Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is being made as of the 28th day of
April 2004 between BROADCAST INTERNATIONAL, INC., a Utah corporation (the
"Company"), having its principal offices at 0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxx and Xxxxxx X. Xxxxx, President & CEO, residing at 0000 X. Xxxx
Xxxxxxxx Xxxx, Xxxxx, Xxxx 00000.
WITNESSSETH:
WHEREAS, the Company desires to continue the employment of the Executive
and the Executive desires to be employed by the Company as President and CEO
upon the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual premises and agreements
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Nature of Employment; Term Agreement. The Company hereby employs
the Executive and the Executive agrees to serve the Company as its President,
CEO, upon the terms and conditions contained herein, for a term commencing as
of the date hereof and continuing until December 31, 2006 (the "Employment
Term"); provided, however, that unless either the Company or the Executive
gives notice that it or he desires to terminate this Agreement at least sixty
(60) days prior to the date of its termination, this Agreement (including this
Section 1) shall automatically be renewed for additional successive periods of
one (1) year.
2. Duties and Powers as Employee.
(a) During the Employment Term, the Executive shall be employed by
the Company as its President and CEO. The Executive agrees to devote such
time and efforts to the performance of his duties under this Agreement as
shall be reasonably necessary. In the performance of his duties, the
Executive shall be subject to the direction of the Board of Directors of the
Company. The Executive shall be available to travel as the needs of the
business require.
(b) During the Employment Term, the Executive shall be nominated to
be a director of the Company.
3. Compensation
(a) As compensation for his services hereunder, the Company shall pay
the Executive, during the Employment term, a base salary (the "Base Salary")
payable in equal semi-monthly installments at the annual rate of $120,000 for
the year ended December 31, 2004, subject to such increases as the Board of
Directors may approve. Additionally, the Executive shall participate in the
present and future employee benefit plans of the Company provided that he
meets the eligibility requirements thereof.
(b) In addition to the Base Salary provided herein, the Executive
shall receive as a performance bonus payment (a "Bonus"), on an annual basis,
a sum equal to up to 100% of the Executive's Base Salary for the fiscal year
then ended. The exact percentage shall be determined in the absolute sole
discretion of the Compensation Committee of the Board of Directors of the
Company based upon an evaluation of the performance of the Executive and the
Company during the previous fiscal year. The Bonus shall be paid to the
Executive within ninety (90) days after the end of the Company's fiscal year
notwithstanding that such date may be after the expiration of the Employment
Term.
(c) In addition, the Company shall request that the Stock Option
Committee of the Board of Directors of the Company issue the Executive
incentive stock options ("Options") to acquire 50,000 shares of common stock
of the Company effective as of the date hereof. The Options shall have an
exercise price equal to the fair market value on the trading day preceding the
date of grant, and shall vest in equal installments over three years, subject
to earlier vesting as described in this Agreement and in the Company's Stock
Option Plan. It is also anticipated that the Executive will be granted
additional options effective annually as shall be determined in the absolute
sole discretion of the Compensation Committee of the Board of Directors of the
Company.
4. Expenses; Vacations. The Executive shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses
necessarily incurred in the performance of his duties hereunder, upon
submission and approval of written statements and bills in accordance with the
then regular procedures of the Company. The Executive shall be entitled to
reasonable vacation time in accordance with then regular procedures of the
Company governing executives as determined from time to time by the Company's
Board of Directors but in no event less than twenty-five days per year.
5. Representations and Warranties of Employee. The Executive represents
and warrants to the Company that (a) he is under no contractual or other
restriction or obligation which is inconsistent with the execution of this
Agreement, the performance of his duties hereunder, or the other rights of the
Company hereunder; and (b) he is under no physical or mental disability that
would hinder his performance of duties under this Agreement.
6. Non-Competition. The Executive agrees that he will not (a) during
the period he is employed under this Agreement engaged in, or otherwise
directly or indirectly be employed by, or act as a consultant or lender to, be
a director, officer, employee, owner, or partner of, any other business or
organization that he or it shall then be competing with the Company, and (b)
for a period of two (2) years after he ceases to be employed by the Company
under this Agreement, directly or indirectly compete with or be engaged in the
same business as the Company, or be employed by, or act as consultant or
lender to, or be a director, officer, employee, owner, or partner of, any
business or organization which at the time of such cessation, competes with or
is engaged in the same business as the Company, except that in each case the
provisions of this Section 6 will not be deemed breached merely because the
Executive owns not more than five percent (5.0%) of the outstanding common
stock of a corporation, if, at the time of its acquisition by the Executive,
such stock is listed on a national securities exchange, is reported on NASDAQ,
or is regularly traded in the over-the-counter market by a member of national
securities exchange.
7. Confidential Information. All confidential information which the
Executive may now possess, may obtain during the Employment Term, or may
create prior to the end of the period he is employed by the Company under this
Agreement, relating to the business of the Company or of any customer or
supplier of the Company shall not be published, disclosed, or made accessible
by him to any other person, form, or corporation during the Employment Term or
any time thereafter without the prior written consent of the Company. The
Executive shall return all tangible evidence of such confidential information
to the Company prior to or at the termination of his employment.
8. Termination.
(a) Notwithstanding anything herein contained, if on or after the
date hereof and prior to the end of the Employment Term, the Executive is
terminated "For Cause" (as defined below) then the Company shall have the
right to give notice of termination of Employee's services hereunder as of a
date to be specified in such notice, and this Agreement shall terminate on the
date so specified in such notice. Termination "For Cause" shall mean the
Executive shall (i) be convicted of a felony crime, (ii) commit any act or
omit to take any action in bad faith and to the detriment of the Company,
(iii) commit an act of moral turpitude, (iv) commit an act of fraud against
the Company, or (v) materially breach any term of this Agreement and fail to
correct such breach within thirty (30) days after commission thereof.
(b) In the event the Executive shall be physically or mentally
incapacitated or disabled or otherwise unable fully to discharge his duties
hereunder for a period of six months, then this Agreement shall terminate upon
90 days' written notice to the Executive, and no further compensation shall be
payable to the Executive, except as may otherwise be provided hereunder any
disability insurance policy.
(c) In the event that the Executive shall die, then this Agreement
shall terminate on the date of the Executive's death, and no further
compensation shall be payable to the Executive, except as may otherwise be
provided under any insurance policy or similar instrument.
(d) In the event that this Agreement is terminated "For Cause"
pursuant to Section 8 (a), then the Executive shall be entitled to receive
only his Base Salary at the rate provided in Section 3 to the date on which
termination shall take effect.
(e) In the event this Agreement is terminated by the Company other
than for the reasons set forth in Section 8 (a) or 8 (b) or upon a Section 9
event, the Executive shall be entitled to receive severance pay consisting of
a lump sum distribution (with no present value adjustment) equal to the Base
Salary at the rate provided in Section 3 plus the Bonus (fixed at the rate of
50% of such Base Salary) for the greater of (i) two (2) years, notwithstanding
that such two-year period might extend beyond the Employment Term or (ii) the
remainder of the Employment Term. In such case any of the Executive's issued
but unvested options (including the Options described in this Agreement) shall
vest immediately upon such termination. In addition, in such case the two (2)
year period described in Section 6 (b) of this Agreement shall be reduced to
one (1) year.
(f) Nothing contained in this Section 8 shall be deemed to limit any
other right the Company may have to terminate Employee's employment hereunder
upon any ground permitted by law.
9. Change of Control.
In the event of a future disposition of (or including) the properties and
business of the Company, substantially as an entirety, by merger,
consolidation, sales of assets, or otherwise, the Company shall assign this
letter and all of its rights and obligations hereunder to the acquiring or
surviving corporation and such corporation shall assume in writing all of the
obligations of the Company, and the Company (in the event and so long as it
remains in business as an independent going enterprise) shall remain liable
for the performance of its obligations hereunder in the event of an
unjustified failure of the acquiring corporation to perform its obligations
under this agreement.
Notwithstanding the foregoing, in any such event, or in the event of the
acquisition by any person, or group of persons acting in concert, of shares
of capital stock of the Company enabling such person or person to cast 20% or
more of the votes entitled to be voted at any meeting to elect directors (each
such event of disposition or acquisition of stock being hereinafter referred
to as a "Section 9 Event"), the Executive or the Company shall have the right
to terminate this Agreement by written notice given within six (6) months of
the date (the "Section 9 Date") of such Section 9 Event. Upon such
termination, the Executive shall receive severance pay consisting of a single
lump sum distribution (with no present value adjustment) equal to the Base
Salary as provided in Section 3 plus Bonus (fixed at the rate of 50% of such
Base Salary) for the greater of (i) two (2) years, notwithstanding that such
two-year period might extend beyond the Employment Term or (ii) the remainder
of the Employment Term. Upon such Section 9 Event, any of the Executive's
issued but unvested options (including the options described in this
Agreement) shall vest immediately upon such Section 9 event. In addition,
upon a Section 9 Event in which the shareholders of the Company exchange their
shares for stock of any other company or other consideration, the Executive
shall receive an amount equal to the per share price paid to the stockholders
of the Company less the Pre-Announcement Price multiplied by 50,000
10. Survival. The covenant, agreements, representations, and warranties
contained in or made pursuant to this Agreement shall survive the Executive's
termination of employment, irrespective of any investigation made by or on
behalf of any party.
11. Modification. This Agreement sets forth the entire understanding of
the parties with respect to the subject matter hereof, supersedes all existing
agreements between them concerning such subject matter, and may be modified
only by a written instrument duly executed by each party.
12. Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or delivered against receipt to the party to whom it
is to be given at the address of such party set forth in the preamble to this
Agreement (or to such other address as the party shall have furnished in
writing in accordance with the provisions of this Section 12). In the case of
a notice to the Company, a copy of such notice (which copy shall not
constitute notice) shall be delivered to Xxxx X. Xxxxxx, Secretary and
General Counsel. Notice to the estate of the Executive shall be sufficient if
addressed to the Executive provided in this Section 12. Any notice or other
communication given by certified mail shall be deemed sufficient if given at
the time of certification thereof.
13. Binding Agreement; Benefit. The provisions of this Agreement will be
binding upon, and will inure to the benefit of, the respective heirs, legal
representatives and successors of the parties hereof.
14. This Agreement will be governed by, and construed and enforced in
accordance with, the laws of the State of Utah.
15. Other. The waiver by any party of a breach of any provision of this
Agreement must be in writing and shall not operate or be construed as a waiver
of any subsequent breach by such other party.
This Agreement contacts the entire agreement between the parties with
respect to the subject matter hereof and supercedes all prior agreements or
understandings among the parties with respect thereto. This Agreement may be
amended only by an agreement in writing signed by the parties hereto.
The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
Any provision of this Agreement that is prohibited or enforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
This Agreement is personal in its nature and the parties hereto shall
not, without the consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder; provided, however, that the Company may
assign its rights and obligations under this agreement to any subsidiary or
affiliate of the Company and the provisions hereof shall inure to the benefit
of, and be binding upon each successor of the Company, whether by merger,
consolidation, transfer or all or substantially all of its assets, or
otherwise.
IN WITNESS WHEREOF, the parties have duly executed this agreement as of
the date first above written.
"Executive" "Company"
/s/Xxxxxx X. Xxxxx by: /s/ Xxxx X. Xxxxxx
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its: General Council
