GABRIEL TECHNOLOGIES CORPORATION
EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (“
Agreement ”)
is made effective on the 1 st day
of February, 2007 by and between Gabriel Technologies LLC, a
Delaware limited liability company having its principal place
of business in Omaha, Nebraska, (“
Gabriel ”) and
the undersigned (“ Officer
”) .
WHEREAS,
Gabriel intends to employ Officer as
President , and Officer intends to be so
employed by Gabriel, all subject to the terms and conditions
of this Agreement;
WHEREAS,
Gabriel’s parent corporation, Gabriel Technologies
Corporation, a Delaware corporation ( “
GTC ”) is
currently discussing a merger transaction with Stonebridge
Holdings, LLC representing one of its clients (the “
Stonebridge Transaction ”)
.
NOW
THEREFORE, in ‘consideration of the employment of
Officer by Gabriel and the mutual covenants and agreements
herein set forth, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1.
Position and Duties . Gabriel hereby
employs Officer as President . Officer
shall report to the COO of GTC and shall perform all of the duties
incident to the position of President as set forth
in Gabriel’s Operating Agreement as communicated to Officer
from time to time and as otherwise directed by the Board of
Directors of GTC (the “ Board
”) in writing. Officer shall serve
on such committees of Gabriel and/or GTC as directed by the
Board. During the term hereof, except for periods of
absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Officer shall devote substantially
all of his business time, attention, skill, and efforts to the
performance of his duties hereunder. Officer shall
perform his duties to the best of his ability and incompliance with
the directions of the President, the Board and with state and
federal law. Officer may, with the prior approval of the
Board, serve on the boards of directors of, and hold any other
offices or positions in, companies or organizations, which, in the
Board’s judgment, will not present any conflict of interest
with Gabriel, or materially affect the performance of
Officer’s duties pursuant to this Agreement.
2.
Term . The term of the Agreement (the
“ Term ”)
shall begin on February 1, 2007, and shall continue until January
31st, 2012 (the “ Anniversary Date
”) . Commencing on the Anniversary Date and on each
February 1st thereafter, the Term of this Agreement shall
automatically renew for 1 additional year unless Notice of
Termination is given to Officer at least 60 days prior to such
Anniversary Date or any such February 1 st as the
case may be, that the Term of this Agreement shall expire effective
as of the next January 31 st
. The Term of this Agreement may be-terminated at any
time during the Term as hereinafter provided.
3.
Compensation and Reimbursement .
3.1
Base Salary . Compensation
under this Agreement shall include the salary and benefits
described herein. Gabriel agrees to pay Officer a salary of
not less than $150,000 per year (“ Base
Salary ”). The Base
Salary shall be payable in 26 equal bi-weekly installments
each year, beginning on February 1, 2007. During
the term of this Agreement, the Base Salary shall be reviewed
by the Board at least annually or at the request of
Officer.
3.2
Executive Benefits
. Gabriel shall provide to Officer employee
benefit plans substantially equivalent to those offered to
other executive officers of GTC, as modified from time to
time, including without limitation, retirement plans,
supplemental retirement plans, pension plans, 401k,
profit-sharing plans, health, disability and accident plans,
life insurance, and any other employee benefit plan made
available by GTC in the future to its executive officers,
subject to and on a basis consistent with the terms,
conditions and administration of such plans.
3.3
Travel Expenses . Gabriel
shall payor reimburse Officer for all reasonable travel and
other reasonable expenses incurred by Officer in performing
his duties under this Agreement upon presentation of receipts
and explanations according to Gabriel’s expense
reimbursement policies in effect from time to
time.
3.4
Performance Bonus . For
purposes of this Section 3.4, each full 6 month period during
the Term shall commence on each February 1 SI (beginning with
February 1, 2007)and August 1 st
(each, a “ Bi-annual Period
”) . Gabriel will pay Officer
a’ performance bonus equal to 3% of gross sales of
Gabriel if sales during a Bi-annual Period during the Term
exceed $500,000 (the “ Sales
Floor ”) , subject to increase
for subsequent Bi-annual periods as hereafter
provided. Such performance bonus will be computed
upon sales in excess of the Sales Floor for the Biannual
Period and will be deemed earned by Officer for each
Bi-annual Period ending during his continued employment
hereunder. Any performance bonus earned will be
paid within 30 calendar days after the end of such Bi-annual
Period, even if Officer’s employment terminates after
the end of such Bi-annual Period. The Sales Floor
will remain in effect for at least the first 2 Bi-annual
Periods hereunder and may be increased by the Board for any
subsequent 2 Bi-annual periods, but not above the actual
sales during the Bi-annual period immediately preceding such
change. The Board will meet with Officer within 30
days after the commencement of any Bi-annual Period for which
the Board intends to impose a new Sales Floor and must notify
Officer of any such change not later than 45 days after the
commencement of such Bi-annual Period. If officer
does not receive timely notice, the Sales Floor remains the
same as the prior period. In addition, Officer
will be entitled to compensation related to his direct impact
on sales growth in circumstances where Officer has performed
the functions of a sales agent and no commission is payable
to another employee or sales agent. This
additional compensation will be 5% of sales made by Officer
in the prior Bi-annual Period, paid within 30 calendar days
after the end of such Bi-annual Period.
3.5
Stock Shares and Options . Officer
shall be entitled to participate in any stock plan adopted by
GTC to the extent determined by the Board. Officer will be
entitled to receive a certificate for 250,000 shares of GTC
common stock (GWLK) upon execution of this Agreement (the
“ Initial Shares ”)
and Gabriel will deliver a certificate
representing such Initial Shares to Officer within 5 days of
contract being executed. The certificate will bear
restrictive legends reflecting (i) that such Initial Shares
are not registered and may only be sold in compliance with
Rule 144 or pursuant to some other exemption from
registration (a “ Rule
144 Legend
”) and (ii) GTC’s Repurchase
Option as hereafter described. GTC will be entitled to
repurchase a pro-rata
portion of such Initial Shares at a price equal
to $.01 per share (the “ Repurchase
Option ”) if
Officer’s employment is terminated, for cause, at any
time during the first year of the Term. For example, one-half
of such Initial Shares would be subject to repurchase by GTC
if Officer’s employment terminates, for cause, during
the 7 th
month of the first year of the Term. GTC will
notify Officer within 30 days of such termination of
employment, if it occurs, of its election to repurchase and
will tender the repurchase price, as well as a stock
certificate for any shares not so repurchased, bearing only a
Rule 144 Legend, in return for the aforementioned
certificate. GTC will remove the legend regarding
the Repurchase Option within 10 days of Officer’s
submitting the certificate to GTC (i) anytime after February
1, 2008 or (ii) earlier if Officer’s employment is
terminated hereunder for any reason other than by Gabriel for
cause or if Officer’s employment is terminated
hereunder by Gabriel for cause but GTC fails to timely notify
Officer of its election to repurchase the Initial
Shares. An option for an additional 250,000 shares
of GTC common stock will be granted to Officer once Gabriel
has achieved $2,000,000 in gross sales over a consecutive 12
month period (the “ Incentive
Option ”). Such Incentive
Option will be fully vested and exercisable upon grant at a
price as provided in the stock plan in effect at the time of
grant or, in the absence of such a plan, at fair market value
per share as reasonably determined by the Board on the date
of the grant ( “ Incentive Option
Price ”) . Such
Incentive Option instrument will be delivered to Officer
within 5 business days of the end of the 12 month period
during which the $2,000,000 in gross sales were
achieved. The term of the Incentive Option will be
as directed in the stock plan, or if not so directed, for a
term of 10 years ( “ Incentive
Option Term ”) . The
certificate issuable on exercise of the Incentive Option will
bear restrictive legends as provided in the plan, including
in any event a Rule 144 Legend. The Rule 144
Legend on the Initial Shares or the Incentive Option will be
removed promptly upon submission of the certificate for
removal accompanied by an opinion of counsel, reasonably
satisfactory to GTC securities counsel, to the effect that
removal of such legend is in compliance with
law.
3.6
Employee Benefits . In
addition to the Base Salary, Gabriel shall provide to Officer
additional benefits during the Term such as a cell phone and
related monthly expenses, lap top computer and a car
allowance of $650.00 per month, plus gas.
3.7
Personal Time . Officer
shall be entitled each year to a total of 15 days of vacation
and personal time away from Gabriel during which time his
compensation will be paid in full; provided, however, no more
than 2 weeks may be taken consecutively without the written
.consent of the COO of GTC. In addition, Officer
shall be entitled to such paid holidays as provided by Gabriel
for its full-time employees.
4.
Payments upon Termination .
4.1
Events ReQuirinl! Severance Pay
. Officer shall be entitled to receive the
Severance Pay provided in Section 4.2 upon the occurrence of
one or more of the following events (a “
Termination Event
”):
A. The
Term of this Agreement is terminated by Gabriel other than
for Cause; or
B. Termination
of this Agreement occurs pursuant to Section 7.1 or 7.2;
or
C. Officer
resigns from his employment hereunder by reason of any of the
following actions taken by the Board, unless such action is
taken for Cause or otherwise agreed to or waived by Officer:
(i) failure by the Board to elect or reelect or to appoint or
reappoint Officer as President; (ii) material change in
Officer’s function, duties or responsibilities which
would cause Officer’s position to become one of lesser
responsibility, importance or scope from the position thereof
described in Section 1; (iii) relocation by Gabriel of
Officer’s principal place of employment to an area
other than the Des Moines, Iowa or Omaha, Nebraska
metropolitan areas; (iv) liquidation or dissolution of
Gabriel other than a liquidation or dissolution that is
caused by a reorganization that does not affect the position
of Officer described in Section 1; or (v) material breach of
this Agreement by Gabriel that is not remedied within 30 days
after written notice from Officer. For purposes of clarity, a
Termination for Cause as provided in Section 7.3 or a
resignation of Officer except as provided in Section 4.1.C
shall not be’ a Termination Event entitling Officer to
Severance Pay hereunder.
4.2
Payment upon Termination
. In the event of the occurrence of a Termination
Event as described in Section 4.1, then on the Termination
Date, as defined in Section 7, Gabriel shall be obligated to
pay Officer, as severance pay, in addition to any performance
bonus or commissions earned pursuant to the provisions of
Section 3.4 above through the Termination
Date. For purposes of clarity, the following
Severance Pay provisions of Sections 4.2.A and 4.2.B are in
the alternative and are the Severance Pay payments referred
to in Section 4.3 and are not in addition
thereto.
A. If
the Termination Event occurs during the pendency of the Stone
bridge Transaction or on or before the date 30 days after the
closing of the Stone bridge Transaction (the “
Stonebridge Period ”)
, a sum equal to $75,000, or if, at the date of such
Termination Event Officer’s Base Salary has been
increased hereunder, one-half year’s salary at the then
effective Base Salary (the “ Severance
Pay ”). At the election
of Gabriel, which election is to be made within 14 days of
the Termination Date, Payment of the Severance Pay shall be
made in a lump sum or paid in equal monthly installments
during a period of up to 6 months following the Termination
Date. In the event that no election is made, such
payment will be made in a lump sum within 14 days of the
Termination Date. If a Termination Event occurs
under this section and the Stonebridge Transaction does not
close, Gabriel and GTC agree to pay Officer the Severance Pay
under this section 4.2(A) and the difference between the
Severance Pay paid (or payable, if it has not yet been paid)
to Officer under this section 4.2.(A) and the Severance Pay
under section 4.2.(B) within 10 calendar days of the date
that there is reasonable evidence that the Stonebridge
Transaction is not viable.
B. If
the Termination Event occurs after the expiration of the
Stonebridge Period or on a date that there is reasonable
evidence that the Stonebridge Transaction is not viable, a
sum equal to one year’s salary at the then effective
Base Salary together with an amount equal to the lesser of
(A) $100,000 and (B) the amount of any performance bonuses
for the immediate past 2 Bi-annual Periods, as provided in
Section 3.4 (the “ Severance
Pay ”) . At the
election of Gabriel, which election’ is to be made
within 14 days of the Termination Date, payment of the
Severance Pay shall be made in a lump sum or paid in equal
monthly installments during a period of up to one year
following the Termination Date. In the event that no election
is made, such payment will be made in a lump sum within 14
days of the Termination Date.
4.3
Change in Control .
