EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made effective as of June 1,
1996 between COVOL Technologies, Inc., a Delaware corporation (the "Company) and
Xxxxx X. Xxxx (the "Executive").
WHEREAS, the Executive is leaving employment with PacifiCorp to become employed
by the Company as its Executive Vice President and Chief Financial Officer
effective June 1, 1996; and
WHEREAS, the Company and the Executive wish to record their agreement with
respect to the employment of Executive by Company, including the incentives
which the Company will provide to the Executive to induce him to accept such
employment.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and with knowledge that each party hereto intends to rely
hereon, the Company and the Executive agree as follows:
1.Base Salary. During the first twelve months of this Agreement, the
Executive's regular salary, before all customary and proper payroll deductions,
shall be $6,667.00 per month payable bi-weekly. During the second twelve months
of this Agreement, the Executive's regular salary, before all customary and
proper payroll deductions, shall be $8,334.00 per month payable bi-weekly.
During the last twelve months of this Agreement, the Executive's regular salary,
before all customary and proper payroll deductions, shall be $9,167.00 per month
payable bi-weekly.
2. General Bonuses and Benefits. The Executive shall be entitled to
participate in and receive the benefits bonus plans and other benefit plans
generally available to other Company employees.
3. Expense Reimbursement. The Executive shall be entitled to prompt
reimbursement for reasonable expenses incurred by the Executive in performing
services for the Company.
4. Grant of Options. The Company shall grant to the Executive, in
accordance with the terms of the Stock Option Agreement attached hereto as
Exhibit A, the right and option to purchase all or any part of 100,000 shares of
the Company's Common Stock at a purchase price of $1.50. Alternatively, upon
mutual agreement of the Company and the Executive, the Company shall pay to the
Executive, in lieu of the grant of stock options, a sum equal to the market
price of 100,000 shares of the Company's Common Stock on June 1, 1996, less
$150,000.00.
5. Medical Insurance. The Company shall pay the premium for and
provide medical insurance benefits for the Executive and his family which are
comparable to the medical insurance benefits Executive received from PacifiCorp.
Said medical insurance shall be provided with no lapse in coverage between the
time Executive's medical insurance benefits from PacifiCorp terminate and the
time Executive's medical insurance benefits from the Company begin.
6. Personal Time Off. The Executive shall be entitled to at least six
(6) weeks paid personal time off each year. Personal time off may be carried
over from year to year. At the end of the term of this Agreement, the Executive
shall be entitled to be paid for the prorated portion of the accrued salary
attributable to unused personal time off.
7. Leave of Absence. The Executive shall be provided a paid leave of
absence for the purpose of serving as an organ donor for his brother.
8. Automobile Expense. The Company will provide the Executive with a
monthly auto allowance. This allowance is to compensate the Executive for the
use of his personal automobile for travel related to the business of the
Company.
9. Death. If the Executive dies during the term of this Agreement,
his personal representative or designated survivor shall be entitled to receive
all of the salary and benefits provided hereunder for the remaining term of this
Agreement.
10. Dental Expense. The Company will provide the Executive with an
annual dental allowance in the amount of $4,500.00 or provide comparable
coverage.
11. Term. This Agreement shall commence on June 1, 1996 and shall
terminate on May 31, 1999.
12. Severance Pay. If the Executive does not continue in the
employ of the Company after the termination of this Agreement, whether or not
the Executive is offered continued employment by the Company, Company shall pay
to the Executive, no later than July 1, 1999, the sum of one years annual wages.
The Executive shall not be required to mitigate the amount of the payment
provided for in this section by seeking other employment or otherwise; nor shall
the amount of the payment be reduced by any compensation earned by the Executive
as the result of employment by another employer after termination or otherwise.
13. Indemnification. The Company shall release, indemnify and hold
harmless the Executive against and from any and all loss, claims, actions or
Suits, including costs and attorney's fees, both at trial and on appeal,
resulting from, or arising out of or in any way connected with the Executive's
acts as an employee of the Company.
14. Miscellaneous.
(a) This Agreement shall be governed by and construed under the laws of
the state of Utah, exclusive of choice of law rules. If any provision or
provisions of this Agreement are found to be unenforceable, the remaining
provisions shall nevertheless be enforceable and shall be construed as if the
unenforceable provisions were deleted.
(b) This Agreement may be amended or modified only by written
consent of the Company and the Executive.
IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate as of
the date written above.
Company: COVOL TECHNOLOGIES, INC.
a Delaware Corporation
By: /s/ Xxxx Xxxxxxx
Its: Chairman
Executive: /s/ Xxxxx X. Xxxx
