Exhibit 10.1
Xxxxx X. Xxxxx Employment Agreement
GOLD STANDARD, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of August 15, 1999
by and between Gold Standard, Inc., a Utah corporation, (the "Company") and
Xxxxx X. Xxxxx (the "Employee").
In consideration of the promises and mutual covenants contained
herein, the parties hereto agree as follows:
1. Employment; Location
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The Company hereby employs Employee and Employee hereby accepts
such employment in Salt Lake County in the State of Utah or in such other
location as may be mutually agreed between the parties.
2. Term
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The Company agrees to employ Employee and Employee agrees to
accept employment with the Company for the 5-year period beginning as of the
date hereof through the fifth anniversary date hereof, unless this Agreement is
sooner terminated pursuant to Section 6 below.
3. Duties
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Employee shall be the President and Chief Executive Officer of
the Company. Employee shall diligently execute such duties and shall devote his
full time, skills, and efforts to such duties during ordinary working hours.
Employee shall perform such duties subject to the general supervision and
control of the Company's Board of Directors.
4. Compensation and Benefits
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The Company shall pay Employee, and Employee accepts as full
compensation for all services to be rendered to the Company, the following
compensation and benefits:
4.1 Salary. The Company shall pay Employee an annual salary of
Eighty Five Thousand Dollars ($85,000) per year, payable in equal installments
at least monthly on the last day of each month or at more frequent intervals in
accordance with the Company's customary pay schedule, subject to such increases
as the Board of Directors may determine from time to time in its sole
discretion. At a minimum unless Employee decines, Employee's annual salary will
be increased as follows: (i) on the second anniversary of this Agreement, by
$1,000 per month; and (ii) on the fourth anniversary of this Agreement, by
$1,000 per month.
4.2 Right to Purchase Shares. As partial consideration for
Employee's employment, Employee is hereby granted the right to purchase 100,000
restricted shares of the Employer's common stock (the "Shares"), exercisable on
a single occasion during the period that this Agreement remains in force. The
purchase price per share shall be $0.25 greater than the trading price of the
Shares on the date of exercise. The Employee may purchase the Shares using a
promissory note ("Note") having the following terms: (i) the Note shall be
non-recourse to the Employee; (ii) the Note shall be interest-free; (iii) the
principal amount of the Note shall be due in a single installment on the fourth
anniversary of the date of issuance of the Note; and (iv) the Note shall be
secured by a pledge of the Shares.
4.3 Company Automobile. The Employee shall have the right to use
of an automobile furnished by the Employer, the costs of which shall not exceed
those customary for an employee holding the position of the Employee in a
comparable organization.
4.4 Additional Benefits. Employee shall be eligible to
participate in the Company's employee benefit plans for employees, if and when
any such plans may be adopted, including, without limitation, bonus plans,
pension or profit sharing plans, incentive stock plans, and those plans covering
life, disability, health, and dental insurance in accordance with the rules
established in the discretion of the Board of Directors for individual
participation in any such plans as may be in effect from time to time.
4.5 Vacation, Sick Leave, and Holidays. Employee shall be
entitled to an aggregate of up to four (4) weeks leave for vacation each
calendar year at full pay or such increased leave as may be allowed by the
Company's Board of Directors for members of management generally. In addition,
Employee shall be entitled to sick leave and holidays at full pay in accordance
with the Company's policy.
4.6 Deductions. The Company shall have the right to deduct from
the compensation due to Employee hereunder any and all sums required for social
security and withholding taxes and for any other federal, state, or local tax or
charge which may be hereafter enacted or required by law as a charge on the
compensation of Employee.
5. Business Expenses
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The Company shall promptly reimburse Employee for all reasonable
out-of-pocket business expenses he incurs in fulfilling his duties hereunder, in
accordance with the general policy of the Company in effect from time to time,
provided that Employee furnishes to the Company adequate records and other
documentary evidence required by all federal and state statutes and regulations
issued by the appropriate taxing authorities for the substantiation of each such
business expense as a deduction on the federal or state income tax returns of
the Company.
6. Termination
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6.1 Termination for Cause. This Agreement and Employee's
employment hereunder shall terminate upon Employee's death and is otherwise
immediately terminable for "cause" (as defined below) upon written notice from
the Company to Employee. As used in this Agreement, "cause" shall include (i)
habitual neglect of or deliberate or intentional refusal to perform his duties
and obligations under this Agreement, (ii) fraudulent or criminal activities,
(iii) any grossly negligent or unethical activity, or (iv) any activity that
causes substantial harm to the Company, its reputation, or to its directors or
employees. A determination of whether Employee's actions justify termination for
cause and the date on which such termination is effective shall be made by the
Company's Board of Directors in its sole discretion.
6.2 Termination for Disability. The Company's Board of Directors
may terminate this Agreement for the "disability" (as defined below) of Employee
at the expiration of a consecutive two-month period of disability if the Board
of Directors determines in its sole discretion that Employee's disability will
prevent him from substantially performing his duties hereunder. As used in this
Agreement, "disability" shall be defined as (i) Employee's inability, by reason
of physical or mental illness or other cause, substantially to perform his
duties hereunder, or (ii) in the discretion of the Board of Directors, as it is
defined in any disability insurance policy in effect at the Company during the
time in question. Employee shall receive full compensation, benefits, and
reimbursement of expenses pursuant to Sections 4 and 5 above from the date the
disability begins until the scheduled termination of this Agreement, or until he
begins to receive disability benefits pursuant to a Company disability insurance
policy, whichever occurs first.
6.2 Effect of Termination. In the event Employee's employment is
terminated hereunder, all obligations of the Company and all obligations of
Employee shall cease except as provided in Sections 7 through 16 below. Upon
such termination, Employee or his representative or estate shall be entitled to
receive only the compensation, benefits, and reimbursement earned or accrued by
him under Sections 4 and 5 above, but shall not be entitled to any further
compensation, benefits, or reimbursement from such date.
6.4 Option to Retain as Consultant Upon termination of
Employee's employment, other than for reason of Employee's death, the Company
shall have an option to retain the services of Employee as a consultant for a
period of two years from the date of termination. The Company shall exercise
such option by giving written notice thereof to Employee on the date of
termination or within five (5) days thereafter, and the obligations of Employee
as a consultant upon such exercise shall be effective from the date of
termination. If the Company elects to exercise such option, then the Company
shall be obligated to utilize the services of employee for a minimum of ten
hours per calendar month during the consultancy period, and Employee shall make
himself available to the Company for no less than 10 hours per calendar month.
The parties agree that as consideration for his services as a consultant the
Employee shall receive the greater of: (i) an hourly fee to be mutually agreed
by the parties, or (ii) an amount to be no less than an hourly equivalent to
Employee's salary as a full time employee of the Company. In addition, the
Company shall reimburse Employee for any reasonable expenses paid or incurred by
employee in connection with the performance of his duties as a consultant of the
Company. Employee shall be entitled to no compensation as a consultant other
than the above fees and expenses. Employee acknowledges and agrees that he shall
be bound by the covenant not to compete with the Company as set forth in Section
7 below, as well as by the obligations concerning confidential information as
set forth in Section 8, below, during the period for which he is a consultant
for the Company.
7. Covenant Not to Compete
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7.1 Covenant. Employee hereby agrees that, while he is employed
by the Company as either an employee or as a consultant pursuant to this
Agreement, and, in any event, during the one-year period following the
termination of his employment hereunder, he will not directly or indirectly
compete (as defined in Section 7.2 below) with the Company in any geographic
area in which the Company does or has done business.
7.2 Direct and Indirect Competition. As used herein, the phrase
"directly or indirectly compete" shall include owning, managing, operating or
controlling, or participating in the ownership, management, operation or control
of, or being connected with or having any interest in, as a stockholder,
director, officer, employee, agent, consultant, assistant, advisor, sole
proprietor, partner or otherwise, any business (other than the Company's) which
is the same as, or similar to, or competitive with any business conducted or to
be conducted by the Company or any of the Company's subsidiaries; provided,
however, that this prohibition shall not apply to ownership of less than one
percent (1%) of the voting stock in companies whose stock is traded on a
national securities exchange or in the over-the-counter market.
7.3 Enforceability. If any of the provisions of this Section 7
is held unenforceable, the remaining provisions shall nevertheless remain
enforceable, and the court making such determination shall modify, among other
things, the scope, duration, or geographic area of this Section to preserve the
enforceability hereof to the maximum extent then permitted by law. In addition,
the enforceability of this Section is also subject to the injunctive and other
equitable powers of a court as described in Section 10 below.
8. Confidential Information
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Employee acknowledges that during his employment or consultancy
with the Company he will develop, discover, have access to, and become
acquainted with technical, financial, marketing, personnel, and other
information relating to the present or contemplated products or the conduct of
business of the Company which is of a confidential and proprietary nature
("Confidential Information"). Employee agrees that all files, records,
documents, and the like relating to such Confidential Information, whether
prepared by him or otherwise coming into his possession, shall remain the
exclusive property of the Company, and Employee hereby agrees to promptly
disclose such Confidential Information to the Company upon request and hereby
assigns to the Company any rights which he may acquire in any Confidential
Information. Employee further agrees not to disclose or use any Confidential
Information and to use his best efforts to prevent the disclosure or use of any
Confidential Information either during the term of his employment or consultancy
or at any time thereafter, except as may be necessary in the ordinary course of
performing his duties under this Agreement. Upon termination of Employee's
employment or consultancy with the Company for any reason, Employee shall
promptly deliver to the Company all materials, documents, data, equipment, and
other physical property of any nature containing or pertaining to any
Confidential Information, and Employee shall not take from the Company's
premises any such material or equipment or any reproduction thereof.
9. No Conflicts
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Employee hereby represents that, to the best of his knowledge,
his performance of all the terms of this Agreement and his work as an employee
or consultant of the Company does not breach any oral or written agreement which
he has made prior to his employment with the Company.
10. Equitable Remedies
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Employee acknowledges and agrees that the breach or threatened
breach by him of certain provisions of this Agreement, including without
limitation, Sections 7and 8, above, would cause irreparable harm to the Company
for which damages at law would be an inadequate remedy. Accordingly, Employee
hereby agrees that in any such instance the Company shall be entitled to seek
injunctive or other equitable relief in addition to any other remedy to which it
may be entitled.
11. Assignment
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This Agreement is for the unique personal services of Employee
and is not assignable or delegable in whole or in part by Employee without the
consent of the Board of Directors of the Company. This Agreement may not be
assigned by Employer without the prior written consent of Employee. The terms of
this Agreement shall inure to the benefit of, be binding upon, assumed by, and
be binding upon, the successors and permitted assigns of the parties.
12. Waiver or Modification
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Any waiver, modification, or amendment of any provision of this
Agreement shall be effective only if in writing in a document that specifically
refers to this Agreement and such document is signed by the parties hereto.
13. Entire Agreement
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This Agreement constitutes the full and complete understanding
and agreement of the parties hereto with respect to the subject matter covered
herein and supersedes all prior oral or written understandings and agreements
with respect thereto.
14. Severability
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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.
15. Notices
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Any notice required 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, with written
verification of delivery, or by facsimile or other electronic transmission to
the other party to the address or telephone number set forth below or to such
other address or telephone number as either party may designate from time to
time according to this provision. A notice delivered personally or by facsimile
or electronic transmission shall be effective upon receipt. A notice delivered
by mail or by private courier shall be effective on the third day after the day
of mailing.
(a) To Employee at: 0000 Xxxxxxx Xx.
Xxxx Xxxx Xxxx, XX 00000
(b) To the Company at: Xxxxx 000, Xxxxxx Xxxxxxxx
000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
16. Governing Law
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This Agreement shall be governed by and construed in accordance
with the laws of the State of Utah.
IN WITNESS WHEREOF, Employee has signed this Agreement
personally and the Company has caused this Agreement to be executed by its duly
authorized representative.
GOLD STANDARD, INC. EMPLOYEE
By:/s/ Xxxx Xxxxxx /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Its: Secretary
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