EXHIBIT 10.13
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive
Employment Agreement
(this "AGREEMENT") is made and
entered into as of this 28 day of February, 2005 (the "EFFECTIVE DATE"), by
and
between Patron Systems, Inc., a Delaware corporation (the
"Company") and John W.
Hammon ("EXECUTIVE").
1.
ENGAGEMENT AND DUTIES.
1.1 Commencing
upon the Effective Date, and upon the terms and
subject to the
conditions set forth
in this Agreement,
the
Company hereby engages and employs Executive as an officer of
the Company, with the title and designation of Chief Marketing
Officer of
the Company. Executive hereby accepts such
engagement and employment.
1.2
Executive's duties
and responsibilities
shall
be those
normally and
customarily
vested in the office of Chief
Marketing
Officer of
a corporation, subject to the
supervision, direction
and control of the
Board of Directors
of the Company
("BOARD"). In
addition, Executive's duties
shall include
those duties and services for the
Company and
its affiliates as the Board shall from time to time reasonably
direct. Executive
shall report
directly to the
President of
the Company.
1.3 Executive
agrees
to devote his primary business time,
energies,
skills, efforts
and attention to his duties
hereunder, and will
not, without the prior written consent of
the Board, which
consent will not be
unreasonably
withheld,
render any material
services to any other
business concern.
Executive will use his
best efforts and abilities faithfully
and diligently to promote the Company's business interests.
1.4 Except for
routine travel incident to the business of the
Company, Executive
shall perform his
duties and
obligations
under this Agreement
principally from an
office provided by
the Company in Aliso Viejo, California, or such other location
in Orange County,
California,
as the Board may from
time to
time determine.
2. TERM
OF EMPLOYMENT. Unless earlier terminated pursuant to the
provisions hereof,
the initial term
("INITIAL TERM") of Executive's
employment under this
Agreement shall be for
a period of one (1) year
commencing on the
Effective Date. Said term shall be automatically
renewed thereafter for
successive one (1)-year terms (the Initial Term
and any renewal terms,
the "TERM")
unless the Board or
any successor
entity provides
Executive with written notice 90 days prior to the
expiration of the then current Term.
3.
TERMINATION.
3.1
Executive's
employment pursuant
to this Agreement shall
terminate on the earliest to occur of the following:
(a) the
expiration of the Term;
(b) the death
of Executive;
(c) delivery
to Executive of written notice of
termination by the Company if Executive shall suffer
a "permanent
disability," which for purposes of this
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Agreement shall mean a physical or mental disability
which, in the
reasonable judgment of
the Board, is
likely to render
Executive unable
to perform his
duties and obligations
under this
Agreement for 90
days in any 12-month period;
(d) delivery
to Executive of written notice of
termination by the Company "for cause," by reason of:
(i) any act or omission knowingly undertaken or
omitted by
Executive with the intent of causing
damage to the Company or its affiliates, its
properties, assets or
business, or its stockholders,
officers, directors
or employees; (ii) any act of
Executive involving
a material
personal profit to
Executive, including,
without limitation, any fraud,
misappropriation or embezzlement,
involving
properties, assets or
funds of the Company or any of
its subsidiaries;
(iii)
Executive's
consistent
failure to
perform his normal duties or any
obligation under any provision of this Agreement, in
either case,
as directed by the Board; (iv)
conviction of, or
pleading nolo
contendere
to any
crime or offense
involving monies or
other property
of the Company;
(e) delivery
to the Company of written notice of
termination by Executive "for good reason," by reason
of (i) a material
change in Executive's function,
authority, duties,
compensation or responsibilities,
without Executive's
express written consent; (ii) a
substantial difference
of opinion between
Executive
and the Board develops, or other circumstances should
arise such that
Executive, in good
faith, no longer
believes that he can
function effectively
as Chief
Marketing Officer of the Company; (iii) any material
failure by the
Company to comply with any of the
provisions of
this Agreement; or (iv) any other
matter or circumstance requested by the Board if
either (a)
made with the intent of hindering
Executive in the performance of his duties hereunder
or creating an
incentive for
Executive to
exercise
his rights under this
Section 3.1(e)
hereof or (b)
the effect
of such request could reasonably be
expected to hinder
Executive in the
performance of
his duties
hereunder or create an incentive for
Executive to exercise
his rights under this
Section
3.1(e); or
(f) delivery
to Executive of written notice of
termination by the Company "without cause."
3.2 With
regard to Section 3.1(d), the Company shall first provide
Executive with
30-days written notice of such alleged
misconduct,
including a
specific description of such
misconduct
sufficient to allow
Executive an
opportunity
to
correct such
noted problems. Executive shall have the
opportunity to
appear before the Board, with his legal
counsel, to present
any relevant
information he believes the
Board should consider. Executive shall not be terminated under
Section 3.1(d)
unless, after the notice period expires,
Executive continues
to fail to
satisfactorily
perform his
duties.
3.3 With
regard to Section
3.1(e), if Executive
determines that
"good reason" as defined in Section 3.1(e) exists, Executive
shall so notify the Company in writing. The Company shall have
thirty (30) days to
remedy the facts and
circumstances that
provided "good
reason" as defined in Section 3.1(e). If
adequate remedy has occurred, Executive shall continue in
the
employ of the Company
as if no notice had been given. If
adequate remedy
has not occurred, Executive may, at his
option, terminate his
employment for "good reason" as defined
in Section 3.1(e).
4.
COMPENSATION; EXECUTIVE BENEFIT PLANS.
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4.1 The
Company shall pay to
Executive a base salary at an annual
rate of $180,000
during each
fiscal year of this
Agreement
("BASE SALARY"),
subject to adjustment
on an annual basis by
the Board. The Base
Salary shall be
payable in
installments
throughout the year in
the same manner and at
the same times
the Company pays base salaries to other executive officers of
the Company. Executive shall receive a commission of 1% on all
product sales of the
Company. This
percentage is subject
to
review at the end of each fiscal year. The Executive will
receive a non-recoverable draw of $60,000 during the first six
months of this agreement. In the event that Executive's
employment is
terminated pursuant to
SECTION 3.1(E) OR
(F),
above, Executive shall
continue to receive
Executive's Base
Salary and shall be entitled to continued participation in the
Company Executive
Benefit Plans (as defined below) for a
period of six (6) months. Notwithstanding the foregoing,
the
Company shall not be
obligated to pay
Executive any
amounts
hereunder following the termination of Executive's employment
pursuant to SECTION 3.1(E) OR (F), above, from and after any
time that Executive accepts an employment or consulting
position with any
person or entity that is determined by the
Board, in the exercise of its reasonable discretion, to be a
competitor of the Company.
4.2 In
addition to the Base Salary to be paid to Executive
hereunder, the
Company shall pay a performance bonus (the
"BONUS") determined in accordance with a management incentive
plan to be agreed upon between Executive and the Board on an
annual basis. The
management incentive
plan will provide for
the payment of a Bonus equal to twenty-five percent (25%) of
Executive's
then-current Base
Salary upon achieving the
"target" objectives
set forth in the management incentive
plan, and payments of such lesser or greater
amounts upon
achieving results
less than or greater than the "target"
objectives as shall be contained in the management incentive
plan.
4.3 Executive
shall be entitled each year to vacation for a
minimum of four (4)
calendar weeks, plus such additional
period or periods as the Board may approve in the exercise of
its reasonable discretion, during which time his
compensation
shall be paid in full.
4.4 Executive
shall be entitled to reimbursement from the Company
for the reasonable
costs and expenses
which he incurs in
connection with
the
performance of his
duties and obligations
under this Agreement in a manner
consistent with the Company's practices and policies as adopted or
approved from
time to time by the Board for executive officers.
4.5 The
Company may deduct from any compensation payable to
Executive the minimum
amounts sufficient to
cover applicable
federal, state
and/or local income tax withholding, old-age and survivors' and other social
security payments, state disability and other insurance premiums
and payments.
5.
OTHER BENEFITS. During the term of his employment hereunder,
Executive
shall be eligible to participate in all operative employee benefit and welfare
plans of the Company
then in effect
from time to time and
in respect of which
all executive officers of the Company and its affiliates
generally are
entitled
to participate
("COMPANY EXECUTIVE
BENEFIT PLANS"),
including, to the
extent
then in effect, group
life, medical,
disability and other insurance plans, all
on the same
basis applicable to employees of the Company whose level of
management and authority is comparable to that of Executive.
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6.
CONFIDENTIALITY OF PROPRIETARY INFORMATION AND MATERIAL.
6.1 INDUSTRIAL
PROPERTY RIGHTS. For the purpose of t
