EXECUTIVE EMPLOYMENT AGREEMENT
RECITALS
WHEREAS, in accepting engagement by the Company, the Executive has not relied and will not rely on any statements or representations, whether oral or in writing, by any officers, employees, or agents of the Company, except as expressly provided in this Agreement.
AGREEMENT
1.At Will. The Executive’s employment as the Chief Financial Officer shall be effective as of the Effective Date and shall continue until terminated pursuant to Section 0 of this Agreement. The period during which the Executive is employed by the Company hereunder is hereinafter referred to as the “Employment Term”.
purchase or own less than five percent (5%) of the publicly traded securities of any corporation; provided, that such ownership represents a passive investment and that the Executive is not a controlling person of, or a member of a group that controls, such corporation; provided further, that the activities described in clauses (a) and (b) do not interfere with the performance of the Executive’s duties and responsibilities to the Company as provided hereunder, including, but not limited to, the obligations set forth in Section 0 hereof.
2.3Member of the Board. In addition to serving as the Chief Financial Officer, on the Effective Date, the Board will appoint the Executive to serve as a member of the Board. The Executive will continue to serve as a member of the Board until the end of the Employment Term or his earlier resignation, removal or failure to be reelected by the stockholders of the Company. In connection with his appointment to the Board, the Company and the Executive will enter into an indemnification agreement in the form attached hereto as Exhibit A.
4.2Equity Awards. In consideration of the Executive entering into this Agreement and as an inducement to join the Company, on the Grant Date the Company will grant to the Executive, pursuant to the Bakhu Holdings, Corp. 2020 Long-Term Incentive Plan (the “Plan”), a non-qualified stock option to purchase Three Hundred Thousand (300,000) shares of the Company’s common stock (the “Options”), with an exercise price equal to the Fair Market Value of a share of the Company’s common stock (as defined in the Plan) on the Grant Date. Sixty Thousand (60,000) of the shares subject to the Options will be immediately vested and exercisable on the Grant Date. The remaining Options shall vest on the basis of time according to the following schedule unless otherwise provided in this Agreement, the Plan or the Award Agreement (as defined below): Twenty Thousand (20,000) of the shares subject to the Options shall vest on the last day of each calendar month, commencing with the calendar month of the Grant Date, for a period of twelve (12) months thereafter such that 100% of the Options shall be vested at the end of the calendar month immediately following the one year anniversary of the Grant Date. All other terms and conditions of the Options including, without limitation, the treatment of vested and unvested Options following a termination of employment or removal as a member of the
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Board shall be governed by the terms and conditions of the Plan and the stock option award agreement attached hereto as Exhibit B (the “Award Agreement”). In connection with Executive’s position as a member of the Board, Executive will be eligible to receive annual stock option grants as determined by the Board.
4.7Section 280G.
(a)If any of the payments or benefits received or to be received by the Executive (including, without limitation, any payment or benefits received in connection with a change in control of the Company or the Executive’s termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement, or agreement, or otherwise) (all such payments collectively referred to herein as the “280G Payments”) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and would, but for this Section 5.3, be subject to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), then such 280G Payments shall be reduced in a manner determined by the Company (by the minimum possible amounts) that is consistent with the requirements of Section 409A until no amount payable to the Executive will be subject to the Excise Tax. If two economically equivalent amounts are subject to reduction but are payable at different times, the amounts shall be reduced (but not below zero) on a pro rata basis.
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(b)All calculations and determinations under this Section 4.7 shall be made by an independent accounting firm or independent tax counsel appointed by the Company (the ”Tax Counsel”) whose determinations shall be conclusive and binding on the Company and the Executive for all purposes. For purposes of making the calculations and determinations required by this Section 4.7, the Tax Counsel may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Company and the Executive shall furnish the Tax Counsel with such information and documents as the Tax Counsel may reasonably request in order to make its determinations under this Section 4.7. The Company shall bear all costs the Tax Counsel may reasonably incur in connection with its services.
5.1The Employment Term and the Executive’s employment as the Chief Financial Officer hereunder may be terminated by the Company at any time, or for any reason, by delivering written notice to the Executive. The Executive may terminate his employment hereunder by delivering at least thirty (30) days advance written notice to the Company. During any such notice period, the Company reserves the right to suspend any or all of the Executive’s duties or responsibilities and limit the Executive’s communications with any customers, suppliers, agents, or employee of the Company, as the Company determines in its sole discretion.
(a)Subject to the terms and conditions of this Agreement, in the event that the Executive’s employment hereunder is terminated for any reason, the Employment Term shall expire and the Executive shall be entitled to the following:
(i)Base Salary earned, but unpaid through the date of termination of employment;
(ii)reimbursement for unreimbursed business expenses properly incurred by the Executive, which shall be subject to and paid in accordance with the Company’s expense reimbursement policy; and
(iii)such equity compensation, if any, to which the Executive may be entitled under the Plan and the Award Agreement as of the date of termination of employment.
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Company shall make reasonable efforts to minimize disruption of the Executive’s other activities. The Company shall reimburse the Executive for reasonable expenses incurred in connection with such cooperation and, to the extent that the Executive is required to spend substantial time on such matters, the Company shall compensate the Executive at an hourly rate based on the Executive’s Base Salary on the Termination Date.
(c)assisting a person or entity in any manner in doing, or attempting to do, any of the things prohibited by Sections 0 and 0 above.
8.2Non-Solicitation of Customers. The Executive understands and acknowledges that because of the Executive’s experience with and relationship to the Company, the Executive will have access to and learn about much or all of the Company’s customer information. “Customer Information” includes, but is not limited to, names, phone numbers, addresses, email addresses, order history, order preferences, chain of command, decisionmakers, pricing information, and other information identifying facts and circumstances specific to the customer and relevant to sales and services. The Executive understands and acknowledges that loss of this customer relationship and/or goodwill will
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This Section 0 does not, in any way, restrict or impede the Executive from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. The Executive shall promptly provide written notice of any such order to the Board.
The Executive further acknowledges that the benefits provided to the Executive under this Agreement, including the amount of the Executive’s compensation, reflects, in part, the Executive’s obligations and the Company’s rights under Section 0, Section 0, and Section 0 of this Agreement; that the Executive has no expectation of any additional compensation, royalties, or other payment of any kind not otherwise referenced herein in connection herewith; and that the Executive will not suffer undue hardship by reason of full compliance with the terms and conditions of Section 0, Section 0, and Section 0 of this Agreement or the Company’s enforcement thereof.
11.Remedies. In the event of a breach or threatened breach by the Executive of Section 0, Section 0, or Section 0 of this Agreement, the Executive hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, and that money damages would not afford an adequate remedy, without the necessity of showing any actual damages, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages, or other available forms of relief.
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15.Governing Law: Jurisdiction and Venue. At all times subject to Sections 0 and 0 of this Agreement, and the Mutual Agreement to Arbitrate, this Agreement, for all purposes, shall be construed in accordance with the laws of the State of California, without regard to conflicts of law principles that would require the application of the laws of another jurisdiction. Any action or proceeding by either of the parties to enforce this Agreement shall be brought only in a state or federal court located in Los Angeles County, California. The parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue.
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Agreement or otherwise shall be treated as separate payments for purposes of Section 409A. “Termination of employment,” “resignation” or words of similar import, as used in this Agreement shall mean with respect to any payments subject to Section 409A, the Executive’s “separation from service” as defined by Section 409A. If any payment subject to Section 409A is contingent on the delivery of a release by the Executive and could occur in either of two calendar years, the payment will occur in the second calendar year. To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” subject to Section 409A, all such expenses or other reimbursements hereunder shall be paid on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive, no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to provided, in any other taxable year, and (iii) the Executive’s right to such reimbursement or in-kind benefits shall not be subject to liquidation or exchange for any other benefit. Nothing in this Agreement shall be construed as a guarantee of any particular tax treatment to the Executive. The Executive shall be solely responsible for the tax consequences with respect to all amounts payable under this Agreement, and in no event shall the Company have any responsibility or liability if this Agreement does not meet any applicable requirements of Section 409A.
Bakhu Holdings, Corp.
One World Trade Center, Suite 130
Long Beach, CA 90831
Attn: Chief Executive Officer
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If to the Executive:
Juan Carlos Garcia La Sienra Garcia
Av Bernardo Quintana 205 Dep 801C
Col. Santa Fe
Mexico City 01210
26.Representations of the Executive. The Executive represents and warrants to the Company that:
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| BAKHU HOLDINGS, CORP. |
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| /s/ Evripides Drakos |
| By: Evripides Drakos |
| Title: Interim CEO |
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| EXECUTIVE |
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| /s/ Juan Carlos Garcia La Sienra Garcia |
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| Juan Carlos Garcia La Sienra Garcia |
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Signature Page to Executive Employment Agreement
EXHIBIT A
INDEMNIFICATION AGREEMENT
EXHIBIT B
AWARD AGREEMENT
EXHIBIT C
CONFIDENTIALITY AND PROPRIETARY RIGHTS AGREEMENT
EXHIBIT D
MUTUAL AGREEMENT TO ARBITRATE CLAIMS