement of any restrictive covenants in the Confidentiality and Non-Solicit Agreement.

Expiration of Offer:  This offer will remain open until the end of business on May 15, 2012.

Matt, we are excited to have you join us and are enthused at the prospect of a very promising future together.  When you do accept, and all of us sincerely hope you will, please sign this letter and return it via email to me, with the original to follow.  We look forward to a long and mutually rewarding relationship.

Very truly yours,

	West Marine, Inc.	 
	 	 	 
	 	 	 
	
By: 

	/s/ Randy Repass	 
	 	Randy Repass	 
	 	Chairman	 
	 	 	 

 

Attachments:

WMAR 2012 Benefits Summary

WMAR Executive Officer Severance Plan

WMAR Confidentiality and Non-Solicit Agreement

	 	 
	 	 ACCEPTED AND AGREED:	 
	 	 	 
	
 

	/s/ Matt Hyde	 May 15, 2012
	 	Matt Hyde

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