EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between
Park City Group, Inc., a Delaware corporation (the "Company") and Xxxxxxx X.
Xxxxxx ("Employee"), effective January 1, 2005.
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.
D. This Agreement amends and replaces that certain Employment
Agreement between the parties hereto dated July 1, 2003.
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 January 1, 2005 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 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.
(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 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 secretary
services to the Company. Should Employee retain someone else to perform
personal accounting 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.
(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.
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:
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(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. 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.
"Company" "Employee"
PARK CITY GROUP, INC., a Delaware corporation
By:__________________________________________ ______________________________
Name:________________________________________ Name: Xxxxxxx X. Xxxxxx
Title:_______________________________________
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