EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
effective as of February 5, 1999 (the "Effective Date"), by and between Dynatec
International, Inc., a Utah corporation (the "Company"), and Xxxxxxxxx X.
Xxxxxxxxx, an individual (the "Employee"). The Company and the Employee are
sometimes referred to herein, collectively, as the "parties" and, individually,
as a "party."
RECITALS:
A. WHEREAS, the Employee has been an outside director of the Company
for in excess of ten (10) years and, in that capacity, has acquired an in depth
knowledge of the Company and its business, operations, customers, suppliers and
products;
B. WHEREAS, the Employee has substantial knowledge and experience in
business and international commerce and finance, which knowledge and experience
has been and will continue to be valuable to the Company as it grows and expands
its operations;
C. WHEREAS, the Company is in the business of developing,
manufacturing, marketing, and distributing various consumer products, including,
but not limited to, telephone accessories, hardware and houseware products,
flashlights and telecommunications headsets; and
D. WHEREAS, the Company desires to establish its rights to the services
of the Employee in the capacity described below, on the terms and conditions and
subject to the rights of termination hereinafter set forth, and the Employee is
willing to accept such employment on such terms and conditions.
NOW THEREFORE, in consideration of the mutual agreements, promises and
covenants described herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Employee and the
Company have agreed and do hereby agree as follows:
1. Employment. The Company hereby employs the Employee and the Employee hereby
accepts such employment, upon the terms and conditions set forth herein. The
Company understands that the Employee currently resides in The Woodlands, Texas
and intends to retain his residence in The Woodlands, Texas for personal and
family reasons for a presently unascertainable period of time after the
Effective Date but not to exceed six (6) months (the "Transition Period")
without the prior approval of the Company's Board of Directors. The term
"Transition Period" for purposes of this Agreement will be interpreted to
include any extension thereof that may be approved by the Board of Directors.
Notwithstanding the duration of the Transition Period set forth above, the
Employee intends to permanently relocate to the Salt Lake City, Utah area as
soon after the effective date of this Agreement as the Employee's personal and
family circumstances will allow, which determination shall be made by the
Employee in his sole and absolute discretion. The parties further understand and
agree that the Employee intends to travel from Xxx Xxxxxxxxx, Xxxxx xx Xxxx Xxxx
Xxxx, Xxxx each week during the Transition Period and expects to generally spend
several days of each business week working at the Company's headquarters in Salt
Lake City, Utah during the Transition Period, but at all times during the
Transition Period to devote his full time and professional expertise to the
discharge of the Employee's duties and responsibilities hereunder.
1.1 During Transition Period. During the Transition Period, the Company
shall furnish the Employee with (a) an office and secretarial and other
facilities and services at the Company's headquarters in Salt Lake City, Utah,
and (b) reimbursement for all actual expenses incurred in connection with all
reasonably necessary and appropriate office equipment for use by the Employee at
his residence in The Woodlands, Texas during the Transition Period, including,
but not limited to, all necessary computer hardware and software, computer
printer, facsimile machine and supplies, cellular telephone, Internet access,
scanner and all related peripheral equipment as reasonably necessary and
appropriate for the Employee to perform his duties and responsibilities under
this Agreement during the Transition Period and consistent with the Employee's
position as Chief Executive Officer of the Company.
1.2 After Transition Period. After the expiration of the Transition
Period, the Company shall furnish the Employee with an office and secretarial
and other facilities and services at the Company's headquarters in Salt Lake
City, Utah as are reasonably necessary and appropriate for the performance of
the Employee's duties and responsibilities hereunder and consistent with the
Employee's position as Chief Executive Officer of the Company.
2. Duties. The Company does hereby employ and engage the Employee as Chief
Executive Officer of the Company and each of its subsidiaries and divisions, or
such other title as the Company's Board of Directors shall specify from time to
time, and the Employee does hereby accept and agree to such engagement and
employment. The Employee's duties shall be such executive and managerial duties
and responsibilities as the Board of Directors shall specify from time to time
and as provided in the Bylaws of the Company, as the same may be amended from
time to time, and shall entail those duties customarily performed by a Chief
Executive Officer of a company with a sales volume and number of employees
commensurate with those of the Company. The Employee shall diligently and
faithfully execute and perform such duties and responsibilities, subject to the
general supervision and control of the Company's Board of Directors. The
Employee shall be responsible and report only to the Company's Board of
Directors. The Board of Directors, in its sole and absolute discretion, shall
determine the Employee's duties and responsibilities and may assign or reassign
the Employee to such executive and managerial duties, responsibilities or
positions as it deems in the Company's best interest. The Employee shall devote
his full-time attention, energy and skill during normal business hours to the
business and affairs of the Company and shall not, during the Employment Term
(as that term is defined below), be actively engaged in any other business
activity, except with the prior written consent of the Company's Board of
Directors; provided, however, that in any event any such other business activity
will not: (a) adversely affect or materially interfere with the performance of
the Employee's duties and responsibilities hereunder, (b) involve a conflict of
interest with the Company or (c) involve activities competitive with the
business of the Company. Notwithstanding the foregoing, the Employee shall be
permitted to (i) engage in charitable and community affairs, (ii) act as a
director of any corporation or organization outside of the Company, not to
exceed three (3) in number, that is not in competition with the Company, and
(iii) make investments of any character in any business not in competition with
the Company or any of its subsidiaries or divisions and manage such investment
(but not be involved in the day-to-day operations of any such business),
provided, however, no such business shall place the Employee in a conflict of
interest with the Company or interfere with the performance of the Employee's
duties and responsibilities under this Agreement.
3. Compensation and Benefits. As the entire consideration for the services to be
performed by the Employee hereunder and the duties and responsibilities assigned
to and the obligations incurred by the Employee hereunder, and subject to the
terms and conditions hereof, during the Employment Term the Employee shall be
entitled to the following:
3.1 Base Salary. Subject to Section 5 below, during the Employment Term
the Company shall pay the Employee an annual base salary of One Hundred
Ninety-Five Thousand Dollars ($195,000). The Company will pay the Employee said
base salary in equal semi-monthly installments or at more frequent intervals in
accordance with the Company's customary policies and pay schedule. An upward
adjustment to the Employee's base salary shall be considered by the Company's
Board of Directors not less frequently than annually. The Employee and the
Company agree that any expenses that are paid for by the Company or reimbursed
to the Employee pursuant to Sections 3.7 or 3.8 below will be accounted for by
the Company as compensation to the Employee and subject to normal withholding by
the Company on an as-paid basis.
3.2 Additional Benefits. The Employee shall be entitled to participate,
to the extent of his eligibility, in any employee benefit plans made generally
available by the Company to its other senior management personnel during the
Employment Term, including, without limitation, such bonus plans, pension or
profit sharing plans, incentive stock option plans, retirement plans, and
health, life, hospitalization, dental, disability or other insurance plans or
programs as may be in effect from time to time, subject, however, to any
restrictions specified in such plans. Such participation shall be in accordance
with the terms established from time to time by the Company for individual
participation in any such plans or programs.
3.3 Vacation, Sick Leave and Holidays. The Employee shall be entitled
to such amounts of paid vacation and other leave, up to three (3) weeks of paid
vacation per each twelve (12) month period of employment, as from time to time
may be generally allowed to the Company's senior management personnel, with such
vacation to be scheduled and taken in accordance with the Company's standard
vacation policies applicable to such personnel. In addition, the Employee shall
be entitled to such sick leave and holidays at full pay in accordance with the
Company's policies established and in effect from time to time for its senior
management personnel.
3.4 Vehicle. The Employee shall be entitled to the use of one (1)
Company owned or leased vehicle and full reimbursement for all expenses
associated with the operation and maintenance of such vehicle, which vehicle
shall be comparable to the vehicles of the other senior management personnel and
executives of the Company. The Company will reimburse the Employee for such
expenses in accordance with the Company's normal accounting procedures upon the
presentation of vouchers and documentation for such operational and maintenance
expenses.
3.5 Bonus. The Company's Board of Directors may at any time, but shall
have no obligation to do so, pay the Employee such bonuses and/or other
supplemental or special payments and benefits as the Board of Directors
determines in its sole and absolute discretion.
3.6 Stock Options. The Employee shall be granted options to purchase
shares of the Company's Common Stock in an amount and with terms and conditions
to be determined by the Board of Directors. All such options will be granted
pursuant to and governed by any executive stock option plan then in effect (or
such other similar plan as determined by the Board of Directors) and shall be
evidenced by a separate option grant agreement with the Employee.
3.7 Relocation Expenses. Upon the expiration of the Transition Period,
the Company will pay for and on behalf of the Employee, or reimburse the
Employee for, all reasonable costs and expenses associated with the Employee
permanently relocating his permanent residence from The Woodlands, Texas to the
Salt Lake City, Utah area, which costs and expenses shall include, but shall not
be limited to, the services of a moving company to pack and transport the
Employee's household items and personal belongings and transportation of the
Employee and his family members to Salt Lake City, Utah; provided, however, that
such expenses shall not exceed Twenty Thousand Dollars ($20,000) in the
aggregate without the prior approval of the Company's Board of Directors;
provided further, however, that the Company shall have no obligation to pay for
or reimburse the Employee for any of the costs associated with the sale of the
Employee's residence in The Woodlands, Texas.
3.8 Expenses During Transition Period. During the Transition Period,
the Company will provide the Employee with, or reimburse the Employee for the
cost of, an apartment, executive suite or other suitable dwelling in the Salt
Lake City, Utah area and all items of personal property reasonably necessary for
the Employee to reside in the Salt Lake City, Utah area during the Transition
Period. In addition, during the Transition Period the Company will pay for or
reimburse the Employee for all reasonable travel and transportation costs
related to the Employee commuting between Xxx Xxxxxxxxx, Xxxxx xxx Xxxx Xxxx
Xxxx, Xxxx. The parties understand and agree that the Employee generally intends
to travel from Xxx Xxxxxxxxx, Xxxxx xx Xxxx Xxxx Xxxx, Xxxx each week during the
Transition Period. The Company will also pay for or reimburse the Employee for
all ordinary and necessary communication and business expenses, including, but
not limited to, telephone, telecopy and overnight delivery charges, incurred by
the Employee during the Transition Period when his is working from his home
office in The Woodland, Texas.
3.9 No Other Benefits or Compensation. The Employee, as a result of his
employment by the Company as provided by this Agreement, shall only be entitled
to the compensation and benefits provided for in this Agreement, subject to the
terms as set forth herein, and to no other benefits or compensation.
4. Business Expenses. During both the Transition Period and after the expiration
thereof, the Company shall promptly reimburse the Employee for all reasonable
out-of-pocket business expenses incurred in performing the Employee's duties and
responsibilities hereunder in accordance with the Company's policies with
respect thereto in effect from time to time, provided that the Employee promptly
furnishes to the Company adequate records and other documentary evidence
required by all federal and state statutes, rules and regulations issued by the
appropriate taxing authorities for the substantiation of each such business
expense as a deduction on the federal and state income tax returns of the
Company.
5. Term and Termination.
5.1 Employment Term. Subject to earlier termination as provided
hereinbelow (and except for the provisions of this Agreement that, by their
terms, continue in force beyond the termination thereof), the term of this
Agreement shall be for a four (4) year period, commencing on the Effective Date
and ending on February 5, 2003 (the "Employment Term"). Upon mutual written
consent of the parties, this Agreement may be extended or renewed for such
successive term or terms beyond the Employment Term as the parties agree in a
written document executed by both parties. If the Employment Term is so extended
or renewed as provided in this Section 5.1, the term "Employment Term" will be
interpreted herein to include such successive extension or renewal term or
terms.
5.2 Voluntary Termination. The Company shall only be able to
voluntarily terminate this Agreement without cause (as that term is defined
below) prior to the expiration of the Employment Term as provided by Section 5.1
above. The Employee may voluntarily terminate this Agreement and his employment
hereunder at any time during the Employment Term, in which event the conditions
of Section 5.5.1 below shall apply.
5.3 Termination for Cause. This Agreement, and the Employee's
employment hereunder, shall automatically terminate upon the Employee's death
and is otherwise immediately terminable by the Company for cause at anytime
(except as otherwise set forth hereinbelow) upon written notice from the Company
to the Employee. As used in this Agreement, "cause" shall mean the following:
5.3.1 refusal by the Employee to implement or adhere to lawful
policies or directives of the Board of Directors;
5.3.2 habitual neglect of or deliberate or intentional refusal
by the Employee to perform his duties, responsibilities or obligations under
this Agreement;
5.3.3 the Employee's conviction of or entrance of a plea of
nolo contendere to (a) a felony, (b) any crime punishable by incarceration for a
period of one (1) year or longer, or (c) other conduct of a criminal nature that
may have a material adverse impact on the Company's reputation and standing in
the community;
5.3.4 breach of fiduciary duty, breach of the Employee's
common law duty of loyalty, deliberate breach of the Company's rules resulting
in loss or damage to the Company, or unauthorized disclosure of any of the
Company's trade secrets, confidential information or Proprietary Information (as
that term is defined below) by the Employee; and
5.3.5 theft, embezzlement or other criminal misappropriation
of funds by the Employee from the Company;
provided, however, that cause pursuant to Sections 5.3.1 and 5.3.2 above shall
not be deemed to exist unless the Company shall have first given the Employee a
written notice thereof specifying in reasonable detail the facts and
circumstances alleged to constitute "cause," and thirty (30) days after such
notice such conduct has, or such circumstances have, as the case may be, not
entirely ceased or been entirely remedied. The determination of whether the
Employee's actions justify termination for cause and the date such termination
shall be effective shall be made by the Company's Board of Directors, in good
faith, in its sole and absolute discretion. If the Company terminates the
Employee's employment pursuant to this Section 5.3 but it is ultimately
determined that the Company lacked "cause," the provisions of Section 5.5.2
below shall apply.
5.4 Termination for Disability. The Company's Board of Directors may
terminate this Agreement and the Employee's employment hereunder, upon written
notice to the Employee and certification of the Employee's "disability" (as that
term is defined below) by a Qualified Physician (as that term is defined below)
or a panel of Qualified Physicians, as set forth below, if the Employee becomes
disabled for either (a) one hundred-twenty (120) continuous days or (b) one
hundred-eighty (180) days during any continuous twenty-four (24) month period
during the Employment Term. The Company's Board of Directors shall initially
determine that the Employee's disability will prevent the Employee from
substantially performing the Employee's duties, responsibilities or obligations
hereunder. As used in this Agreement, "disability" shall be defined as (i) the
Employee's inability, by reason of physical or mental illness or other cause, to
substantially perform the Employee's duties, responsibilities or obligations
hereunder, or (ii) disability as defined in any disability insurance policy of
the Company in effect at the time in question. The Employee's disability, as
initially determined by the Board of Directors, shall then be certified by a
Qualified Physician or, if requested by the Employee, by a panel of three (3)
Qualified Physicians. If the Employee requests such a panel, the Employee and
the Company shall each select one (1) Qualified Physician who together shall
then select a third Qualified Physician. The determination of the individual
Qualified Physician or a majority of the panel of Qualified Physicians, as the
case may be, shall be binding and conclusive for all purposes. As used in this
Section 5.4, the term "Qualified Physician" shall mean any medical doctor who is
licensed to practice medicine in the State of Utah and who is reasonable
acceptable to the Employee and the Company. The Employee and the Company may, in
any instance, and in lieu of a determination by a Qualified Physician or a panel
of Qualified Physicians, agree between themselves that the Employee is disabled
for purposes of this Section 5.4, in which event the parties understand and
agree that any such determination shall only be applicable for purposes of this
Agreement. The Employee shall receive full compensation, benefits and
reimbursement of expenses pursuant to the terms of this Agreement from the date
disability begins until the date the Employee receives written notice that the
Qualified Physician or the panel of Qualified Physicians, as the case may be,
has certified the Employee's disability or until the Employee begins to receive
disability benefits pursuant to any disability insurance policy of the Company,
whichever occurs first.
5.5 Effect of Termination.
5.5.1 Termination for Cause or Voluntary Termination by the
Employee. In the event this Agreement and the Employee's employment is
terminated for cause hereunder or the Employee voluntarily terminates this
Agreement pursuant to Section 5.2 above, all obligations of the Company and all
duties, responsibilities and obligations of the Employee shall cease except as
provided in Section 5.5.3 below. Upon such termination, the Employee or the
Employee's representative or estate shall be entitled to receive only the
compensation, benefits and reimbursement earned by or accrued to the Employee
under the terms of this Agreement prior to the date of termination, but shall
not be entitled to any further compensation, benefits or reimbursement after
such date.
5.5.2 Voluntary Termination by the Company; Severance
Compensation. In the event the Company voluntarily terminates this Agreement and
the Employee's employment hereunder during the Employment Term other than for
cause (and other than as allowed pursuant to Section 5.2 above), the Employee
will be entitled to the following severance benefits: (a) two (2) years' base
salary (as the Employee's base salary is set forth in Section 3.1 above or as
subsequently increased by the Company), fifty percent (50%) of which shall be
paid in a lump sum on the date of the Employee's termination and the other fifty
percent (50%) of which shall be paid in three (3) equal quarterly installments
commencing on the date that is one-hundred eighty (180) days after the date of
the Employee's termination; and (b) two (2) years of Company-paid health,
hospitalization and dental coverage, which insurance coverage shall be
substantially on the same terms and conditions as was offered to the Employee
during the Employment Term. Other than the items set forth in clauses (a) and
(b) above in this Section 5.5.2, the Employee shall not be entitled to any
further compensation, benefits or reimbursement after the date of his
termination. In the event the Employee voluntarily terminates this Agreement and
his employment hereunder pursuant to Section 5.2 above, the Employee shall not
be entitled to any severance pay and shall not be entitled to any further
compensation, benefits or reimbursement after such termination date. Except for
the severance pay provided in this Section 5.5.2, and except as otherwise
provided herein, all obligations of the Company will cease upon the Company's
voluntary termination of this Agreement and the Employee's employment hereunder.
No severance compensation will be paid to the Employee in the event he is
terminated for cause.
5.5.2.1 This Agreement shall not be terminated by the voluntary or
involuntary dissolution of the Company resulting from either a merger or
consolidation in which the Company is not the consolidated or surviving company,
or a transfer or all or substantially all of the assets of the Company, or the
sale of all or substantially all of the Company's equity capital (a "change of
control"). In the event of any such merger, consolidation, sale or change of
control, the Company's rights hereunder shall be assigned to the surviving or
resulting company, which company shall then honor this Agreement with the
Employee or purchase this Agreement from the Employee for an amount equal to
three (3) years' base salary (as the Employee's base salary is set forth in
Section 3.1 above or as subsequently increased by the Company), which amount
shall be paid to the Employee in one (1) lump sum upon the closing of such
merger, consolidation, sale or change of control.
5.5.3 Survivability.
5.5.3.1 Upon the termination of this Agreement pursuant to Section 5.4 or
Section 5.5.1 above and upon the expiration of the Employment Term, this
Agreement shall thereupon be and become void and of no further force or effect,
except that (a) the covenant not to compete set forth in Section 6 below and (b)
the proprietary information provision contained in Section 7 below shall survive
any such termination or expiration and shall continue to bind the Employee for
the period of time stated therein, and, in addition, the attorneys' fees
provisions, governing law and jurisdiction and venue provisions, and
indemnification provisions set forth in Sections 13, 14 and 16 below,
respectively, shall continue to govern any disputes arising under this
Agreement.
5.5.3.2 Upon the termination of this Agreement
pursuant to Section 5.5.2 above, this
Agreement shall thereupon be and become void and of no further force or effect,
except that (a) the severance pay provisions of Section 5.5.2 above, (b) the
covenant not to compete set forth in Section 6 below and (c) the proprietary
information provision contained in Section 7 below shall survive any such
termination and shall continue to bind the Employee for the period of time
stated therein, and, in addition, the attorneys' fees provisions, governing law
and jurisdiction and venue provisions, and indemnification provisions set forth
in Sections 13, 14 and 16 below, respectively, shall continue to govern any
disputes arising under this Agreement.
5.5.4 Full Calendar Month. To the extent permitted by
applicable law, the calendar month in which the Employee's employment is
terminated shall be counted as a full month in determining all amounts hereunder
and the vesting of any benefits under any of the Company's benefit plans or
programs.
6. Covenant Not to Compete.
6.1 Non-Compete Covenant. The Company and the Employee agree that the
Company's successful operation depends, to a great extent, on the Employee's
special knowledge and expertise in business and international commerce and
finance. Consequently, during the Employment Term and for a period of two (2)
years after the date of termination of the Employee's employment with the
Company (for any reason whatsoever) or the expiration of this Agreement at the
expiration of the Employment Term, the Employee, in further consideration of the
Company's agreement to employ the Employee as provided herein, agrees not (a) to
engage, directly or indirectly, personally or as an employee, agent, consultant,
partner (whether general or limited), member, manager, officer, director,
shareholder or otherwise, in any business activities that are the same as or
similar to those in which the Company engages or proposes to engage (as
indicated by the Company's business plan on the date of the expiration of the
Employment Term) for or on behalf of himself or any other person, firm, company,
corporation or business organization or entity that competes with the Company in
the consumer products industry, (b) to engage in such activities with any other
person, firm, company, partnership, corporation or business organization or
entity engaged in or about to become engaged in such activities for or on behalf
of such other person, firm, company, partnership, corporation or business
organization or entity, or (c) to entice, induce or encourage any of the
Company's other employees or any of its officers, directors or consultants to
engage in any activity that, were it done by the Employee, would violate any
provision of this Section 6.1; provided, however, that notwithstanding the
immediately preceding restrictions set forth in clauses (a), (b) and (c) of this
Section 6.1, the Employee shall be allowed to own up to five percent (5%) of the
issued and outstanding voting stock or interests of any company or mutual fund
that competes directly or indirectly with the Company if such stock or interests
are traded on a national securities market or on the NASDAQ Stock Market. The
restrictions set forth in this Section 6.1 shall only apply in the State of
Utah. The Employee expressly agrees and acknowledges that (i) this covenant not
to compete is reasonable as to time and geographic scope and area and does not
place any unreasonable burden on the Employee, (ii) the general public will not
be harmed as a result of the enforcement of this covenant not to compete, (iii)
the Employee's personal legal counsel has reviewed this covenant not to compete,
and (iv) the Employee understands and hereby agrees to each and every term and
condition of this covenant not to compete.
6.2 Violation of Covenants. The Employee expresses, agrees and
acknowledges that the covenant not to compete contained in this Section 6 is
necessary for the Company's protection because of the nature and scope of the
Company's business and the Employee's position with and the scope of the duties,
responsibilities and obligations delegated to the Employee by the Company. If
any of the covenants or agreements contained in this Section 6 are violated, the
Employee agrees and acknowledges that any such violation or threatened violation
will cause irreparable injury to the Company and that the remedy at law for any
such violation or threatened violation will be inadequate and that the Company
will be entitled to injunctive relief and other equitable remedies without the
necessity of proving actual damages. This non-competition period shall be
extended by any period of time during which the Employee is in breach or
violation of this covenant.
7. Proprietary Information.
7.1 Return of Proprietary Information. Upon the termination of this
Agreement for any reason whatsoever or the expiration of the Employment Term,
the Employee shall immediately turn over to the Company any and all Proprietary
Information (as that term is defined below). The Employee shall have no right to
retain any copies of any material qualifying as Proprietary Information for any
reason whatsoever after the termination of his employment hereunder or the
expiration of the Employment Term, without the express written consent of the
Company.
7.2 Non-Disclosure. It is understood and agreed that, in the course of
his employment hereunder and through his prior activities for and on behalf of
the Company and the contemplated future activities for and on behalf of the
Company pursuant hereto, the Employee will receive, deal with and have access
to, the Company's Proprietary Information and that the Employee holds and will
hold all of the Company's Proprietary Information in trust and confidence for
and on behalf of the Company. The Employee agrees that he will not, during the
Employment Term or thereafter, in any fashion, form or manner, directly or
indirectly, retain, make copies of, divulge, disclose or communicate to any
person, firm company, partnership, corporation or business organization or
entity, in any manner whatsoever, except when necessary or required in the
normal course of the Employee's employment hereunder and for the benefit of the
Company or with the express prior written consent of the Company, any of the
Company's Proprietary Information or any information of any kind, nature or
description whatsoever concerning any matters affecting or relating to the
Company's business or affairs or any of its Proprietary Information.
7.3 Proprietary Information Defined. For purposes of this Agreement,
"Proprietary Information" shall include, but shall not be limited to, the
following: (a) identity of clients, customers, suppliers, retailers,
distributors, distribution channels or investors in, of or to the Company, or
potential clients, customers, suppliers, retailers, distributors, distribution
channels or investors in, of or to the Company; (b) any written, typed or
printed lists or other materials identifying the clients, customers, suppliers,
retailers, distributors or investors in, of or to the Company, or potential
clients, customers, suppliers, retailers, distributors or investors in, of or to
the Company; (c) any financial or other information supplied to the Company by
its clients, customers, suppliers, retailers, distributors or investors; (d) any
and all data or information involving the processes, security codes, flowcharts,
techniques, programs, marketing materials, personnel information, methods,
suppliers or contacts employed by the Company in the conduct of its business;
(e) any lists, documents, manuals, records, forms or other materials used by the
Company in the conduct of its business; (f) any descriptive materials describing
the processes, methods or procedures employed by the Company in the conduct of
its business; (g) any processes for or involving any of the Company's products
or contemplated or proposed products, processes or services or any in-process
patent applications or trade secrets relating to the Company's products,
processes or services; and (h) any other secret or confidential information or
material concerning the Company's business, affairs or products or services,
including, but not limited to, non-public financial information such as budgets
and business plans. The terms "list," "document" or their equivalent, as used in
this Section 7.3, are not limited to a physical writing or compilation, but also
include any and all information whatsoever regarding the subject matter of the
"list" or "document" whether or not such compilation has been reduced to writing
and regardless of the medium in which the same exists (whether electronic,
digital, magnetic, optical or otherwise).
8. Termination of Prior Agreements. This Agreement terminates and supersedes any
and all prior negotiations, correspondence, agreements, proposals and
understandings between the parties hereto with respect to employment or with
respect to the compensation of the Employee by the Company, and all such
negotiations, correspondence, agreements, proposals and understandings shall be
deemed to be merged into this Agreement and, to the extent inconsistent
herewith, such negotiations, correspondence, agreements, proposals and
understandings shall be deemed to be of no force or effect. There are no
representations, warranties or agreements, whether express or implied, oral or
written, with respect to the subject matter hereof, except as set forth herein.
9. Assignment. This Agreement is for the unique personal services of the
Employee and is not assignable or delegable, in whole or in part, by the
Employee without the prior written consent of the Company. This Agreement may be
assigned or delegated, in whole or in part, by the Company and, in such case,
shall be assumed by and become binding upon the person, firm, company,
corporation or business organization or entity to which this Agreement is
assigned.
10. Waiver or Modification. Any waiver, change, modification, extension,
discharge or amendment of any provision of this Agreement shall be effective
only if in writing in a document that specifically refers to this Agreement and
is signed by the party against whom enforcement of such waiver, change,
modification, extension, discharge or amendment is sought. The waiver by either
party of a breach of any provision of this Agreement by the other party shall
not operate or be construed as a waiver of any other provision hereof or any
subsequent breach of the same provision hereof.
11. Severability; Interpretation. In the event that any term or portion,
including any part of a Section or subsection, of this Agreement is invalid or
unenforceable for any reason, the remaining terms or portions of this Agreement,
including the remaining Sections or subsections, if any, shall be severable and
shall remain in full force and effect. The parties to this Agreement agree that
the court making a determination that any term or provision of this Agreement is
unenforceable shall modify the scope, duration, geographic area or application
of the term or provision so that the term or provision is enforceable to the
maximum extent permitted by applicable law. Notwithstanding any rule or maxim of
construction to the contrary, any ambiguity or uncertainty in this Agreement
shall not be construed against either of the parties based upon authorship of
any of the provisions hereof. The above Recitals are deemed to be incorporated
herein by reference.
12. Notices. Any notice required or permitted hereunder to be given by either
party shall be in writing and shall be delivered personally or sent by certified
or registered mail, postage prepaid, or by private courier, or by telex,
telegram or telecopy to the party to the address set forth below or to such
other address as either party may designate from time to time according to the
terms of this Section 12:
To the Employee at: Xxxxxxxxx X. Xxxxxxxxx
00 Xxxx Xxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
With a copy to: Xxxxx X. Xxxxxxx, Esq.
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
1000 Xxxxxx Building
000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Fax: (000) 000-0000
To the Company at: Dynatec International, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxx X. Xxxxx, Chief Financial Officer
Fax: (000) 000-0000
With a copy to: N. Xxxx Xxxxxxxx, Esq.
Durham Xxxxx & Xxxxxxx
00 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Fax: (000) 000-0000
A notice delivered personally shall be effective upon receipt. A notice
sent by telex, telegram or telecopy shall be effective twenty-four (24) hours
after the dispatch thereof. A notice delivered by private courier shall be
effective on the day delivered or if delivered by mail, the third (3rd) business
day after the day of mailing.
13. Attorneys' Fees. In the event of any action at law or in equity to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys' fees, court costs and disbursements in addition to any
other relief to which such party may otherwise be entitled.
14. Governing Law; Jurisdiction and Venue. This Agreement shall be governed by
and construed in accordance with the laws of the State of Utah without giving
effect to any applicable conflicts of law provisions. The parties consent to the
exclusive jurisdiction and venue of the federal and state courts residing in
Salt Lake City, Salt Lake County, Utah for the resolution of any disputes
arising under or out of this Agreement.
15. Business Opportunities. During the Employment Term the Employee agrees to
bring to the attention of the Company's Board of Directors all written business
proposals that come to the Employee's attention and all business or investment
opportunities of whatever nature that are created or devised by the Employee and
that relate to areas in which the Company conducts business and might reasonably
be expected to be of interest to the Company or any of its subsidiaries or
divisions.
16. Employee's Representations and Warranties. The Employee hereby represents
and warrants that he is not under any contractual obligation to any other
company, entity or individual that would prohibit or impede the Employee from
performing his duties and responsibilities under this Agreement and that he is
free to enter into and perform the duties and responsibilities required by this
Agreement. The Employee hereby agrees to indemnify and hold the Company and its
officers, directors, employees, shareholders and agents harmless in connection
with the representations and warranties made by the Employee in this Section 16.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this Employment Agreement
effective as of the Effective Date.
THE COMPANY: THE EMPLOYEE:
DYNATEC INTERNATIONAL, INC.,
a Utah corporation
/s/Xxxxxxxxx X. Xxxxxxxxx, Xx.
Xxxxxxxxx X. Xxxxxxxxx, Xx.
By: /s/Xxxx X. Xxxxx
Xxxx X. Xxxxx
Its: Chief Financial Officer
