EMPLOYMENT AGREEMENT
Exhibit
99.6
This
Employment Agreement (“Agreement”) is entered into by
and between Park City Group, Inc., a Nevada corporation (the “Company”) and Xxxxxxx X.
Xxxxxx (“Employee”),
this 9th day of April, 2009.
Recitals:
A.
Employee is employed by and provides sales and management services to the
Company.
B.
This
Agreement is made to protect the Company’s legitimate and legally protectible
property and business interests.
C. This
Agreement is entered into as a term and condition of Employee’s employment with
the Company.
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 Employee agree as
follows:
1. Employment.
The
Company hereby employs Employee, and Employee hereby accepts such employment, on
the terms and conditions of this Agreement.
2. Term of the
Employment.
The
employment of Employee by the Company will continue pursuant to the terms of
this Agreement effective as of July 1, 2008 and end on 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, Employee 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 Employee for all compensation
and other benefits set forth herein and in any written modifications
hereto.
3. Duties.
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(a)
General Duties.
Employee shall be employed as the Sales Department Manager 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.
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(b) Performance. To the
best of his ability and experience, Employee 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. Employee shall devote
as much of his time, energy, skill and attention 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 Employee rendered to
the Company.
(c) Company Directorship.
Employee shall be elected to the position of director and shall serve on the
Company’s Board of Directors during his term of employment as
Chairman.
(d) Other Directorships and
Businesses. During the term of his Employment, Employee may serve on the
boards of directors or on advisory boards of other companies or engage in other
business relationships, so long as such service does not interfere or conflict
with the performance of Employee’s duties hereunder, and provided further that
Employee will not serve on the boards of directors or on advisory boards of
companies which are direct competitors of the Company.
(e) Outside Activities.
Nothing in this Agreement shall prohibit Employee 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 Employee’s duties hereunder.
4. Compensation and
Benefits.
(a) Salary. The Company
shall pay to Employee an annual base salary of $50,000 (“Annual Base Salary”). The
Annual Base Salary, which shall be pro-rated for any partial employment period,
will be payable in equal bi-weekly installments or at such other intervals as
may be established for the Company’s customary payroll schedule, less all
applicable federal, state and local income and employment tax withholdings
required by law.
(b) Other Benefits. The
Company acknowledges that the Employee conducts a considerable amount of
business activities from Employee’s personal residence. Accordingly, the Company
shall pay the costs of maintaining telephone lines and systems for business use,
along with related costs, at the Employee’s residence. In addition, the Company
shall also provide the Employee with computers and other business equipment
Employee deems necessary for the Employee to conduct necessary business
activities from Employee’s personal residence
The Company also acknowledges that the
Employee’s secretary performs limited personal accounting and other related
services for the Employee. The Company hereby authorizes such activities so long
as they do not interfere with Employee’s secretary’s services to the Company.
Should Employee retain someone else to perform personal accounting and tax
services, the Company shall bear the cost of such services.
(c) Benefit and Stock Option
Plans. Employee shall be entitled to participate, to the extent of
Employee’s eligibility, in any employee benefit and stock option plans made
available by the Company to its employees during the term of this Agreement. In
addition, at no cost to Employee, Company will provide Employee, and his
immediate family members , coverage under a health and dental insurance plan
during the term of Employee’s employment and any applicable COBRA coverage
period.
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(d) Vacations, Holidays,
etc. Employee shall have four (4) weeks paid vacation and twelve (12)
days sick leave during each year he is employed. Vacation days will accrue from
year to year if not taken.
(e) Indemnification; D&O
Insurance. The Company shall indemnify the Employee 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 Employee’s acts or
omissions committed during the Initial Term or any subsequent term hereof,
regardless of when such claims are asserted.
(f) Incentive Bonus. An
incentive bonus, based upon the Company’s achievement of performance goals shall
be paid to Employee. The goals will be pre-determined each year by
the Compensation Committee of the Board of Directors in discussion with
Employee.
(g) Travel and Business Expense
Reimbursement. The Company shall promptly reimburse Employee for all of
his reasonable 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.
5. Proprietary
Information.
(a) Obligation. Employee
shall not disclose, publish, disseminate, reproduce, summarize, distribute, make
available or use any Proprietary Information, except in pursuance of Employee’s
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 Employee.
(c) Return upon
Termination. Upon the termination of this Agreement for any reason, and
at any time prior thereto upon request by the Company, Employee shall return to
the Company all tangible embodiments of any Proprietary Information in
Employee’s possession, including but not limited to, originals, copies,
reproductions, notes, memoranda, abstracts, and summaries.
(d) Ownership. Any
Proprietary Information developed or conceived by Employee during the term of
this Agreement shall be and remain the sole property of the Company. Employee
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.
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6. Termination of
Employment.
(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
Employee [1] has failed to substantially perform his duties in his then current
position, [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 Employee’s employment is terminated by his death, the date of
his death, (B) if Employee’s employment is terminated by reason of Disability,
thirty (30) days after Notice of Termination is given, provided that Employee
shall not have returned to the performance of his duties during such thirty (30)
day period, (C) if Employee’s employment is terminated by reason of a Change in
Control of the Company, the date specified in the Notice of Termination, (D if
Employee’s employment 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 (E) if Employee’s employment is terminated for Cause for a reason other than
specified in (D), thirty (30) days after Notice of Termination is given,
provided that Employee shall not have cured the reason for such Cause during
such thirty (30) day period.
(iv) “Disability”
means (A) Employee’s inability, by reason of physical or mental illness or other
cause, to perform Employee’s duties hereunder on a full-time basis for a period
of twenty-six (26) consecutive weeks, or (B) in the discretion of the Board of
Directors, as such term is defined in any disability insurance policy in effect
at the Company during the time in question.
(v) “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 Employee to the Company.
(vi) “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 Employee’s employment by the Company
or by Employee (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 on Employee’s
Death. Employee’s employment hereunder shall terminate upon Employee’s
death. Upon such termination, Employee’s representative or estate shall be
entitled to receive only the compensation, benefits and reimbursement earned or
accrued by Employee under the terms of his employment prior to the Determination
Date, but shall not be entitled to any further compensation, benefits, or
reimbursement subsequent to such date.
(c) Termination By The Company
for Employee’s Disability. Employee’s employment hereunder may be
terminated without breach of this Agreement upon Employee’s Disability, upon
written Notice of Termination from the Company to Employee and Employee’s
failure to return to the performance of his duties as provided in Section
6(a)(iii)(B) hereof. Employee shall receive full compensation, benefits, and
reimbursement of expenses pursuant to the terms of his employment from the date
Disability begins until the Determination Date specified in the Notice of
Termination given under this section, or until Employee begins to receive
disability benefits pursuant to a Company disability insurance policy, whichever
occurs first.
(d) Termination By The Company
For Cause. Employee’s employment hereunder may be terminated without
breach of this Agreement for Cause, upon written Notice of Termination from the
Company to Employee and Employee’s failure to cure such Cause as provided in
Section 6(a)(iii)(E) hereof. If Employee’s employment is terminated for Cause,
the Company shall pay Employee his full Annual Base Salary accrued through the
Determination Date, and the Company shall have no further obligation to Employee
under this Agreement for other compensation or benefits accrued but unpaid prior
to the Determination Date.
(e) Termination On Change of
Control of the Company. Employee’s employment hereunder 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 the Employee. If the
Employee’s employment pursuant to this Section 6(e) is terminated, Employee
shall be entitled to receive the compensation, benefits and reimbursement earned
or accrued by Employee under the terms of his employment prior to the
Determination Date, including any incentive bonus. In addition, Employee shall
receive as a severance payment the balance of Employee’s compensation through
the end of the then current term of this Agreement. Also, upon
Employees termination in connection with this Section 6(e), Employee shall be
entitled to an annual bonus for the remaining period of this contract equal to
the bonus due to Employee for the immediately preceding fiscal year. Employee’s
employment hereunder may not be terminated by the Company following a Change in
Control of the Company without it being a breach of this Agreement.
(f) Termination by
Employee. Employee may terminate his employment hereunder for Good Reason
or if his health should become impaired to an extent that makes his continued
performance of his duties hereunder hazardous to his physical or mental health
or his life, provided
that Employee 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, Employee shall submit to an examination by a doctor
selected by the Company and such doctor shall have concurred in the conclusion
of Employee’s doctor. If Employee shall terminate his employment pursuant to
this Section 6(f), Employee shall be entitled to receive the
following:
(i) the
compensation, benefits and reimbursement earned or accrued by Employee under the
terms of his employment prior to the Determination Date, including any incentive
bonus,
(ii) if
Employee shall terminate his employment for Good Reason consisting of the
Company’s material breach of this Agreement, severance, including bonuses, as
defined in Section 6 (e) shall be due and payable to Employee.
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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. A copy of notices given hereunder will be delivered or sent
to the following persons and addresses (or such other address as designated from
time to time):
(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. This Agreement is for the unique personal services of
Employee, and Employee shall not be entitled to assign any of his rights or
obligations hereunder.
(f) Entire Agreement.
This Agreement constitutes the entire agreement between the parties with respect
to the employment of Employee. This Agreement can be amended or modified only in
a writing signed by Employee 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.
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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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“Employee”
/s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
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