Attached files
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| 8-K/A - 8-K/A - Boomerang Systems, Inc. | v195406_8ka.htm |
EXECUTIVE
EMPLOYMENT AGREEMENT
This
Executive Employment Agreement (“Agreement”) is made and effective as of August 21, 2010, by and
between Boomerang Systems, Inc. (the "Company"), a Delaware corporation, with
its principal place of business at 35 Madison Avenue, Morristown, New
Jersey and Mark Patterson (“Executive”) an individual having a
mailing address at 40 Minnisink Road, Short Hills, New Jersey
07078-1920.
NOW,
THEREFORE, the parties hereto agree as follows:
1.
Employment.
Company
hereby agrees to employ Executive as its Chief Executive Officer and Executive hereby
accepts such employment in accordance with the terms of this Agreement and the
terms of employment applicable to regular employees of Company. In the event of
any conflict or ambiguity between the terms of this Agreement and terms of
employment applicable to regular employees, the terms of this Agreement shall
control.
2.
Duties of
Executive.
The
duties of Executive shall include the performance of all of the duties typical
of the office held by Executive as described in the bylaws of the Company and
such other duties and projects as may be assigned by the Board of Directors of
the Company that are compatible with Executive’s position and duties, including,
but not limited to, the development and implementation of the Company’s business
plan, the development of global strategic relationships, and the hiring, firing,
and compensation of the Company’s executive officers. Executive shall
report directly to the Board of Directors of the Company. Executive
shall devote the majority of his productive time, ability and attention to the
business of the Company and shall perform all duties in a professional, ethical
and businesslike manner. Company acknowledges that Executive
currently performs advisory services for entities other than Company and may in
the future accept new engagements to perform advisory services for entities
other than Company, including but not limited to appointment to one or more
board(s) of directors so long as such
engagements: i) do not interfere with Executive’s performance under this
Agreement; and ii) are not with entities that are direct or indirect competitors
of Company in connection with automated parking systems.
3.
Compensation.
Executive
will be paid compensation during the Agreement as follows:
A.
Salary. A base salary of $200,000 per year, payable in installments
according to the Company’s regular payroll schedule. The base salary shall
be adjusted upward at the discretion of the board of directors; provided,
however, that Executive’s base salary shall be adjusted upward at the beginning
of the second two-year Term (if any) in an amount to be determined by the
Company’s Board of Directors in the reasonable, good faith exercise of its
discretion, with input from Executive, taking into account (among other things)
the performance of the Company and Executive.
B. Grant
of Restricted Shares/Warrants.
1. Restricted
Shares. As additional compensation, Company agrees to grant to
Executive restricted shares of the Company stock on the dates and in the amounts
identified below so long as Executive remains employed by Company (except as
expressly provided herein):
|
At
execution of this Agreement:
|
1,800,000
shares
|
|
|
February
1, 2011:
|
1,400,000
shares
|
|
|
August
1, 2011:
|
1,400,000
shares
|
|
|
February
1, 2012:
|
1,400,000
shares
|
|
|
August
1, 2012:
|
1,200,000
shares
|
|
|
TOTAL:
|
7,200,000
shares
|
Company
agrees to pay Federal and State Income taxes incurred by Executive as part of
the grant when due. The restricted shares to be issued to Executive
(the “Restricted Shares”) shall be subject to the restrictions, terms and
conditions no less favorable to Executive than those (a) restricted shares sold
by the Company in the June 2010 private placement, and (b) hereinafter granted,
sold, or issued to other employees, entities, or persons.
2. Warrants.
As additional compensation, Company agrees to grant to Executive five (5) year
warrants to purchase Restricted Shares of the Company stock on the dates and in
the amounts identified below so long as Executive remains employed by Company
(except as expressly provided therein) and at a purchase price of twenty five
cents ($0.25) per share upon terms and conditions no less favorable to Executive
than those (a) issued by the Company in the June 2010 private placement, and (b)
hereinafter granted, sold, or to other employees, entities, or
persons:
|
At
execution of this Agreement:
|
900,000
warrants
|
|
|
February
1, 2011:
|
700,000
warrants
|
|
|
August
1, 2011:
|
700,000
warrants
|
|
|
February
1, 2012:
|
700,000
warrants
|
|
|
August
1, 2012:
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600,000
warrants
|
|
|
TOTAL:
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3,100,000
warrants
|
Company
agrees to pay Federal and State Income taxes incurred by Executive as part of
the grant when due.
C. Purchase
of Restricted Shares/Grant of Warrants. Executive will purchase
1,000,000 Restricted Shares of the Company from the Company (“Purchased Shares”)
at a purchase price of twenty five cents ($0.25) per share within twenty (20)
days of employment as CEO. At the time of Executive’s purchase of the
Purchased Shares, Company will grant Executive five (5) year warrants to
purchase up to 1,000,000 Restricted Shares of the Company from the Company at a
purchase price of twenty five cents ($0.25) per share. This purchase
and grant will be upon terms and conditions no less favorable to Executive than
(a) restricted shares sold/warrants issued by the Company in the June 2010
private placement, and (b) hereinafter granted, sold, or issued to other
employees, entities, or persons.
D. Preemptive
Rights. All restricted shares and warrants that have been or shall be
purchased, granted, or issued to Executive shall, so long as he is employed by
the Company, have preemptive rights so that Executive at all times shall be
entitled, but not required, to maintain his then pro rata share of the Company’s
issued and outstanding shares and warrants through purchase each time the
Company makes offers to others of shares and/or warrants.
E. Bonus. For
every fiscal year after 2010, Executive shall be eligible for an annual cash
incentive bonus (“Annual Bonus”). The amount of the Annual Bonus (if
any) shall be determined by the Company’s Board of Directors in the reasonable,
good faith exercise of its discretion, with input from Executive, taking into
account (among other things) the performance of the Company and
Executive. The Annual Bonus (if any) in respect of each fiscal year
shall be paid to Executive on or before September 1 of the then current fiscal
year.
F. Executive’s
total compensation in all forms received in any given fiscal year (except for
fiscal year 2010) shall not be less than the total annual compensation in all
forms received of any single employee of the Company for the given
year.
4.
Benefits.
A.
Medical
Insurance. Company agrees to provide Executive with a medical,
hospital and dental plan in the amount equal to 85% of total premium for himself
personally and 65% for his spouse and children, as approved by Company, during
this Agreement. Executive shall be responsible for payment of any federal
or state income tax imposed upon these benefits. Executive’s benefits
under such plans shall be on terms no less favorable than those made available
to any of the Company’s executive officers.
B.
Stock Option
Plans. Executive shall be entitled to participate in any Stock
Option Plan, incentive compensation plan, 401(k) Plan, and any similar plans
adopted by Company on terms no less favorable than those made available to any
of the Company’s executive officers.
C.
Expense
Reimbursement. Executive shall be entitled to reimbursement for all
reasonable expenses, including travel and entertainment, incurred by Executive
in the performance of Executive’s duties. Executive will maintain records
and written receipt and Expense Reports as required by the Company policy
generally applicable to executive officers and reasonably requested by the board
of directors to substantiate such expenses. The Company agrees that
reimbursable expenses shall include fuel costs for Executive to fly his single
engine airplane for Company business on trips provided that such reimbursable
amount is equal to or less than the cost of a first class ticket on a commercial
air carrier for the same route.
5. Representations,
Warranties, and Covenants of the Company.
Company
represents, warrants, and covenants as follows:
A. As
of the date this Agreement is executed, the Company shall have secured and
thereafter shall maintain in force a Directors and Officers liability insurance
policy with a face amount of $10,000,000, covering Executive for all claims made
against Executive during, and against Executive in respect of, the period he is
a director, officer, or employee of the Company. This Section 5(A)
shall survive termination of Executive’s employment for any reason.
B. As
of the Company’s execution of this Agreement, Executive shall have been
elected Chief Executive Officer, and the Company shall use its reasonable
efforts to cause Executive to continue to hold the office of Chief Executive
Officer so long as Executive remains an employee of
Company. Consistent with its duties and obligations under Delaware
Law, so long as Executive remains an employee of Company, Company shall
recommend to the Board of Directors to elect him to the Board of Directors if
and when a seat becomes available; provided, however, if so elected, Executive
agrees he will immediately resign as a director if his employment is terminated
under this Agreement.
C. Promptly
at such times required by the Securities Exchange Act of 1934 (1934 Act),
Company shall timely file SEC Rule 13D and 13G filings under the 1934 Act
related to Executive’s ownership or disposition of Company
securities.
6.
Term and
Termination.
A.
The Initial Term of this Agreement shall commence as of August 21, 2010 and it
shall continue in effect until September 30, 2012. Thereafter, the
Agreement shall be renewed automatically for additional Terms of two-year
periods (running from October 1 until September 30 two years later) unless the
Company or the Executive shall give its/his written notice of intention not to
renew the Agreement at least twenty-one (21) days before the end of the then
current Term.
B. This
Agreement may be terminated by Executive at Executive’s discretion, or by the
Company at its discretion, by providing at least ten (10) days prior written
notice to the other. In the event of termination by Executive
pursuant to this subsection, Company may immediately relieve Executive of all
duties, provided that Company shall pay Executive at the then applicable base
salary rate to the termination date included in Executive’s original termination
notice. Except as expressly provided herein, in the event of
termination by Executive pursuant to this subsection, Executive will forfeit any
rights to receive restricted shares or an incentive bonus under this Agreement
not granted as of the date of termination.
C.
In the event that Executive is in willful breach of any material obligation owed
Company in this Agreement, willfully and habitually neglects the material duties
to be performed under this Agreement (except in the case of disability), engages
in any conduct in connection with his employment with the Company which is
deliberately dishonest, materially damages the reputation or standing of the
Company, or is convicted of any deliberate criminal act involving moral
turpitude (each individually, “Cause”), then Company may terminate this
Agreement; provided, however, that the Company shall (i) give Executive
written notice of the ground for Cause and a detailed description of the facts
underlying such ground, and (ii) (b) where the ground for Cause is curable, ten
(10) days in which to cure the purported ground for Cause, or (c) where the
ground for Cause is not curable, one (1) day’s written notice. In event of
termination of the Agreement pursuant to this subsection, Executive shall be
paid only at the then applicable base salary rate up to and including the date
of termination. Executive shall not be paid any Annual Bonus or other
compensation, prorated or otherwise. In event of termination of the Agreement
pursuant to this subsection, Executive will forfeit any rights to receive
restricted shares or incentive bonus under this Agreement not granted as of the
date of termination.
D. In
the event that the Company terminates Executive without Cause, or the Executive
resigns his employment for Good Reason, Executive shall be entitled to the
following: (i) the Company shall pay the Executive his then applicable
annual base salary up to and including the date of termination; (ii) as soon as
practicable after the date of termination, the Company shall pay Executive a
lump sum cash payment equivalent to the sum that Executive would have been paid
as the then applicable annual salary from the date of termination through the
end of the then-current Term had Executive’s employment not been terminated;
(iii) as soon as practicable after the date of termination, the Company shall
pay Executive a lump sum cash payment equivalent to any awarded but unpaid
annual incentive bonus for the then previous year, (iv) as soon as practicable
after the date of termination, the Company shall, in lieu of an Annual Bonus for
the then current fiscal year, pay executive a lump sum cash payment equivalent
to a pro rata amount of the greater of (a) the total Annual Bonus awarded to
Executive in respect of the then previous year, and (b) the total amount of
Executive’s then current annual salary; (v) as soon as practicable after the
date of termination, to the extent not already granted, a grant of all
restricted shares and warrants provided for in this Agreement; and (vi) all
restricted shares held by Executive, and all shares obtained by Executive via
exercise of warrants, shall immediately be eligible, without any further
condition or qualification, to be registered. For the purposes of
this Agreement, “Good Reason” shall mean: (a) without his consent, Executive no
longer reports solely to the Board of Directors, (b) without his consent,
there has been a material adverse diminution in Executive’s powers or duties,
(c) without his consent, Executive no longer holds the position of Chief
Executive Officer, (d) without his consent, Executive no longer holds a
seat on the Company’s Board of Directors, (e) the Company materially breaches
this Agreement, (f) the Company fails to pay or make any payment, award, or
grant provided for in this Agreement, (g) the Company gives notice of its
intention not to renew this Agreement for another Term, or (h) without his
consent, the Company relocates Executive’s place of work away from the Company’s
principal place of business in New Jersey; provided, however, that Executive
shall give the Company written notice of the ground for Good Reason and a
detailed description of the facts underlying such ground, and (where the ground
for Good Reason is curable) ten (10) days in which to cure the purported ground
for Good Reason. Notwithstanding any current or future provision to
the contrary, for the purposes of all other agreements, plans, awards, or grants
to which Executive and the Company are parties that do not provide for the
concept of “resignation for Good Reason,” a resignation by Executive for Good
Reason (as defined herein) shall be deemed a termination by the Company without
Cause.
E. In
the event Executive’s employment is terminated due to Executive’s death or
disability, Executive shall be entitled to the following: (i) the Company shall
pay the Executive his then applicable annual base salary up to and including the
date of termination; (ii) as soon as practicable after the date of termination,
the Company shall pay Executive a lump sum cash payment equivalent to any
awarded but unpaid annual incentive bonus for the then previous year, (iii) as
soon as practicable after the date of termination, the Company shall, in lieu of
an Annual Bonus for the then current fiscal year, pay executive a lump sum cash
payment equivalent to a pro rata amount of the greater of (a) the total Annual
Bonus awarded to Executive in respect of the then previous year, and (b) the
total amount of Executive’s then current annual salary; (v) as soon as
practicable after the date of termination, the Company shall grant Executive the
greater of (a) a pro rata grant of the total restricted shares and warrants
provided for in this Agreement that have not then been granted, and (b) the full
amount of the restricted share and warrant grants next scheduled to be granted
at that time; and (vi) all restricted shares held by Executive, and all shares
obtained by Executive via exercise of warrants, shall immediately be eligible,
without any further condition or qualification, to be registered. For
the purposes of this subsection, “disability” shall mean that for 180
consecutive says in any calendar year Executive is not able, due to physical or
mental infirmity or ailment, the principal duties of his job.
F.
In the event Company is acquired, or is the non-surviving party in a merger, or
sells all or substantially all of its assets, (i) this Agreement shall not be
terminated and Company agrees to use its best efforts to ensure that the
transferee or surviving company is bound by the provisions of this Agreement,
(ii) all restricted share and warrant awards provided for by this Agreement or
otherwise awarded to Executive not yet granted shall be granted immediately
without any further condition or qualification, and (iii) all restricted shares
held by Executive, and all shares obtained by Executive via exercise of
warrants, shall immediately be eligible, without any further condition or
qualification, to be registered.
7.
Indemnification/Advancement. To
the greatest extent permitted by Delaware General Corporation Law § 145,
and subject to the provisions thereof, if Executive is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative by reason
of the fact that Executive is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, Executive shall be entitled to
indemnification against, and advancement of, expenses (including attorneys’ fees
as and when incurred), judgments, fines and amounts paid in settlement actually
and reasonably incurred by Executive in connection with such action, suit or
proceeding. The indemnification and advancement provided by, or
granted pursuant to, this Section shall not be deemed exclusive of any other
rights to which Executive may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in
Executive’s person’s official capacity and as to action in another capacity
while holding such office. In addition to the rights set forth in
this Section, Executive shall be entitled to indemnification and/or advancement
rights no less favorable than such rights granted to other senior executives of
the Company. This Section shall survive termination of Executive’s
employment for any reason.
8. Notices.
Any
notice required by this Agreement or given in connection with it, shall be in
writing and shall be given to the appropriate party by personal delivery or by
certified mail, postage prepaid, or recognized overnight delivery
services;
If to
Company:
Chris
Mulvihill
President
Boomerang
Systems, Inc.
355
Madison Avenue
Morristown,
NJ 07960
If to
Executive:
Mark
Patterson
40
Minnisink Road
Short
Hills, NJ 07078-1920
– with a
copy to –
Friedman
Kaplan
Seiler
& Adelman LLP
1633
Broadway
New York,
NY 10019
Attention: Lance
J. Gotko
(212)
373-7915 Fax
lgotko@fklaw.com
9.
Final
Agreement.
This
Agreement terminates and supersedes all prior understandings or agreements on
the subject matter hereof. This Agreement may be modified only by a
further writing that is duly executed by both parties.
10.
Governing
Law.
This
Agreement shall be construed and enforced in accordance with the laws of the
State of New Jersey without regard to its conflict of laws principles; provided,
however, that Executive’s rights concerning advancement and/or indemnification
shall be governed by the laws of the State of Delaware without regard to its
conflicts of laws principles.
11.
Headings.
Headings
used in this Agreement are provided for convenience only and shall not be used
to construe meaning or intent.
12.
No
Assignment.
Neither
this Agreement nor any or interest in this Agreement may be assigned by
Executive without the prior express written approval of Company, which may be
withheld by Company at Company’s absolute discretion.
13.
Severability.
If any
term of this Agreement is held by a court of competent jurisdiction to be
invalid or unenforceable, then this Agreement, including all of the remaining
terms, will remain in full force and effect as if such invalid or unenforceable
term had never been included.
14.
Arbitration.
The
parties agree that they will use their best efforts to amicably resolve any
dispute arising out of or relating to this Agreement. Any controversy,
claim or dispute that cannot be so resolved shall be settled by final binding
arbitration in accordance with the rules of the American Arbitration
Association and judgment upon the award rendered by the arbitrator or
arbitrators may be entered in any court having jurisdiction thereof. Any
such arbitration shall be conducted in New York, New York, or such other place
as may be mutually agreed upon by the parties.
Within
fifteen (15) days after the commencement of the arbitration, each party shall
select one person to act arbitrator, and the two arbitrators so selected shall
select a third arbitrator within ten (10) days of their appointment.
Each party shall bear its own costs and expenses and an equal share of the
arbitrator’s expenses and administrative fees of arbitration.
Notwithstanding
the provisions of this Section, any disputes or rights between Executive and
Company concerning or arising from advancement and/or indemnification may, at
the option of Executive, be litigated in the courts of the State of Delaware,
for which purpose Company and Executive consent to the jurisdiction and forum of
such courts.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
|
/s/ Mark
Patterson
|
/s/
Chris
Mulvihill
|
|
Mark
Patterson
|
Chris
Mulvihill
|
|
Executive
|
President
|
|
Boomerang
Systems, Inc
|