EXHIBIT
10.1
EXECUTIVE
EMPLOYMENT AGREEMENT
This
Employment Agreement (“Agreement”), is entered
into as of October 11, 2007 (the “Effective Date”)
by and between Location Based Technologies, a Nevada
Corporation (“Company”), and David Morse
(“Executive”).
W
I T N E S S E T H:
WHEREAS,
Company is a technology and telecommunications company that
has designed and patented wireless communications products and
systems combining advanced wireless technology to provide
features of location based devices; and
WHEREAS,
Company wishes to assure itself of the services of Executive
for the period and upon the terms and conditions provided in
this Agreement; and
WHEREAS,
Executive is willing to serve in the employ of Company on a
full-time basis for said period and upon the terms and
conditions provided in this Agreement.
NOW,
THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto agree as
follows:
1.
Employment .
a.
Term and Title . Subject to the terms and
conditions of this Agreement, Company hereby agrees to employ
Executive as Chief Executive Officer and Co-President, or in
such other responsible or additional executive capacity as set
forth herein, commencing on the Effective Date and continuing
in full force and effect until the Fifth (5) anniversary of
the Effective Date; provided however, that the term of this
Agreement shall automatically be extended for additional
one-year periods unless either party provides written notice
to the contrary at least 60 days prior to the end of the term
then in effect (“Employment Term”).
b.
Duties and Responsibilities . During the
Employment Term, Executive agrees to devote his/her working
time and attention to the business and affairs of Company and
to faithfully and efficiently perform all reasonable
responsibilities and duties commensurate with his/her position
in Company to the best of his/her skill and abilities, in a
competent and professional manner. Executive agrees
to fulfill such general management duties and responsibilities
as are consistent with his/her position. In
addition, Executive shall serve as a director of the Company
without additional compensation if elected by the shareholders
of the Company.
c.
Exclusive Services . During the Employment
Term, Executive further agrees not to engage in any business
or perform any services that are competitive with the business
of or services provided by Company or that may be deemed to
constitute a conflict of interest. Notwithstanding
anything to the contrary contained in this Section 1(c),
Executive shall not be prohibited from (i) rendering services
to relatives, charitable or community organizations; (ii)
managing his/her personal investments in such manner as to not
interfere with the performance of his/her duties hereunder; or
(iii) owning no more than 4.99% of the equity
securities of a corporation or other entity, whose
securities are registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended.
2.
Compensation; Benefits . During the
Employment Term, Executive shall be entitled to the
compensation package and benefits provided below:
a.
Base Salary and Stock Compensation . During
the Employment Term, in full consideration for the services to
be rendered by Executive and in complete discharge of
Company’s salary obligations hereunder, Company shall
pay to Executive a base salary (“Base Salary”) of
Ten-Thousand dollars ($10,000) per month, which amount shall
be paid to Executive in accordance with Company’s
payroll policies as in effect from time to time for senior
executives of Company, subject to all standard payroll
deductions, if any.
b.
Adjustments to Base Salary . The base
monthly salary shall be automatically increased by $2,500 for
each performance deliverable as follows: (i) upon completion
and FCC approval of the PocketFinder device; (ii) at such time
as the Company receives revenue from initial sales of its
products; and, (iii) upon attaining 250,000
subscribers. Executive’s monthly base salary
shall then be increased by $5,000 upon attaining 500,000
subscribers and by $10,000 dollars upon attaining the major
milestone of 1,000,000 subscribers. Monthly
salaries will continue to be increased by $10,000 dollars upon
each additional 500,000 subscribers added above the
1,000,000-customer base. Furthermore, monthly
salary bases will be increased by $10,000 for each country the
Company’s products successfully achieve cash flow
in.
c.
Additional Compensation . In the event that
Company is issued FCC approval on the Personal Locator, the
Executive will receive a bonus of $100,000 to be
negotiated in Cash or Common Stock (Executive’s choice)
to be exercised at $1.00 per share equating to 100,000
shares.
d.
Bonus . Each year during the Employment
Term, the Company may pay a bonus (the “Bonus”) to
Executive, which may be part of a general bonus plan
established by the Board.
e.
Stock Incentive Plan/Options for Performance
. Executive shall be entitled to participate in the
Stock Incentive Plan of the Company on such terms as the Board
of Directors deems appropriate from time to time.
f.
Expenses . Company recognizes that in
connection with Executive’s performance of
Executive’s duties and obligations under this Agreement,
Executive shall incur certain expenses of a business
character. Company shall reimburse Executive for
all ordinary and reasonable expenses incurred by Executive in
connection with performance of his/her duties hereunder,
provided that Executive submits to Company substantiation of
such expenses.
g.
Fringe Benefits/Insurance . Executive shall
be entitled to participate in any and all benefits and
perquisites as are generally provided by the Company for the
benefit of its executive employees including, but not limited
to, eligibility for participation in any group life, health,
dental, vision, hospitalization, disability or accident
insurance, pension plan, retirement savings plan, 401(k) plan,
or other such benefit plan or policy which may presently be in
effect or which may hereafter be adopted by the Company;
provided, however, that nothing herein contained shall be
deemed to require the Company to adopt or maintain any
particular plan or policy, or to preclude the Company from
amending or terminating any plan or policy.
h.
Vacation and Holidays . Executive shall be
entitled to 4 weeks paid vacation per
year. Executive shall also be entitled to all paid
holidays given by Company to its employees.
3.
Termination of Employment .
a.
Death . In the event of Executive’s
death occurring any time during the Employment Term, the
Agreement shall automatically terminate in which event Company
shall thereupon be released and discharged of and from all
further obligations under this Agreement except as in Section
4 hereof.
b.
Incapacity . In the event of
Executive’s physical or mental disease or disability, to
such a degree as to render Executive unable to substantially
perform all of the duties and responsibilities with which
Executive is then charged for a period of 180 consecutive days
(“Incapacity”), Company may terminate
Executive’s employment upon written notice to Executive
that he is being terminated for
Incapacity. Executive’s termination due to
Incapacity shall be effective the later of (i) the expiration
of the above period of Incapacity or (ii) 30 days after the
date of such notice.
c.
Resignation . Executive may resign his/her
current position with Company and thereby terminate his/her
employment, for any reason by giving Company 90 days advance
written notice.
d.
Termination for Cause . Notwithstanding
anything to the contrary contained in this Agreement, Company
may, by written notice to Executive, immediately terminate
Executive’s employment for
“Cause.” For purposes of this
Agreement, “Cause” shall mean that one of the
following events (each, a “Cause Event”) shall
have occurred after the Effective
Date: (i) Executive’s ongoing
material breach of a material provision of this Agreement,
following written notice of such breach from the board of
directors of Company and a reasonable period of time to cure;
(ii) chronic alcoholism or any other form of addiction that
prevents Executive from performing the essential functions of
his/her position with a reasonable accommodation.
e.
Suspension for Cause . Company may, by
written notice to Executive, suspend the employment of
Executive only for Cause. If Company exercises such
right of suspension, Executive’s obligation to render
services, but not Company’s obligation to pay
Executive’s Base Salary, shall be suspended for the
period of time set forth in the notice; but in no event shall
such suspension exceed a period of time equal to 3 consecutive
months. Company may, in its reasonable discretion
by written notice, terminate the employment of Executive at
the expiration of the suspension period.
f.
Termination without Cause . Any of the
following shall constitute a “termination without
cause”: (i) termination of Executive’s
full-time employment hereunder for any reason other than set
forth in Sections 3(a) through (e) above; (ii) failure to
elect or re-elect, or appoint or re-appointment, Executive as
Co-President and Chief Executive Officer of the Company,
unless consented to by Executive; (iii) a material change in
Executive’s functions, duties or responsibilities with
the Company, which change would cause Executive’s
position to become one of substantially less responsibility or
scope, unless consented to by the Executive; or (iv) a
material reduction in benefits or perquisites to Executive
from those being provided as of the Effective Date, unless
consented to by Executive.
4.
Rights Upon Termination .
a. Upon
termination of Executive’s employment pursuant to
Section 3(a), (b) or (c) hereof, Executive shall receive any
salary or monies previously due and owing to Executive and
remaining unpaid; (ii) outstanding reimbursable business
expenses; (iii) all earned but unused vacation time; (iv) life
insurance benefits, if applicable, and (v) all other benefit
entitlements in which Executive is a participant.
b. In
the event Executive’s employment is terminated by
Company for Cause pursuant to Sections 3d or (e) above,
Executive shall be entitled to payment for (i) all outstanding
reimbursable business expenses, (ii) any unpaid Base Salary or
incentive compensation that has accru
