EXECUTIVE EMPLOYMENT AGREEMENT
This
Executive Employment Agreement ("Agreement") is made effective as
of
January 1, 2006 ("Effective Date"), by and between AUXILIO, Inc., a
Nevada
corporation ("Company") and Etienne Weidemann ("Executive").
The
parties agree as follows:
1.
Employment. Company hereby employs Executive, and Executive
hereby
accepts such employment, upon the terms and conditions set forth
herein.
2.
Duties.
2.1 Position. Executive is employed as President and Chief
Operating
Officer and shall have the duties and responsibilities assigned by
the Company's
Chief Executive Officer (CEO) and Board of Directors both upon
initial hire and
as may be reasonably assigned from time to time. Executive shall
perform
faithfully and diligently all duties assigned to Executive. Company
reserves the
right to modify Executive's position and duties at any time in its
sole and
absolute discretion.
2.2 Best Efforts/Full-time. Executive will expend Executive's
best
efforts on behalf of Company and its subsidiaries, and will abide
by all
policies and decisions made by Company, as well as all applicable
federal, state
and local laws, regulations or ordinances. Executive will act in
the best
interest of Company at all times. Executive shall devote
Executive's full
business time and efforts to the performance of Executive's
assigned duties for
Company, unless Executive notifies the CEO in advance of
Executive's intent to
engage in other paid work and receives the CEOs' express written
consent to do
so.
3.
Term.
3.1 Initial Term. The employment relationship pursuant to this
Agreement shall be for an initial term commencing on the Effective
Date set
forth above and continuing for a period of 2 (two) years following
such date
("Initial Term"), unless sooner terminated in accordance with
paragraph 7 below.
3.2 Renewal. On completion of the Initial Term specified in
subparagraph 3.1 above, this Agreement will automatically renew for
subsequent
12 month terms unless either party provides advance written notice
to the other
that such party does not wish to renew the Agreement for a
subsequent 12 months.
In the event either party gives notice of nonrenewal pursuant to
this
subparagraph 3.2, this Agreement will expire at the end of the
current term.
4.
Compensation.
4.1 Base Salary. As compensation for Executive's performance of
Executive's duties hereunder, Company shall pay to Executive an
initial Base
Salary of $175,000 for the first year, payable in accordance with
the normal
payroll practices of Company, less required deductions for state
and federal
withholding tax, social security and all other employment taxes and
payroll
deductions. In the event Executive's employment under this
Agreement is
terminated by either party, for any reason, Executive will be
entitled to
receive Executive's Base Salary prorated to the date of
termination. Such amount
shall eligible for increase to $190,000 effective January 1, 2007
in accordance
with the provisions set forth in Exhibit A.
<PAGE>
4.2 Incentive Compensation. Executive will be eligible to earn
incentive compensation in accordance with the provisions set forth
in Exhibit A.
4.3 Equity Compensation. Executive will be granted stock options
to
purchase 80,000 shares of the Company's Common Stock at an exercise
price equal
to the fair market value of the stock on the date of grant. The
options will
vest over three years.
5.
Customary Fringe Benefits. Executive will be eligible for all
customary
and usual fringe benefits generally available to executives of
Company subject
to the terms and conditions of Company's benefit plan documents.
Company
reserves the right to change or eliminate the fringe benefits on a
prospective
basis, at any time, effective upon notice to Executive.
6.
Business Expenses. Executive will be reimbursed for all
reasonable,
out-of-pocket business expenses incurred in the performance of
Executive's
duties on behalf of Company. To obtain reimbursement, expenses must
be submitted
promptly with appropriate supporting documentation in accordance
with Company's
policies.
7.
Termination of Executive's Employment.
7.1 Termination for Cause by Company. Although Company anticipates
a
mutually rewarding employment relationship with Executive, Company
may terminate
Executive's employment immediately at any time for Cause. For
purposes of this
Agreement, "Cause" is defined as: (a) acts or omissions
constituting gross
negligence, recklessness or willful misconduct on the part of
Executive with
respect to Executive's obligations or otherwise relating to the
business of
Company; (b) Executive's material breach of this Agreement; and (c)
Executive's
conviction or entry of a plea of nolo contendere for fraud,
misappropriation or
embezzlement, or any felony or crime of moral turpitude. In the
event
Executive's employment is terminated in accordance with this
subparagraph 7.1,
Executive shall be entitled to receive Executive's Base Salary
prorated to the
date of termination. All other Company obligations to Executive
pursuant to this
Agreement will become automatically terminated and completely
extinguished.
Executive will not be entitled to receive the Severance Payment
described in
subparagraph 7.3 below.
7.2 Termination Without Cause by Company/Severance; Change of
Control.
(a) Company may terminate Executive's employment under this
Agreement without Cause at any time on thirty (30) days' advance
written notice
to Executive. In the event of (i) such termination without Cause,
or (ii)
Executive's inability to perform the essential functions of
Executive's position
due to a mental or physical disability or Executive's death, or
(iii) in the
event of the termination of Executive without Cause following a
"Change of
Control" (as defined in Section 7.2(b) below), Executive will
receive the Base
Salary then in effect, prorated to the date of termination, and a
"Severance
Payment" equivalent to (a) payment of compensation for an
additional 12 months,
payable in accordance with Company's regular payroll cycle or lump
sum, and (b)
an additional provision of accelerating all unvested stock options
and warrants
provided that Executive: (i) complies with all surviving provisions
of this
Agreement as specified in subparagraph 13.8 below; and (ii)
executes a full
general release, releasing all claims, known or unknown, that
Executive may have
against Company arising out of or any way related to Executive's
employment or
termination of employment with Company.
<PAGE>
(b) As used herein, "Change of Control" means: (i) a sale of all
or
substantially all of the assets of the Company; (ii) a merger or
consolidation
in which the Company is not the surviving entity and in which the
holders of the
Company's outstanding voting stock immediately prior to such
transaction own,
immediately after such transaction, securities representing less
than fifty
percent (50%) of the voting power of the entity surviving such
transaction or,
where the surviving entity is a wholly-owned subsidiary of another
entity, the
surviving entity's parent; or (iii) a reverse merger in which the
Company is the
surviving entity but the shares of common stock outstanding
immediately
preceding the merger are converted by virtue of the merger into
other property,
whether in the form of securities of the surviving entity's parent,
cash or
otherwise, and in which the holders of the Company's outstanding
voting stock
immediately prior to such transaction own, immediately after such
transaction,
securities representing less than fifty percent (50%) of the voting
power of the
Company or, where the Company is a wholly-owned subsidiary of
another entity.
(c) In the event that the benefits provided to you under this
Agreement, and any other agreements, plans or arrangements to which
you may be a
party with the Company, cause you to incur an excise tax under
Section 4999 of
the Internal Revenue Code of 1986 (the "Code") or any corresponding
provisions
of applicable state tax law in connection with a Change of Control,
then the
Company will pay you an additional amount sufficient to reimburse
you for (i)
the excise tax imposed on such benefits, and (ii) the federal and
state income,
employment and excise taxes, determined on a fully "grossed-up"
basis, imposed
on the benefits payments provided. The Company shall be entitled to
withhold
from the payment required hereunder such taxes as it may be
required to withhold
under applicable tax law, and any such withheld taxes shall be
treated as paid
to you hereunder.
7.3 Voluntary Resignation by Executive for Good
Reason/Severance.
Executive may voluntarily resign Executive's position with Company
for Good
Reason, at any time on thirty (30) days' advance written notice. In
the event of
Executive's resignation for Good Reason, Executive will be entitled
to receive
the Base Salary then in effect, prorated to the date of
termination, and the
Severance Payment described in subparagraph 7.3. above, provided
Executive
complies with all of the conditions in subparagraph 7.3. above. All
other
Company obligations to Executive pursuant to this Agreement will
become
automatically terminated and completely
