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EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”)
is entered into and is effective as of June 25, 2007, by and
between CareGuide, Inc., a Delaware corporation (the
“Company”), and John R. (“J”) Pegues
(“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 Executive Vice
President and Chief Marketing and Sales Officer, reporting to the
Company’s Chief Executive Officer. Employee accepts such
employment and agrees to diligently and conscientiously 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; provided, however, that the Company has
granted Employee permission to continue the unwinding of his
consulting business, and to complete work on projects and
transition of assignments from his consulting business, through
August 31, 2007.
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. 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 $225,000 (the
“Base Compensation”). Employee’s Base Salary will
be subject to annual review.
(a) Employee will be eligible for a bonus for
Employee’s work through December 31, 2007, based on the
number of days employed in 2007, divided by 365, times $112,500,
and will receive such bonus if he achieves the goals outlined in
Exhibit A. 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 Employee’s satisfactory
achievement of mutually agreed upon performance goals. These
performance goals will be established within the first sixty (60)
days of the 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 set
the bonus goals after consultation with the Employee. 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; provided, however, that Employee’s achievement of
said goals shall to the
greatest extent possible be measured by objective,
versus subjective, criteria to ensure fairness to Employee in any
such determination process. Employee’s eligibility for any
bonus upon termination either without Cause or for Good Reason
shall be as set forth in paragraph 4.2(b) of this Agreement. For
any other termination, employee must remain an active employee
through the end of the applicable bonus year, and will not earn any
bonus if employment terminates for any other reason before the end
of the bonus year.
(b) Employee shall be eligible to participate in any
incentive compensation plans Company approves for its executive
level employees and/or officers from time to time. The Employee
also will be eligible during the term of this Agreement for such
other bonus payments as may be awarded to the Employee by the
Company.
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 (“Plan”) at an
initial ownership level of one (1) million option shares
(“the Option”). The Board has committed to hold an
interim meeting to grant these options effective on the date
employment begins. The per share exercise price of the Option will
be equal to the fair market value of the Company’s common
stock at the close of trading on June 25, 2007 (37 cents). A total
of 25% of these shares will vest on each anniversary date of
Employee’s employment over a period of four (4) years, and
will be exercisable in accordance with a Stock Option Agreement to
be executed pursuant to the Company’s Stock Option
Plan.
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. If Employee and
Company decide that Employee needs to relocate to the
Company’s corporate office or other Company office, Company
agrees to reimburse Employee a maximum of $50,000 for reasonable
expenses incurred in connection with his relocation, including at a
minimum the following: packing and moving of Employee’s
household and office goods and automobiles, all customary closing
costs, including realtor fees, on the sale of Employee’s
Pennsylvania residence, as well as the closing costs on his new
residence where relocated, up to three company-paid house-hunting
trips for employee and his family, and temporary living and
storage
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of household goods for up to six months. All closing
costs will be advanced to employee upon receipt of a
realtor’s closing cost sheet with good faith closing cost
estimates. All other expenses will be reimbursed to Employee upon
his submission of receipts for same.
4.1
Termination Events .
The employment of the Employee and the Term of this Agreement will
terminate upon the occurrence of any of the follo
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