Exhibit 10
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between
Park City Group, Inc., a Nevada corporation (the "Company") and Xxxxxxx X.
Xxxxxx ("Employee"), effective July 1, 2003.
Recitals:
A. Employee is the President and Chief Executive Officer of 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.
D. This Agreement amends and replaces that certain Employment
Agreement between the parties hereto dated January 1, 2001.
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 as of July 1, 2003 and end on the 30th day of June 2008
(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.
(a) General Duties. Employee shall be employed as 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 other 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,
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 his
full 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.
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(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 $350,000 ("Annual Base Salary"). The Annual Base Salary,
which shall be pro-rated for any partial employment period, will be
payable in equal semi-monthly 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) Company Vehicle. The Company shall provide the Employee with a
company vehicle. The cost of such vehicle shall not exceed $1,000.00
per month plus applicable deposits if purchased on a monthly
installment contract or leased pursuant to an 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.
(c) 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 a telephone line and system for business use, along with
related costs, at the Employee's residence. In addition, the Company
shall also provide the Employee with a computer and other equipment
deemed 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 secretarial services to the Company.
Should Employee retain someone else to perform personal accounting
services, the Company shall bear the cost of such services.
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(d) 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 living with him, coverage under a health and dental insurance
plan during the term of Employee's employment.
(e) Vacations, Holidays, etc. Employee shall have four (4) weeks
paid vacation and twelve (12) days sick leave during each year he is
employed.
(f) 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.
(g) Incentive Bonus. An incentive bonus, based upon the Company's
achievement of performance goals shall be paid to the Employee. The
goals will be pre-determined each year by the Compensation Committee of
the Board of Directors in discussion with the Employee.
(h) Travel and Business Expense Reimbursement. The Company shall
promptly reimburse Employee for all of his reasonable travel and
business expenses.
(i) Life Insurance. The Company shall maintain a term life
insurance policy in the name of the Employee for at least $10,000,000
with the beneficiary to be designated by the Employee at his sole
discretion.
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.
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(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.
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.
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(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.
(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 Employee's 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.
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(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.
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.
(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.
"Company" "Employee"
PARK CITY GROUP, INC., a Delaware corporation
By: /s/ Xxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: CFO
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