EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT (“ Agreement ”) is made and entered
into effective as of May 19, 2009 (“ Effective Date
”) by and between LiveDeal, Inc., a Nevada corporation (the
“ Company ”) and Richard F. Sommer (“
Executive ”).
In consideration of the mutual promises,
covenants and agreements herein contained, intending to be legally
bound, the parties agree as follows:
1.
Employment . The Company hereby agrees to employ
Executive, and Executive hereby agrees to serve, subject to the
provisions of the Agreement, as an employee of the Company in the
position of President and Chief Executive
Officer. Executive will perform all services and acts
reasonably necessary to fulfill the duties and responsibilities of
his positions and will render such services on the terms set forth
herein and will report to the Chairman of the Board of Directors of
the Company (the “ Chairman ”) and the
Company’s Board of directors (the “ Board
”). Executive will have such other executive and
managerial powers and duties with respect to the Company as may
reasonably be assigned to him by the Chairman and the Board, to the
extent consistent with his positions and status as set forth
above. Executive agrees to faithfully perform the lawful
duties assigned to him pursuant to this Agreement to the best of
his abilities and to devote all of his business time and
attention to the Company’s business and not to any other
business. Notwithstanding the foregoing, Executive may
(a) serve on civic or charitable or not-for-profit industry related
organizations, (b) engage in charitable, civic, educational,
professional community and/or industry activities without
remuneration therefor and (c) manage personal and family
investments, so long as such activities do not interfere with the
performance of Executive’s duties under this
Agreement. Executive also may serve on the board of
directors or advisory committee of other for-profit enterprises
subject to the consent of the Chairman and the Board, which shall
not unreasonably be withheld; provided, however that Executive
shall not serve on more than three such boards of directors
(including the Company’s) at the same time.
2.
Term . This Agreement is for a three-year period
(the “ Term ”) commencing on the Effective Date
hereof and terminating on the third anniversary of the Effective
Date, or upon the date of termination of employment pursuant to
Section 8 of this Agreement; provided, however, that the
Term may be extended as mutually agreed to by the
parties.
3.
Place of Performance . Executive may perform his
duties and conduct his business on behalf of the Company at remote
locations of his choosing by telecommuting; provided that such
practice shall not substantially interfere with the performance of
Executive’s duties hereunder and provided, further that at
least 50% of his time in performing his duties is spent physically
in the Company’s offices in either Santa Clara, CA or Las
Vegas, NV.
(a)
Salary . Executive shall be paid a salary at the
annual rate of $300,000 (the “ Salary ”),
payable in accordance with the Company’s regular payroll
practices, subject to all applicable withholdings, including
taxes.
(b)
Performance Bonuses . Executive will be entitled
to receive up to $100,000 per year of a performance bonus in the
event the Company reaches certain performance measures established
by the Compensation Committee of the Board or the entire
Board. All bonuses payable under this Section
4(b) will be subject to all applicable withholdings, including
taxes.
(c)
Success Fee . In the event of the (i) sale of the
Company (by merger, consolidation, sale of all or substantially all
of its assets, sale of control or other means) in a single
transaction or series of related transactions or (ii) disposition
of assets, in each case that results in either proceeds received by
the Company’s shareholders or a subsequent distribution of
proceeds to the Company’s shareholders in excess of
$9,000,000 beginning from the date of this Agreement (including
pursuant to a dividend of any cash held by the Company as of the
date of this Agreement), the Company agrees to pay you a fee in
cash (“ Success Fee ”) equal to 2% of the amount
received directly by the Company’s shareholders in excess of
the $9,000,000 if you have performed the services required of you
to the reasonable satisfaction of the Company as determined by the
Board of Directors of the Company. If earned, you
will receive the Success Fee at the time the shareholders receive
the qualifying proceeds or distribution.
You agree to advise, assist and represent the
Company in connection with any disposition of assets or sale of the
Company, including but not limited to (i) identifying, introducing
and consulting as to strategy for initiating discussions with,
potential purchasers, (ii) assisting in structuring the
transaction, (iii) participating actively in any negotiation of the
terms and conditions of the transaction, (iv) assisting in the
preparation of definitive documentation, and (v) assisting the
Company to close the transaction, in each case to the extent
requested and in the manner directed by the Company’s Board
of Directors.
The Company, through its Board of Directors,
reserves total and unrestricted control of any such transaction,
disposition or distribution including, without limitation, the
right not to enter into or consummate any such transaction,
disposition or distribution (irrespective of the reason therefor),
to determine the value or price and other terms and the value of
any non−cash consideration. Your entitlement to the Success
Fee is dependent on the actual closing or consummation of the
transactions and actual distribution or realization or proceeds to
or by the Company’s shareholders without regard to the reason
for a failure or inability to do so.
5.
Business Expenses . During the Term, the Company
will reimburse Executive for all reasonable business expenses
incurred by him in connection with his employment and the
performance of his duties as provided hereunder, upon submission by
the Executive of receipts and other documentation in conformance
with the Company’s normal procedures for executives of
Executive’s position and status.
6.
Vacation, Holidays and Sick Leave . During the Term,
Executive will be entitled to four weeks of paid vacation per year,
paid holidays and paid sick leave, all in accordance with the
Company’s standard policies for its officers, as may be
amended from time to time.
7.
Benefits . During the Term, Executive will be
eligible to participate fully in all health and benefit plans
available to senior officers of the Company generally, as the same
may be amended from time to time by the Board.
8.
Termination of Employment .
(a) Notwithstanding
any provision of this Agreement to the contrary, the employment of
Executive hereunder will terminate on the first to occur of the
following dates:
(i) the
date of Executive’s death;
(ii) in
the event that Executive has experienced a Disability (as defined
below), the date on which the Company gives Executive
notice of termination on account of Disability;
(iii) in
the event that Executive has engaged in conduct that
constitutes Cause (as defined below), the date on
which the Company gives notice of termination for
Cause;
(iv) expiration
of the Term; or
(v) the
date on which the Company gives Executive notice of termination for
any reason other than the reasons set forth in Sections
8(a)(i) through (iv) above.
(b) For
purposes of this Agreement, “ Disability ” will
mean an illness, injury or other incapacitating condition as a
result of which Executive is unable to perform, with reasonable
accommodation, the services required to be performed under this
Agreement for 10 consecutive days during the
Term. Executive agrees to submit to such medical
examinations as may be necessary to determine whether a Disability
exists, pursuant to such reasonable requests made by the Company
from time to time. Any determination as to the existence
of a Disability will be made by a physician mutually selected by
the Company and Executive.
(c) For
purposes of this Agreement, “ Cause ” will mean
the occurrence of any of the following
