SERVICES AGREEMENT
Exhibit
99.5
This
Services Agreement (“Agreement”) is entered into by
and between Park City Group, Inc., a Nevada corporation (the “Company”) and Fields
Management, Inc., a Utah Corporation (“Fields”), this 9th day of
April, 2009.
Recitals:
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A.
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Fields
is a corporation in the business of providing executive management
services, including performing the functions of President and Chief
Executive Officer for the Company.
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B.
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This
Agreement is made to protect the Company’s legitimate and legally
protectible property and business
interests.
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C.
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This
Agreement is entered into in order to define the terms and conditions of
Fields’ relationship with the
Company.
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D.
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This
Agreement amends and replaces that certain Services Agreement between the
parties hereto dated July 1, 2005
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Agreements:
Now,
Therefore, in consideration of the mutual covenants and promises
contained in, and the mutual benefits to be derived from this Agreement, and for
other good and valuable consideration, the Company and Fields agree as
follows:
1. Independent
Contractor.
The
Company hereby retains Fields, and Fields hereby accepts such retainer, on the
terms and conditions of this Agreement. It is understood and agreed
that Fields and its employees or other individuals it uses to perform the
services set forth herein for the Company, are independent contractors and not
employees of the Company.
2. Term of the
Services.
This
Agreement shall be effective as of July 1, 2008 (the “Effective Date”) and
continue pursuant to the terms hereof until the 30th day of
June 2013 (the “Initial
Term”), unless sooner terminated pursuant to the terms hereof or extended
at the sole discretion of the Company’s Board of Directors. The Initial Term and
any subsequent terms will automatically renew for additional one year periods
unless, six months prior to the expiration of the then current term, either
party gives notice to the other that the Agreement will not renew for an
additional term. In the event of such written notice being timely provided by
the Company, Fields shall not be required to perform any responsibilities or
duties to the Company during the final two months of the then-existing term. In
such event, the Company will remain obligated to Fields for all compensation and
other benefits set forth herein and in any written modifications
hereto.
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3. Duties.
(a) General Duties.
Fields shall provide to the Company an individual (the “Executive”) to fill the
role and perform the functions of President and Chief Executive Officer of the
Company, and shall have such duties, responsibilities and obligations as are
established by the Bylaws of the Company or are generally required of persons
employed in similar positions. This shall include full executive powers of these
positions over all operating and financial officers, the authority to hire and
fire officers and employees, and to authorize expenditures of money for
corporate purposes, subject to the right of the Board of Directors to impose
reasonable restrictions and requirements.
(b) Performance. To the
best of his ability and experience, the Executive will at all times loyally and
conscientiously perform all duties, and discharge all responsibilities and
obligations, required of and from him pursuant to the express and implicit terms
hereof, and to the reasonable satisfaction of the Company. The Executive shall
devote as much of his time, energy, skill and attention as is
required to the business of the Company, and the Company shall be entitled to
all of the benefits and profits arising from or incident to all such work,
services, and advice of Executive rendered to the Company.
(c) Outside Activities.
Nothing in this Agreement shall prohibit Executive from directing his personal
investments or accepting speaking or presentation engagements in exchange for
honoraria, or from rendering services to, or serving on boards of, charitable
organizations, so long as such activities do not interfere or conflict with the
performance of Fields’ duties hereunder.
(d) Additional
Services. Fields may be asked from time to time by the Company
to provide other services which Fields can provide using other of its employees
in addition to the Executive. Compensation to Fields for such
additional services shall be agreed upon at the time of the
request.
4. Compensation and
Benefits.
(a) Fee. The Company
shall pay to Fields an annual base fee of $325,000 (“Annual Base Fee”). The Annual
Base Fee, which shall be pro-rated for any partial period, will be payable in
equal semi-monthly installments.
(b) Indemnification; D&O
Insurance. The Company shall indemnify Fields to the fullest extent of
that which is available under Chapter 78 of the Nevada Revised Statutes, and
shall provide director’s and officer’s insurance with such coverages, in such
amounts and from such insurers as constitutes good practices by comparable
companies in the same business as the Company. Such insurance shall provide
defense and coverage obligations for any claim arising out of Fields’ or
Executive’s acts or omissions committed during the Initial Term or any
subsequent term hereof, regardless of when such claims are
asserted.
(c) Incentive Bonus. An
incentive bonus, based upon the Company’s achievement of performance goals shall
be paid to Fields. The goals will be pre-determined each year by the
Compensation Committee of the Board of Directors in discussion with the
Executive.
(d) Travel and Business Expense
Reimbursement. The Company shall promptly reimburse Fields for all of
Executives reasonable travel and business expenses. Expenses not
reimbursed within 30 days of the date of submittal to the Company shall bear
interest at the rate of twelve percent (12%) per annum.
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(e) Company Vehicle. The
Company shall reimburse Fields for the costs of a vehicle of Executives choice.
The reimbursement shall not exceed $1,200.00 per month plus applicable deposits
if purchased on a monthly installment contract or leased pursuant to a operating
lease. The Company shall also pay reasonable operating costs of such vehicle to
include insurance, registration and taxes, maintenance, fuel and other related
costs.
(f) Computer Equipment.
The Company shall provide to Fields an annual allowance of up to $6000 to be
used to acquire miscellaneous computer equipment.
(g) Life Insurance. The
Company shall maintain and pay the premiums for two term life insurance policies
in the name of the Executive for at least $10,000,000 each, with the beneficiary
of one to be designated by the Executive at his sole discretion and the
beneficiary of the other to be designated by the Company. Coverage of
the two policies shall continue during the term of this Agreement
(h) Stock
Grant. The Company hereby grants to Fields 600,000 shares of
its restricted common stock priced on January 23, 2009 (the ”Stock Grant”) to be
issued according to a pro-rata ten year vesting schedule, the first issuance of
which shall be one year from the Effective Date.
(i) Retirement Annuity.
As soon as is reasonably practical following the retirement of the debt incurred
by the Company in connection with the acquisition of Precient Applied
Intelligence, Inc., the Company will investigate the possibility and
reasonableness of providing to Fields a retirement annuity in the
amount of $1,500,000.
5. Proprietary
Information.
(a) Obligation. Neither
Fields nor the Executive shall not disclose, publish, disseminate, reproduce,
summarize, distribute, make available or use any Proprietary Information, except
in pursuance of Fields’ duties, responsibilities and obligations under this
Agreement and for the benefit of the Company.
(b) Definition. As used
in this Agreement, “Proprietary Information”
means information that is (i) designated as “confidential,” “proprietary” or
both by the Company or should have been known to be “confidential” or
“proprietary” to the Company from the nature of the information or the
circumstances of its disclosure, and (ii) has economic value or affords
commercial advantage to the Company because it is not generally known or readily
ascertainable by proper means by other persons. By way of illustration,
Proprietary Information includes but is not limited to information relating to
the Company’s products, services, business operations, business plans and
financial affairs, and customers; any application, utility, algorithm, formula,
pattern, compilation, program, device, method, technique, process, idea,
concept, know-how, flow chart, drawing, standard, specification, or invention;
and any tangible embodiment of Proprietary Information that may be provided to
or generated by Fields or the Executive.
(c) Return upon
Termination. Upon the termination of this Agreement for any reason, and
at any time prior thereto upon request by the Company, Fields shall return to
the Company all tangible embodiments of any Proprietary Information in its or
the Executive’s possession, including but not limited to, originals, copies,
reproductions, notes, memoranda, abstracts, and summaries.
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(d) Ownership. Any
Proprietary Information developed or conceived by the Executive during the term
of this Agreement shall be and remain the sole property of the Company. Fields
agrees promptly to communicate and disclose all such Proprietary Information to
the Company and to execute and deliver to the Company any instruments deemed
necessary by the Company to perfect the Company’s rights in such Proprietary
Information.
6. Termination of
Services.
(a) Additional
Definitions. For purposes of this Agreement, the following terms shall
have the meanings assigned below:
(i) “Cause”
means (A) conviction of a crime involving moral turpitude, or (B) a
determination by the Board of Directors of the Company in good faith that Fields
[1] has failed to substantially perform the duties as set forth herein, [2] has
engaged in grossly negligent, dishonest or unethical activity, or [3] has
breached a fiduciary duty or a covenant hereunder, including without limitation
the unauthorized disclosure of Company trade secrets or confidential
information, resulting in material loss or damage to the Company.
(ii) “Change
in Control of the Company” means a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), if the Company
were subject to such reporting requirements; provided that, without limitation,
such a change in control shall be deemed to have occurred if any “person” (as
such term is used in paragraph 13(d) and 14(d) of the Exchange Act) who on the
date hereof is not a director or officer of the Company, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company’s then outstanding securities.
(iii) “Determination
Date” means (A) if this Agreement is terminated by Fields or by reason of a
Change in Control of the Company, the date specified in the Notice of
Termination, (B) if this Agreement is terminated for Cause by reason of
conviction of a crime involving moral turpitude, the date on which a Notice of
Termination is given, or (C) if this Agreement is terminated for Cause for a
reason other than specified in (B), thirty (30) days after Notice of Termination
is given, provided that Fields shall not have cured the reason for such Cause
during such thirty (30) day period.
(iv) “Good
Reason” means a failure by the Company to comply with any material provision of
this Agreement which has not been cured within ten (10) days after notice of
such noncompliance has been given by Fields to the Company.
(v) “Notice
of Termination” means a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination under the
provision so indicated. Any termination of this Agreement by the Company or by
Fields (other than termination pursuant to subsection 6(b) hereof) shall be
communicated by written Notice of Termination to the other party
hereto.
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(b) Termination By The Company
For Cause. This Agreement may be terminated without breach of this
Agreement for Cause, upon written Notice of Termination from the Company to
Fields and Fields’ failure to cure such Cause as provided in Section
6(a)(iii)(C) hereof. If this Agreement is terminated for Cause, the Company
shall pay Fields its full Annual Base Fee accrued through the Determination
Date, and the Company shall have no further obligation to Fields under this
Agreement for other compensation or benefits accrued but unpaid prior to the
Determination Date.
(c) Termination On Change of
Control of the Company. This Agreement may be terminated without breach
of this Agreement at any time within twelve months following a Change in Control
of the Company at the election of Fields. If the Agreement is terminated
pursuant to this Section 6(c), Fields shall be entitled to receive the
compensation, benefits and reimbursement earned or accrued by Fields under the
terms of this Agreement prior to the Determination Date, including any incentive
bonus. In addition, Fields shall receive as a severance payment the balance of
Fields’ compensation through the end of the then current term of this Agreement
and the Stock Grant shall become fully vested. Also, upon Fields’
termination in connection with this Section 6(c), Fields shall be entitled to an
annual bonus for the remaining period of this contract equal to the bonus due to
Fields for the immediately preceding fiscal year. This Agreement may not be
terminated by the Company following a Change in Control of the Company without
it being a breach of this Agreement.
(d) Termination by
Fields. Fields may terminate this Agreement for Good Reason in the event
of the Company’s material breach of this Agreement, in the event of the death of
the Executive or if the health of the Executive should become impaired to an
extent that makes continued performance of Fields duties hereunder hazardous to
his physical or mental health or his life, provided that Fields shall
have furnished the Company with a written statement from a qualified doctor to
such effect and, provided
further, that, at the Company’s request, the Executive shall submit to an
examination by a doctor selected by the Company and such doctor shall have
concurred in the conclusion of Fields’ doctor.
If
Fields shall terminate this Agreement because of the death or health of the
Executive, Fields shall be entitled to receive the compensation, benefits and
reimbursement earned or accrued by Fields under the terms of this Agreement
prior to the Determination Date, including any incentive bonus, and the Stock
Grant shall become fully vested;
If Fields
shall terminate this Agreement because of the Company’s material breach of this
Agreement, Fields shall be entitled to receive all payments,
including severance, Stock Grants and bonuses, as defined in Section 6 (c) shall
be due and payable to Fields.
7. Miscellaneous.
(a) Severability. If any
provision of this Agreement is found to be unenforceable by a court of competent
jurisdiction, the remaining provisions shall nevertheless remain in full force
and effect.
(b) 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 facsimile or telegram to the party
to the address the party may designate from time to time. A notice delivered
personally shall be effective upon receipt. A notice sent by facsimile or
telegram shall be effective 24 hours after the dispatch thereof. A notice
delivered by mail or by private courier shall be effective on the 3rd day after
the day of mailing.
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(c) Attorney’s Fees. In
the event of any action at law or equity to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorneys’
fees and court costs in addition to any other relief to which such party may be
entitled.
(d) Governing Law. This
Agreement shall be interpreted, construed, governed and enforced according to
the laws of the State of Utah. If any provision of this Agreement is determined
by a court of law to be illegal or unenforceable, then such provision will be
enforced to the maximum extent possible and the other provisions will remain in
full force and effect.
(e) Successors and
Assigns. The rights and obligations of the Company under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of the Company.
(f) Entire Agreement.
This Agreement constitutes the entire agreement between the parties with respect
to the services described herein. This Agreement can be amended or modified only
in a writing signed by Fields and an authorized representative of the
Company.
(g) Signature by Facsimile and
Counterpart. This Agreement may be executed in counterpart, and facsimile
signatures are acceptable and binding on the parties hereto.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed and signed as of
the day and year first above written.
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“Company”
Park
City Group, Inc., a Nevada corporation
By: /s/ Xxxxxx X.
Xxxxx
Name:
Xxxxxx X. Xxxxx
Title: Director
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“Fields”
FIELDS MANAGEMENT, INC.,
a Utah corporation
By: /s/
Xxxxxxx X. Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: President
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