EMPLOYMENT AGREEMENT
Exhibit 10.13
Employment
Agreement (the
“Agreement”), dated as of August __, 2007 between Deer Valley
Corporation, a Florida corporation whose principal place of business is located
at 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000 (the
“Company”) and Xxxxxxx X. Xxxxxxx (the
“Employee”), an individual currently residing at
the address
set forth on the signature page to this Agreement.
BACKGROUND
INFORMATION
The
Company wishes to secure the employment services of Employee for a definite
period of time and upon the particular terms and conditions hereinafter set
forth. Employee is willing to be so employed. Accordingly,
the parties agree as follows:
OPERATIVE
PROVISIONS
1. Employment
and Term. The Company hereby employs Employee and the latter
hereby accepts employment by the Company commencing on the date of this
Agreement (the “Commencement Date”) and ending twelve (12)
months after the Commencement Date (the “Initial Term”), which
employment shall be automatically extended for unlimited successive one (1)
year
terms (each a “Successor Term”) unless (a) it is terminated
during the pendency of the then current term, whether Initial or Successor,
by
the occurrence of one of the events described in Section 4. hereof, or (b)
by
one party furnishing the other with written notice, at least thirty (30) days
prior to the expiration of such term, of an intent not to renew this Agreement
upon the expiration of the then current term (the “Non-Renewal
Notice”).
2. Duties. During
the term of this Agreement, whether Initial Term or a Successor Term, Employee
shall serve as President and Chief Executive Officer, and in such additional
capacities appropriate to his responsibilities and skills as shall be designated
by the Company, through action of its Board of Directors (the
“Board”). During the Initial Term and any Successor
Term, Employee will devote no less than 150 hours per month to the performance
of his duties hereunder. The Company recognizes that, from time to time, the
Employee will have business endeavors outside of his employment hereunder,
provided, Employee will not engage in any other business, profession or
occupation for compensation or otherwise which would conflict with the rendition
of such services hereunder, without the prior written consent of the Board
of
Directors, provided, further, if the Employee shall present
opportunites to the Board from time to time, and the Board elects not to pursue
such opportunities, the Employee may pursue such opportunity during his
free-time, outside of his scope of employment hereunder.
3. Compensation;
Bonus; Benefits.
a. Fixed
Compensation. For the services to be rendered by Employee under
this Agreement, the Company shall pay Employee a fixed compensation of $150,000
per year (inclusive of any amounts subject to federal or state employment
related withholding requirements), payable in arrears in equal bi-weekly
installments or otherwise as the parties may agree (“Fixed
Compensation”). Employee may, from time to time, be eligible
for a merit-based increase in his or her Fixed Compensation, as the Board,
in
its sole discretion, shall determine.
b. Bonus. Each
year, Employee may receive a bonus to be paid at the discretion of the
disinterested members of the Board (“Bonus
Compensation”).
c. Vacation. During the term of
this Agreement, Employee shall be entitled to fully paid vacation per calendar
year, sick days, and holidays, as are generally made available to other senior
executives of the Company. Employee (x)
shall not be entitled to receive monetary or other valuable consideration for
vacation time, sick days, or holidays to which he is entitled but does not
take
(including unused time upon termination or expiration of this Agreement), and
(y) shall not be entitled to apply unused vacation, sick days, or
holidays from one year for use in the following calendar year, i.e., the Company
has a “use it or lose it policy,” unless the Employee was directed in writing by
the Board to forego his vacation, in which case up to one week may be carried
over. The timing of vacation periods shall be within the discretion
of the Company, reasonably exercised so as not to unnecessarily inconvenience
Employee.
d. Sale
of Business. In the event the business is sold (whether by
merger, sale of substantially all of its assets, a sale of more than 51% of
the
outstanding capital stock, or otherwise), Employee may receive an additional
bonus to be determined and paid at the discretion of the members of the
Board.
4. Termination
of Employment.
a. Termination
by the Company for Cause. The Company may terminate Employee’s
employment hereunder for Cause (as defined below) upon furnishing written notice
to Employee, provided that if the basis for the Company so terminating
Employee is described by clauses (i) or (ii) below, Employee shall have
been given prior written notice of any proposed termination for Cause, which
notice shall specify in reasonable detail the circumstances claimed to provide
the basis for such termination, and Employee shall not have corrected such
circumstances, in a manner reasonably satisfactory to the Company, within
thirty (30) days of receipt of such written notice. For purposes
of this Agreement, “Cause” shall mean any of the following events:
i.
Employee’s willful misconduct or gross negligence;
ii. Employee’s
conscious disregard of his obligations hereunder or of any other written duties
reasonably assigned to him by the Board; or
iii. Employee’s
commission of any act involving fraud or a determination that Employee has
demonstrated a dependence upon any addictive substance, including alcohol,
controlled substances, narcotics or barbiturates.
Except
for any earned but unpaid Fixed Compensation through the date of any such
termination under this Section 4.a., the Company shall be under no further
obligation hereunder and Employee shall not be entitled to receive any other
payments or benefits under this Agreement if terminated for Cause.
b. Termination
by Company Without Cause. The Company may terminate Employee’s
employment hereunder for any reason. A termination “without Cause”
shall mean a termination of Employee’s employment by the Company other than due
to death or disability as described in Section 4.c. or for Cause as described
in
Section 4.a.
c. Death
or Disability. Employee’s employment hereunder shall
automatically terminate in the event of Employee’s death or Disability (as such
term is defined in Section 7.a. below).
d. Termination by
Employee. Employee’s employment hereunder, may be terminated by
Employee for any reason following the delivery of a notice of termination to
the
Company. Upon a termination by Employee pursuant to this Section
4.d., Employee shall be entitled to any earned but unpaid Fixed Compensation
through the date of such termination and shall have no further rights to any
compensation (including any Fixed Compensation or Bonus Compensation) or any
other benefits under this Agreement.
e. Payments
upon Termination without Cause; Non-Renewal by Company; or
Death or Disability. If (i) Employee’s employment is terminated
by the Company without Cause, (ii) the Company shall deliver a Non-Renewal
Notice to Employee pursuant to Section 1 above, or (iii) upon death or
Disability (as referenced in 4.c. above), then, in addition to any earned but
unpaid Fixed Compensation through the date of such termination, but subject
to
Employee’s compliance with this Agreement, Employeeshall continue to receive
regular installments of his Fixed Compensation payable on the Company’s regular
payroll dates for a period of twelve (12) months from the date of termination
(the “Severance Period”). Upon expiration of the
Severance Period, the Company shall be under no further obligation hereunder
and
Employee shall not be entitled to receive any other payments or benefits under
this Agreement.
5. Non-Disclosure;
Prohibited Activities.
a. Confidentiality;
Return of Company Property. During Employee’s
employment with the Company (including employment with the Company prior to
the
date of this Agreement), Employee has been and/or will be exposed to and has
received or will receive confidential and proprietary information of the Company
or its Affiliates (as such term is defined in Section 7.a.
below), including but not limited to lists of Customers
(as such term is defined in Section 7.a. below) or proposed Customers,
Inventions, technical information, computer software, know-how, processes,
business and marketing plans, strategies, training and operational procedures,
information concerning the Company’s products, promotions, development,
financing, business policies and practices, formulae, patterns, compilations,
programs, devices, methods, techniques, or processes, and other forms of
information in the nature of trade secrets (collectively, the
“Confidential Information”). Employee agrees that
during the course of his or her employment with the Company and until the date
ending ten (10) years following the termination of his or her employment
(including expiration upon non-renewal), Employee will keep Confidential
Information confidential and, except as necessary during the course of his
or
her employment, will not disclose any Confidential Information to any person
or
entity or, directly or indirectly, use for his or her own account, any
Confidential Information. Upon the termination of employment,
Employee promptly will supply to the Company all property (including all files,
Customer lists, etc.) that has been produced or received by Employee during
his
or her employment with the Company, whether or not related to the Confidential
Information. The obligations of this Section 5.a. will be in addition
to any other agreements that Employee has entered into with the Company
regarding the receipt of Confidential Information.
b. Non-Solicitation;
Non-Disparagement. Employee will not, during the term
of this Agreement (whether the Initial or any Successor Term) and for the two
(2) year period following the termination Employee’s employment (including
expiration of this Agreement upon non-renewal), directly or indirectly: (i)
solicit for employment, or employ any person who, at the time of such
solicitation or employment, is employed by the Company or its Affiliates or
was
employed by the Company or its Affiliates during the twelve month period prior
to the solicitation or employment or induce or attempt to induce any person
to
terminate his employment with the Company or its Affiliates; (ii) do business
with or solicit Customers, except as necessary during the course of his or
her
new employment, or engage in any
activity intended to terminate, disrupt or interfere with the Company’s
relationships with its Customers; and (iii) engage in any conduct or make any
statement disparaging or criticizing the Company or any Affiliate of the
Company, or any products or services offered by the Company or any Affiliate
of
the Company.
c. Non-Competition. During
the term of this Agreement (whether the Initial or any Successor Term) and
for
the two (2) year period following the termination of Employee’s employment for
any reason (including expiration of this Agreement upon non-renewal and
termination while an “at will” employee), Employee will not, and Employee will
cause its Affiliate to not, directly or indirectly, alone or in conjunction
with
any other person or entity, own, manage, operate or control or participate
in
the ownership, management, operation or control of, or become associated, as
an
employee, director, officer, advisor, agent, consultant, principal, partner,
member or independent contractor with or lender to, any person or entity engaged
in or aiding others to engage in the Business (as defined below) located within
any state in which the Company or its Affiliates manufactures or sells
products,provided, however, the Company acknowledges that the
Employee presented a proposal to the Board to purchase Xxx Xxxxxx Company’s
retail dealerships for site-built and modular home homes, and the Board elected
not to pursue such opportunity and authorized Employee to pursue such
opportunity as a potential owner or acquisition consultant, free of restriction
hereunder.
The
term “Business” means the design,
manufacture, distribution, and sales of factory-built housing, including
modular, mobile and other manufactured homes.
d. Divisibility
of Covenant Period. If any covenant contained in this Agreement
is held to be unreasonable, arbitrary or against public policy, such covenant
shall be considered divisible both as to time, Customers, competitive services
and geographical area, such that each month within the specified period shall
be
deemed a separate period of time, each Customer a separate customer, each
competitive service a separate service and each geographical area a separate
geographical area, resulting in an intended requirement that the longest lesser
time and largest lesser customer base, service offering and geographical area
determined not to be unreasonable, arbitrary or against public policy shall
remain effective and be specifically enforceable against Employee.
e. Enforcement.
Employee acknowledges that (i) the Confidential Information is a valuable asset
of the Company and use of such Confidential Information would allow Employee
to
unfairly compete against the Company, (ii) the restrictions contained in this
Agreement are reasonable in scope and are necessary to protect the Company’s
legitimate interests in protecting its business, and (iii) any violation of
the
restrictions contained in this Agreement will cause significant and irreparable
harm to the Company for which the Company has no adequate remedy at
law. The parties agree that damages at law, including, but not
limited to monetary damages, will or may be an insufficient remedy to the
Company and that (in addition to any remedies that are available to Company,
all
of which shall be deemed to be cumulative and retained by Company and not waived
by the enforcement of any remedy available hereunder) the Company shall also
be
entitled to obtain injunctive relief, including but not limited to a temporary
restraining order, a temporary or preliminary injunction or a permanent
injunction, to enforce the provisions of this Agreement, as well as an equitable
accounting of and constructive trust for all profits or other benefits arising
out of or related to any such violation, all of which shall constitute rights
and remedies to which the Company may be entitled.
f. Intent
of Parties; Survival. The covenants of Employee contained
in this Section 5 and in Section 6 below shall be construed as agreements
independent of any other provision of Employee’s
employment (including employment under this Agreement) and the existence of
any
claim of Employee against the Company shall not constitute a defense to the
enforcement by the Company of any covenant contained in this
section. The covenants contained in this Section 5 and in Section 6
below shall survive termination, expiration, non-renewal or cancellation of
this
Agreement.
6. Inventions.
a. “Inventions”
includes any and all new or useful art, discovery, improvement, technical
development, or invention, whether or not patentable, and all related know-how,
designs, mask works, trademarks, formulae, processes, manufacturing techniques,
trade secrets, ideas, artworks, software or other copyrightable or patentable
work which are made, conceived or reduced to practice by Employee or under
Employee’s direction or jointly with others during and in connection with
Employee’s relationship with the Company, whether or not during normal working
hours or on Employee’s premises.
b. Employee
agrees to promptly disclose every Invention to Company. Employee
hereby assigns and agrees to assign to Company or its designee its entire right,
title and interest worldwide in all such Inventions and any associated
intellectual property rights.
c. Employee
agrees to assist Company in any reasonable manner to obtain and enforce for
Company's benefit patents, copyrights, maskworks, and other property rights
in
any and all countries, and Employee agrees to execute, when requested, patent,
copyright or similar applications and assignments to Company and any other
lawful documents deemed necessary by Company to carry out the purpose of this
Agreement. If called upon to render assistance under this paragraph,
Employee will be entitled to a fair and reasonable fee in addition to
reimbursement of authorized expenses incurred at the prior written request
of
Company. In the event that Company is unable for any reason to secure
Employee’s signature to any document required to apply for or execute any
patent, copyright or other applications with respect to any Inventions
(including improvements, renewals, extensions, continuations, divisions or
continuations in part thereof), Employee hereby irrevocably designates and
appoints Company and its duly authorized officers and agents as its agents
and
attorneys-in-fact to act for and in its behalf and instead of Employee, to
execute and file any such application and to do all other lawfully permitted
acts to further the prosecution and issuance of patents, copyrights, maskworks
or other rights thereon with the same legal force and effect as if executed
by
Employee.
7. Miscellaneous
Provisions.
a. Definitions.
i. Affiliate: The
term “Affiliate” when used in this Agreement shall mean any other person or
entity that directly or indirectly controls, or is under common control with,
or
is controlled by the specified person or entity, and if a natural person rather
than an entity, any member of the immediate family of such
individual. As used in this definition, “control” (including,
with its correlative meanings, “controlled by” and “under common
control with”) shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by
contract, or otherwise) and “immediate family” shall mean any parent,
child, grandchild, spouse, or sibling.
ii. Customers: The
term “Customers” when used in this Agreement shall mean
those persons who, at any time during Employee’s course of employment with the
Company are or were customers, clients, sales agents, or sales representatives
of the Company, predecessors of the Company, or Affiliates of the Company,
as
well as any prospective customers, clients, sales agents, or sales
representatives of the Company or Affiliates of the Company, which were
identifiable and known to Employee during his employment with the
Company.
iii. Disability. The
term “Disability” when used in this Agreement means that an independent
physician selected by the Board or its designee has determined that Employee
has
been substantially unable to render to the Company services of the character
contemplated by Section 2 above, by reason of a physical or mental illness
or
other condition, for more than sixty (60) consecutive days or for shorter
periods aggregating more than 120 days in any period of twelve (12) consecutive
months.
iv. “Trading
Market” means the following markets or exchanges on which the Common Stock
is listed or quoted for trading on the date in question: the American Stock
Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange or the OTC Bulletin
Board.
v. “VWAP”
means, for any date, the price determined by the first of the following clauses
that applies: (a) if the common stock is then listed or quoted on a Trading
Market, the daily volume weighted average price of the common stock for such
date (or the nearest preceding date) on the Trading Market on which the common
stock is then listed or quoted for trading as reported by Bloomberg Financial
L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m.
(New York City time)); (b) if the OTC Bulletin Board is not a Trading Market,
the volume weighted average price of the common stock for such date (or the
nearest preceding date) on the OTC Bulletin Board; (c) if the common stock
is
not then quoted for trading on the OTC Bulletin Board and if prices for the
common stock are then reported in the “Pink Sheets” published by Pink Sheets,
LLC (or a similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the common stock
so
reported; or (d) in all other cases, the fair market value of a share of common
stock as determined by an independent appraiser selected by the Board of
Directors of the Company, the fees and expenses of which shall be paid by the
Company.
b. Notices. All
notices under this Agreement shall be in writing and shall be considered as
properly given or made if hand delivered, sent by certified mail, overnight
delivery service, facsimile or e-mail and addressed to the location set forth
in
the preamble to this Agreement or to such other address as any party may have
designated by like notice furnished to all other parties hereto. All
notices shall be deemed effective when deposited in the U.S. mail, received
by
an overnight carrier or other delivery service or, when sent by facsimile or
e-mail, when confirmation of delivery is obtained by the sender.
c. Assignment. This
Agreement, including, but not limited to the agreements contained in Section
5
regarding non competition, confidentiality, non-disparagement and non
solicitation, shall be assignable by the Company without the prior written
consent of Employee. This Agreement shall inure to the benefit of and
be enforceable by the successors and assigns of the Company, including any
successor or assign to all or substantially all of the business and/or assets
of
the Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock or otherwise. This is a personal service
contract which shall not be assignable by Employee.
d. Application of Florida Law;
Jurisdiction. This Agreement, and the application or
interpretation thereof, shall be governed exclusively by its terms and by the
laws of the State of Florida. Venue for all purposes shall be deemed
to lie within Hillsborough County, Florida. The parties agree that
this Agreement is one for performance in Florida. The parties to this
Agreement agree that they waive any objection, constitutional, statutory or
otherwise, to a Florida court’s exercise of jurisdiction over any dispute
between them and specifically consent to the jurisdiction of the Florida
courts. By entering into this Agreement, the parties, and each of
them understand that they may be called upon to answer a claim asserted in
a
Florida court.
e. Legal
Fees and Costs. If a legal action is initiated by any party to
this Agreement against the other party arising out of or relating to the alleged
performance or non-performance of any right or obligation established hereunder,
any and all fees, costs and expenses reasonably incurred by each successful
party or its legal counsel in investigating, preparing for, prosecuting,
defending against, or providing evidence, producing documents or taking any
other action in respect of, such action shall be the obligation of and shall
be
paid or reimbursed by the unsuccessful party.
f. Waiver
of Jury Trial. The parties hereby acknowledge that any dispute arising out
of this Agreement will necessarily include various complicated legal and factual
issues and therefore knowingly, voluntarily and intentionally waive trial by
jury in any litigation in any court with respect to, in connection with or
arising out of this Agreement, or the validity, interpretation, or enforcement
hereof.
g. Waiver.
The waiver by the Company of a breach of this Agreement shall not be construed
as a waiver of any subsequent breach by Employee. The refusal or failure of
the
Company to enforce the restrictive covenants contained herein or contained
in
any other similar agreement against any other employee, agent, or independent
contractor of the Company, for any reason, shall not constitute a defense to
the
enforcement of this Agreement by the Company against Employee, nor shall it
give
rise to any claim or cause of action by such Employee against the
Company.
h. Acknowledgments: Employee
acknowledges that he has been provided with a copy of this Agreement for review
prior to signing it, that the Company has encouraged Employee to have this
Agreement reviewed by his attorney prior to signing it and that Employee
understands the purposes and effects of this Agreement.
i. Entire
Agreement; Amendment. This Agreement is the entire understanding
of the parties with respect to the subject matter hereof and merges all prior
communications, understandings, and agreements, whether written or
oral. This Agreement shall not be modified except by a subsequently
dated written amendment to this Agreement, signed on behalf of both parties
by
their duly authorized representatives.
j. Severability. If
any provision of this Agreement is held by a court of competent jurisdiction
to
be contrary to law or public policy or otherwise unenforceable, the remaining
provisions shall remain in full force and effect and the invalid provision
shall
remain in force as reformed by the court.
k. Counterparts. This
Agreement may be executed in any number of counterparts, by means of multiple
signature pages each containing less than all required signatures, and by means
of facsimile signatures, each of which shall be deemed an original, but all
of
which together shall constitute one and the same document.
[Signature
Page Follows]
[Signature
Page to Employment Agreement]
DEER
VALLEY
CORPORATION
By:
Name:
Its:
EMPLOYEE
_______________________________________
Xxxxxxx
X.
Xxxxxxx
0000
00xx Xxx
Xxxxx
Xxxxx
Xxxxxxxxxx,
Xxxxxxx 00000
