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EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”)
is entered into and is effective as of June 18, 2007, by and
between CareGuide, Inc., a Delaware corporation (the
“Company”), and Thomas L. Tran
(“Employee”).
In consideration of the mutual covenants and
conditions set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1.
Employment . The
Company hereby employs Employee in the capacity of President and
Chief Financial Officer, reporting to the Company’s Chief
Executive Officer. Beginning no later than January 1, 2008,
Employee will also assume responsibility for all Company operations
as Chief Operating Officer. Employee accepts such employment and
agrees to diligently, conscientiously and exclusively perform such
services as are customary to such office and as shall from time to
time be assigned to him by the Chief Executive Officer or the
Company’s Board of Directors (the “Board”).
Employee’s employment will be on a full-time business basis
requiring the devotion of substantially all of his productive
business time for the efficient and successful operation of the
business of the Company.
2.
Conditional Agreement; Term
. The employment hereunder shall be for a one year
period commencing as of the date hereof, unless earlier terminated
as provided in Section 4 (the “Initial Term”). This
Agreement shall be automatically renewed for successive one-year
periods upon the expiration of the Initial Term unless earlier
terminated as provided in Section 4, unless either party serves
upon the other written notice of non-renewal at least ninety (90)
days prior to the expiration of the Initial Term or any subsequent
anniversary thereof .
The parties expressly agree that designation of a
term and renewal provisions in this Agreement does not in any way
limit the right of the parties to terminate this Agreement at any
time as hereinafter provided. Reference herein to the term of this
Agreement shall refer both to the Initial Term and any successive
term as the context requires.
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3.
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Compensation and Benefits
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3.1
Salary . For the
performance of Employee’s duties hereunder, the Company shall
pay Employee a salary at the annualized rate of $250,000 (the
“Base Compensation”).
(a) Employee will be guaranteed a bonus for
Employee’s work through December 31, 2007 based on the number
of days employed in 2007, divided by 365, times $125,000. Beginning
in calendar year 2008, and thereafter while this Agreement is in
effect, the Employee shall be eligible to receive a discretionary
calendar year annual bonus in an amount of up to fifty percent
(50%) of Base Compensation. The award of the bonus shall be subject
to the satisfaction of mutually agreed upon performance goals
beginning in the 2008 calendar year. Performance goals will be
established within the first ninety (90) days
of each calendar year, beginning with the 2008 calendar year. It
shall be the Employee’s obligation to initiate the goal
setting process by making a written recommendation to the CEO and
Board in advance of, or within the first quarter of, each calendar
year and the Board is under no obligation to consider a bonus for
the Employee should he fail to do so. If the Company and the
Employee are unable to agree on mutually acceptable performance
goals, then the Company shall not be responsible for the payment of
any bonus other than the initial guaranteed bonus described above.
The Company, in its sole discretion, shall determine the extent to
which the performance goals upon which the annual bonus is based
have been achieved. Employee must remain an active employee through
the end of
1
the applicable bonus year, unless Employee is
terminated Without Cause 1 or this Agreement is
terminated by Employee for Good Reason¹, and will not earn any
bonus if employment is terminated by Employee without Good
Reason¹ or by Company for Cause¹ before the end of the
bonus year.
3.3
Payment and Withholding . All payments required to be made by the Company to the
Employee shall be made in accordance with the Company’s
normal payroll practices and shall be subject to the withholding of
such amounts, if any, relating to tax and other payroll deductions
as the Company may reasonably determine should be withheld pursuant
to any applicable law or regulation.
3.4
Personnel Policies and Benefits
. Unless otherwise specified herein, the
Employee’s employment is subject to the Company’s
personnel policies and procedures as they may be interpreted,
adopted, revised or deleted from time to time in the
Company’s sole discretion. The Employee will be eligible to
participate on the same basis as similarly situated employees in
the Company’s benefit plans in effect from time to time
during his employment. For this purpose, Employee will be
considered “similarly situated” to the executive level
officers of the Company. All matters of eligibility for coverage or
benefits under any benefit plan shall be determined in accordance
with the provisions of the plan. The Company reserves the right to
change, alter, or terminate any benefit plan in its sole
discretion. While this Agreement is in effect
the Company agrees to maintain at its expense a group life
insurance program in which the Employee is eligible to apply for
coverage and name the beneficiary or beneficiaries and a group long
term disability insurance program in which the Employee is eligible
to apply for coverage.
3.5
Stock Options . As
resolved by the Company’s Board, Employee will participate in
the Company’s Stock Option Plan at an initial ownership level
of 1.75 million option shares. The Board has committed to hold an
interim meeting to grant these options effective on the date
employment begins. These shares will vest on a quarterly basis,
with 6.25% of this initial options grant vesting on the first day
of each quarter of a year following the Employee’s start
date. For example, the first vesting shall occur on September 18,
2007, followed by December 18, 2007, etc., until the entire initial
options grant is vested after four years. Should there be a change
of control of Company, Employee will vest immediately in all
outstanding shares. Should Company amend its capital structure,
including an expected new financing which would ultimately result
in the issuance of additional shares on a fully diluted basis,
Employee will be granted additional option shares that will
maintain Employee’s pro-rated ownership as of the start of
Employee’s employment on a fully diluted basis. In any case,
Employee’s ownership position will be no lower than 2.25% of
outstanding shares on a fully diluted basis, and this ownership
position will be protected and maintained through December 31,
2007. Additionally, the Employee’s ownership position will be
protected and maintained from January 1, 2008 through June 17,
2008, but only in the event that the expected new financing occurs
in that period, and it is understood that such protection exists
only for dilution caused by the new financing event. Protection for
the new financing event is up to and including an additional $20
million of funding.
3.6
Reimbursement of Expenses . Employee shall be eligible to be reimbursed for all
reasonable business expenses, including but not limited to expenses
for travel, meals, and entertainment incurred by Employee in
connection with and reasonably related to the furtherance of the
Company’s business in accordance with the Company’s
policy. Employee shall submit expense reports and receipts
documenting the expenses incurred in accordance with Company
policy.
3.7 Relocation and
Commutation Expenses. Company agrees to
reimburse Employee up to $75,000, with any taxable reimbursements
grossed up for income taxes, to offset any of the following
expenses Employee may incur in connection with his relocation
and/or commute: real estate commission, closing costs, physical
move of personal belongings; or air fare and travel expenses
to/from your current
_________________________
1 Terms
defined below
2
residence to company headquarters; and/or living
expenses, including hotel or apartment lease, car rental, health
club membership, other reasonable living expenses and incidentals.
All expenses will be reimbursed
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