EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made this 31st day of January,
1997, by and between Salt Lake Mortgage Corp., a Utah Corporation
(ASLM@), Celtic Investment, Inc., a Delaware Corporation (AParent@)
and Xxxxx Xxxxxx, Xx. ("Employee").
RECITALS
WHEREAS, SLM and Parent (hereafter jointly referred to as
AEmployer@) and Employee desire and agree to enter into an
employment relationship by means of this agreement (AEmployment
Agreement@); and
WHEREAS, SLM desires to employ Employee as its President
and Employee is willing to accept such employment by SLM on the
terms and subject to the conditions set forth in this Employment
Agreement; and
WHEREAS, the Parent desires to employ Employee as its Senior
Vice President and Employee is willing to accept such employment by
the Parent on the terms and subject to the conditions set forth in this
Employment Agreement.
NOW THEREFORE, in consideration of the promises and mutual
covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:
AGREEMENT
1. Employment and Duties. Upon the effective date of the
employment defined herein ("Effective Date"), Employer shall, and
hereby does, employ the Employee and Employee shall, and hereby
does, accept employment as President and Chief Executive Officer of
SLM and as Senior Vice President of the Parent. Employee agrees to
devote in good faith his full time and best effort to the services that he
is required to render to Employer hereunder. Employee shall report to
SLM=s Board of Directors and to the Parent=s President and at all
times during the term of this Agreement shall have powers and duties
at least commensurate with his position in SLM and Parent.
Employee=s duties with SLM shall be consistent with those historically
held by Employee as President of SLM.
1.1. Disclosure and Acceptance of Other Activities.
Employer acknowledges that Employee is currently involved, for his
own account, in land development, real estate acquisitions and the
ownership, purchase and sale of real estate contracts, mortgage notes
and trust deed notes. Employer also acknowledges that Employee is
also engaged in the purchase of passive investments in various
businesses. Employer also acknowledges that Employee is an owner
of Xxxxx & Xxxxxx Enterprises, a privately-held company engaged in a
land development project in Tooele County, Utah. Employee
acknowledges that he will not enter into any future investments in any
SLM related business sectors without first obtaining an approval from
the Board of Directors of SLM.
1.2. American Funds & Trust. The parties
acknowledge that Employee intends to attempt to acquire, either
individually, or through an affiliated company, American Funds &Trust
or the right to purchase American Funds & Trust. In the event such
acquisition is effected, Employee, or such affiliate, shall give Employer
the right to purchase American Funds & Trust (or Employee=s or such
affiliates right to purchase American Funds & Trust) on such terms and
conditions as the Employer and the Employee may agree to. In the
event Employer does not purchase American Funds & Trust, then
Employee (and any affiliate of Employee) shall sell all of his or its
interest in American Funds & Trust as soon as possible. In such a
sale event transaction wherein employee receives compensation,
employee agrees to reimburse SLM for the actual time spent in relation
to the project. The amount of reimbursement will be based on
employee=s hourly annual salary rate, not to exceed 250 hours. If
Employer elects not to purchase American Funds & Trust, and if
thereafter Employee is, in the opinion of Employer, devoting excessive
time to American Funds & Trust, Employer may require Employee to
discontinue such excessive time involvement with American Funds &
Trust. Any demand by Employer to Employee that Employee
discontinue such excessive time involvement with American Funds &
Trust shall be made in writing to Employee and shall be hand delivered
directly to Employee. In the event Employee does not discontinue such
excessive time involvement with American Funds & Trust within twenty
(20) days after receipt of such notice, Employer may terminate this
Employment Agreement immediately thereafter. Such termination shall
be deemed to be Termination for Cause as defined in paragraph 2.1.4
below. Any determination by Employer that Employee is devoting
excessive time to American Funds & Trust shall be reasonable and
made in good faith.
1.3. Consent by Employer. Employer consents to the
continued participation by Employee in the activities described in
paragraphs 1.1 and 1.2 subject to his fulfillment of any and all fiduciary
duties he will have as an officer and director of SLM and an officer and
director of Parent including those fiduciary duties relating to corporate
opportunities.
2. Term of Employment.
2.1 Definitions. For the purposes of this Employment
Agreement, the following terms shall have the following meanings:
2.1.1.Adjusted Pretax Profits. For purposes of this
Agreement, the term AAdjusted Pretax Profits@ shall have the
same meaning as AAPI@ has in the Escrow Agreement
(hereafter defined) and shall be calculated in the same manner
it is calculated in the Escrow Agreement.
2.1.2. Agreement and Plan of Merger. AAgreement
and Plan of Merger@ shall mean the Agreement and Plan of
Merger dated the date hereof, entered into by Parent, Celtic
Investment Merger Sub, Inc., SLM, Xxxxx Xxxxxx, Xx. and
Xxxxx Xxxxx, which provides for the acquisition SLM by Parent
by way of reverse triangular merger of Celtic Merger Sub, Inc.
into SLM.
2.1.3.Bonus Period. ABonus Period@ shall mean (i)
the six separate periods which are provided for in Section 4.1.2
of this Employment Agreement for the purpose of calculating
the amount of cash bonuses due hereunder to Employee; and
(ii) the four separate periods which are provided for in the
Stock Option Agreement (as hereafter defined) for the purpose
of calculating the number of Performance Based Option Shares
(as hereafter defined) Employee shall be entitled to purchase
under the Stock Option Agreement.
2.1.4 Escrow Agreement. AEscrow Agreement@ shall
mean the Escrow Agreement dated the date hereof , entered
into by Celtic Investment, Inc., Xxxxx Xxxxxx, Xx., Xxxxx Xxxxx
and Security Title Insurance Agency of Utah, Inc. as Escrow
Agent, which provides for the deposit into escrow of 500,000
shares of Celtic $.001 par value common stock (ACeltic
Common Stock@) owned by Xxxxx Xxxxxx, Xx. and Xxxxx Xxxxx
and for the release of such shares based upon the terms and
conditions of such Escrow Agreement.
2.1.5.Stock Option Agreement. AStock Option
Agreement@ shall mean the Stock Option Agreement dated the
date hereof, entered into by Celtic Investment, Inc. and
Employee whereby Employee is granted (i) options to purchase
150,000 shares of Celtic Common Stock, which options vest
over a period of time as provided for in the Stock Option
Agreement and (ii) options to purchase 350,000 shares of
Celtic Common Stock, which options vest on the basis of the
achievement of certain operating results as agreed to in the
Stock Option Agreement.
2.1.6. Termination for Cause. "Termination For Cause"
shall mean termination by Employer of Employee's
employment by the Employer by reason of Employee's willful
dishonesty towards, fraud upon, or deliberate injury or
attempted injury to Employer, or by reason of Employee's
willful material breach of this Employment Agreement which
has resulted in material injury to the Employer and any
termination of employment by Employer pursuant to notice
under paragraph 1.2 above.
2.1.7 Termination Without Cause. ATermination
Without Cause@ shall mean any termination of employee=s
employment by Employer other than for cause by Reason of
Disability or by Reason of Death.
2.1.8.Voluntary Termination. AVoluntary Termination@
shall mean termination by Employee of Employee=s
employment by Employer other than (i) as described in
paragraph 2.1.8 or (ii) termination by reason of Employee=s
death or disability as described in paragraphs 2. 5. and 2.6.
2.1.9.Good Reason Resignation. "Good Reason
Resignation" shall mean termination by Employee of
Employee's employment by Employer following the occurrence
of any of the events set out below unless such event is fully
corrected by the Employer within 30 days following written
notification by Employee to Employer that Employee intends to
terminate his employment for one or more of the reasons set
out below:
(a) removal of Employee from, or a failure
to appoint or reappoint Employee to, any of his offices
or the assignment of Employee to any duties
inconsistent with Employee's status as Chairman,
President and Chief Executive Officer of SLM and as
Senior Vice President of Parent or a material alteration
in the nature or status of Employee's responsibilities or
conditions of employment from those in effect prior to
the date of this Employment Agreement except
as contemplated by this Employment Agreement;
(b) any failure to elect or reelect Employee or his
designee to the Board of Directors of SLM or Parent
pursuant to provisisions of Sections 3.4 and 3.7 of the
Agreement and Plan of Merger;
(c) the relocation, without Employee's consent,
of SLM's principal executive offices to a location
outside of Salt Lake County or the imposition of a
requirement, without Employee's consent, that
Employee be based anywhere other than Salt Lake
County, except for required travel on Employer=s
business;
(d) failure by Employer without Employee's
consent to pay to Employee any portion of Employee's
current compensation, including bonuses, the vesting
of stock options and the issuance of shares upon
exercise of stock options;
(e) the failure to obtain the specific assumption
of this Employment Agreement by any successor or
assign of the Employer or any person acquiring a
substantial portion of the assets of either SLM or
Parent or, following any such assumption, assignment
or acquisition by an entity other than an affiliate of SLM
or Parent;
(f) any material breach by Employer of any
provision of this Employment Agreement; or
(g) the failure of the Capital Infusion (as defined
in Section 3 of the Escrow Agreement) to be made into
SLM within the time agreed to in the Escrow
Agreement.
2.2. Initial Term. The term of employment of Employee by
Employer under this Employment Agreement shall be for a period of
five (5) years beginning with Effective Date ("Initial Term"), unless
terminated earlier pursuant to this Section. At any time prior to the
expiration of the Initial Term, Employer and Employee may, by mutual
written agreement, extend Employee's employment under the terms of
this Employment Agreement for such additional periods as they may
agree.
2.3. Termination For Cause. Termination for Cause may be
effected immediately by Employer during the term of this Agreement by
written notification to Employee. Upon Termination For Cause, the
following shall promptly occur:
(a) Employer shall pay Employee all accrued salary
earned at the date of Termination for Cause;
(b) Employer shall pay Employee all vacation pay
which is accrued at the date of Termination for Cause;
(c) Employer shall pay all business expenses
incurred by Employee in connection with his duties hereunder
which are unpaid at the date of Termination for Cause;
(d) Employer shall pay to Employee all compensation
or benefits due to Employee at the date of Termination for
Cause under any agreement or plans, excluding stock options
or cash bonuses which are specifically provided for in
paragraphs 2.3 (e)(f)and (g) below;
(e) The compensation payable to Employee under
paragraph 4.1.2. hereunder is calculated on the basis of June
30 fiscal year end results and any bonus payable thereunder
will be payable in six Bonus Periods which are described in
paragraph 4.1.2. If Employee is Terminated for Cause, the
amount of bonus due to Employee under paragraph 4.1.2 shall
be prorated on the basis of the percentage of the Bonus Period
which has been completed as of the date of Termination for
Cause. The bonus compensation due to Employee under this
paragraph 2.3(e) will not be determinable until the completion
of the Employer=s consolidated audited financial statements for
the Bonus Period in which Employee is Terminated for Cause.
The bonus compensation will be paid to Employee within
twenty (20) days from the date such audited financial
statements are available. An example of this provision is as
follows:
If, under paragraph 4.1.2 of this Agreement, the
Employee would have been entitled to bonus
compensation of $50,000 if Employee had worked for
the entire Bonus Period, and if Employee=s
employment was Terminated for Cause after sixty
percent (60%) of the Bonus Period had been
completed, then Employee shall be entitled to a bonus
of $30,000 (60% of the total bonus compensation due
for such Bonus Period).
(f) Employee has been granted incentive stock
options to purchase 150,000 shares of Celtic Common Stock
pursuant to the Stock Option Agreement which options vest
solely on the basis of time of employment (ATime Based
Options@ and ATime Based Option Shares@). In the event the
Employee is Terminated for Cause, the Time Based Options
shall be accelerated and shall vest immediately, on a prorated
basis, through the date of Termination for Cause but shall be
prorated. The number of Time Based Option Shares which
Employee shall be entitled to purchase shall be prorated on the
basis of the percentage of the Vesting Period which has been
completed as of the date of Termination for Cause. An
example of this provision, is as follows:
In the event Employee has a Time Based Option
to purchase 75,000 Time Based Option Shares which
option vests on the first anniversary date of this
Employment Agreement, and if Employee is Terminated
for Cause eight months after the date of this
Employment Agreement, then Employee shall have the
right to purchase 50,000 Time Based Option Shares
immediately after the date of Termination for Cause
pursuant to the applicable terms and conditions of the
Stock Option Agreement. The right to purchase the
remaining 25,000 Time Based Option Shares shall be
terminated immediately as of the date of Termination
for Cause. Employee shall have no right to purchase
Time Based Option Shares for any vesting period which
is subsequent to the vesting period in which
Termination for Cause occurred.
(g) Employee has been granted incentive stock
options to purchase 350,000 shares of Celtic Common Stock
pursuant to the Stock Option Agreement which options vest
solely on the basis of the achievement of certain operating
results (APerformance Based Options@ and APerformance
Based Option Shares@). In the event that Employee=s
employment is Terminated for Cause, the vesting of
Performance Based Options relating to the Bonus Period in
which Termination for Cause occurs, shall be accelerated. The
number of Performance Based Option Shares which Employee
shall be entitled to purchase shall be prorated on the basis of
the percentage of the Bonus Period which has been completed
as of the date of Termination for Cause. The Performance
Based Option Shares which may be purchased under this
paragraph 2.3(g) will not be determinable until the completion
of the Employer=s consolidated audited financial statements for
the Bonus Period in which Employee is Terminated for Cause.
An example of this provision is as follows:
If, under the Stock Option Agreement, Employee
would have been entitled to purchase 116,666
Performance Based Option Shares had he worked for
the entire Bonus Period, and if Employee=s
employment was Terminated for Cause immediately
after sixty percent (60%) of the Bonus Period had been
completed, then Employee shall be entitled to purchase,
under the Stock Option Agreement, 70,000 of the
Performance Based Option Shares attributed to such
Bonus Period). Employee shall not be entitled to
purchase any Performance Based Option Shares which
underlie Performance Based Options for Bonus Periods
which are subsequent to the Bonus Period in which
Termination for Cause occurred.
2.4. Termination Without Cause. Employer may terminate
Employee=s employment for any reason and without cause at any time
upon thirty (30) days written notice to Employee.
Upon Termination without Cause, the following shall promptly
occur:
(a) Employer shall pay Employee all salary
compensation for a period of one year from the date of
Termination Without Cause.
(b) Employer shall pay Employee all vacation pay
which is accrued at the date of Termination without Cause;
(c) Employer shall pay all business expenses
incurred by Employee in the connection with his duties
hereunder which are unpaid at the date of Termination without
Cause;
(d) Employer shall pay or deliver to Employee all
compensation or benefits due to Employee at the date of
Termination without Cause under any agreement or plans
excluding stock options or cash bonuses which are specifically
provided for in paragraphs 2.4 (e)(f)and (g) below;
(e) The compensation payable to Employee under
paragraph 4.1.2. hereunder is calculated on the basis of June
30 fiscal year end results and any bonus payable thereunder
will be payable in six Bonus Periods which are described in
paragraph 4.1.2. If Employee is Terminated without Cause, the
amount of bonus due to Employee under paragraph 4.1.2 shall
be the amount of bonus compensation which would be due to
Employee if Employee had been employed for the entire Bonus
Period in which Termination without Cause occurred. The
bonus compensation due to Employee under this paragraph
2.4(e) will not be determinable until the completion of the
Employer=s consolidated audited financial statements for the
Bonus Period in which Employee is Terminated without Cause.
The bonus compensation will be paid to Employee within
twenty (20) days from the date such audited financial
statements are available. An example of this provision is as
follows:
If, under paragraph 4.1.2 of this Agreement, the
Employee would have been entitled to bonus
compensation of $50,000 if Employee had worked for
the entire Bonus Period, and if Employee=s
employment was Terminated without Cause
immediately after sixty percent (60%) of the Bonus
Period had been completed, then Employee shall be
entitled to the entire bonus of $50,000.
(f) Employee has been granted incentive stock
options to purchase 150,000 Time Based Option Shares which
vest solely on the basis of time of employment. In the event
the Employee is Terminated without Cause, all Time Based
Options for the vesting period in which Termination without
Cause occurred, shall be accelerated and shall vest
immediately. An example of this provision, is as follows:
In the event Employee has a Time Based Option
to purchase 75,000 shares of Employers common
stock which vests on the first anniversary date of this
Agreement, and if Employee is Terminated without
Cause nine months after the date of this Employment
Agreement, then Employee shall have the right to
purchase all 75,000 shares of Employer=s common
stock immediately after the date of Termination without
Cause pursuant to the applicable terms and conditions
of the stock option agreement. Employee shall have no
right to purchase Time Based Option Shares for any
vesting period which is subsequent to the vesting
period in which Termination without Cause occurred.
(g) Employee has been granted incentive stock
options to purchase 350,000 shares of Celtic Common Stock
pursuant to the Stock Option Agreement which vest solely on
the basis of the achievement of certain operating results. In
the event that Employee=s employment is Terminated without
Cause, the vesting of such Performance Based Options shall be
accelerated and the number of Performance Based Option
shares which Employee is entitled to purchase shall be that
number of Performance Based Option Shares which Employee
would have been entitled to purchase if he had been employed
during the entire Bonus Period. The Performance Based Option
Shares which may be purchased under this paragraph 2.4(g)
will not be determinable until the completion of the Employer=s
consolidated audited financial statements for the Bonus Period
in which Employee is Terminated without Cause. An example
of this provision is as follows:
If, under the Stock Option Agreement, Employee
would have been entitled to purchase 150,000
Performance Based Option Shares had he worked for
the entire Bonus Period, and if Employee=s
employment was Terminated without Cause
immediately after sixty percent (60%) of the Bonus
Period had been completed, then Employee shall be
entitled to purchase, under the Stock Option Agreement,
all 150,000 Performance Based Option Shares
attributed to such Bonus Period. Employee shall not be
entitled to purchase any Performance Based Option
Shares which underlie Performance Based Options for
Bonus Periods which are subsequent to the Bonus
Period in which Termination without Cause occurred.
2.5. Termination by Reason of Disability. If, during the term
of this Agreement, Employee, in the reasonable judgment of the Board
of Directors of either SLM or Parent, has failed to perform his duties
under this Agreement on account of illness or physical or mental
incapacity, and such illness or incapacity continues for a period of
more than three (3) consecutive months, Employer shall have the right
to terminate Employee's employment hereunder by twenty (20) days
written notification to Employee. In the event of termination by reason
of disability, Employee shall pay Employee all cash and other
compensation which would be due and owing to Employee under
paragraph 2.3 of this Employment Agreement if Employee=s
employment had been Terminated for Cause by Employer rather than
as a result of the Disability of Employee.
Upon receipt of notice of termination under this paragraph 2.5,
Employee may request an opportunity to discuss the termination of his
employment at a meeting of the Boards of Directors of both SLM and
Parent. Such request must be made, if at all, in writing and shall be
delivered to SLM and to Parent withing five (5) days from the date
Employee receives notification of termination of employment under this
paragraph 2.5. Upon receipt of such request, each of SLM and Parent
shall, within a reasonable time, call and hold a Board of Directors
meeting to allow Employee to discuss termination for reason of
disability.
2.6 . Death. In the event of Employee's death during the
term of this Agreement, Employee's employment shall be deemed to
have terminated as of the last day of the month during which his death
occurs and the Employer shall pay to his estate or such beneficiaries
as Employee may from time to time designate, to the date of
Employee=s death all cash and other compensation which would be
due and owing to Employee under paragraph 2.3 of this Employment
Agreement if Employee=s employment had been Terminated for Cause
by Employer rather than by as a result of the Death of Employee.
2.7. Voluntary Termination. In the event of a Voluntary
Termination, Employer shall pay to Employee all cash and other
compensation which would be due and owing to Employee under
paragraph 2.3 of this Employment Agreement if Employee=s
employment had been Terminated for Cause by Employer rather than
by the Voluntary Termination by Employee.
2.8. Good Reason Resignation. In the event of a Good
Reason Resignation Employee resigns, Employer shall continue to pay
to Employee his salary for a period of one (1) year from the date of
Resignation for Good Reason and Employer shall pay to Employee all
cash and other compensation which would be due and owing to
Employee under paragraph 2.4 of this Employment Agreement if
Employee=s employment had been Terminated without Cause by
Employer rather than the Good Reason Resignation by Employee.
3. Effective Date of Employment. The Effective Date of
this Agreement and Employee's employment by the Employer hereunder
shall be January 31, 1997.
4. Compensation. As his entire compensation for all
services rendered to the Employer during the term of this Agreement,
in whatever capacity rendered, the Employee shall be paid, subject to
withholding and other applicable employment taxes, as follows;
4.1.1.Base Salary. Employee shall be paid a base
salary of $90,000 per year commencing on the Effective Date.
Such base salary shall be payable in monthly installments,
provided however, if the first month of employment is less than
a full calendar month, the first payment shall be prorated for
the number of days worked in the first calendar month of
employment.
Employee=s base salary shall be reviewed annually by
the Board of Directors, and the base salary for each
employment year (or portion thereof) beginning July 1, 1998,
shall be determined by the Board of Directors which shall
authorize an increase in Employee=s base salary for such year
in an amount which, at a minimum, shall be equal to the
cumulative cost-of-living increment on the Base Salary as
reported in the AConsumer Price Index, Salt Lake City, UT, All
Items,@ published by the U.S. Department of Labor (using
January 1, 1995 as the base date for computation). Provided
however, that the base salary shall not increase by more than
ten percent (10%) per year due to increases in the Consumer
Price Index.
4.1.2. Bonus. Employee shall be paid a bonus based
upon Adjusted Pretax Profits of SLM. Under this Employment
Agreement, there shall be six Bonus Periods during which the
bonus shall be determined and such Bonus Periods are as
follows:
Bonus Period 1 - commencing January 31, 1997,
ending June 30, 1997
Bonus Period 2 - commencing July 1, 1997, ending
June 30, 1998
Bonus Period 3 - commencing July 1, 1998, ending
June 30, 1999
Bonus Period 4 - commencing July 1, 1999, ending
June 30, 2000
Bonus Period 5 - commencing July 1, 2000 ending
June 30, 2001
Bonus Period 6 - commencing July 1, 2001 ending
January 31, 2002
For Bonus Period 1 Employee shall be paid a bonus
equal to seven percent (7%) of the Adjusted Pretax Profits up
to a bonus payment of $30,000.00 After a total bonus of
$30,000.00 is earned for Bonus Period 1, the bonus shall be
reduced from seven percent (7%) of Adjusted Pretax Profits to
one and one half percent (1 2%) of Adjusted Pretax Profits.
For each of the Bonus Periods 2,3, 4 and 5 (AFull
Bonus Periods@), Employee shall be paid a bonus equal to
seven percent (7%) of the Adjusted Pretax Profits up to a
bonus payment of $60,000. After a total bonus of $60,000 is
earned for each of such Bonus Periods, the bonus shall be
reduced from seven percent (7%) to one and one half percent
(1 2%) of Adjusted Pretax profits.
For Bonus Period 6, Employee shall be paid a bonus
equal to seven percent (7%) of the Adjusted Pretax Profits up
to a bonus payment of $30,000.00. After a total bonus of
$30,000.00 is earned for Bonus Period 6, the bonus shall be
reduced from seven percent (7%) to one and one half percent
(1 2%) of Adjusted Pretax Profits.
Any bonus due hereunder shall be paid to Employee
within twenty (20) days after the date on which the audited
financial statements of Employer are available for each June
30th fiscal year end.
4.1.3.Vacation. Employee shall be entitled to four (4)
weeks of vacation during each year during the term of this
Agreement and any extensions thereof, prorated for partial
years.
4.1.4.Automobile Allowance. SLM currently provides
Employee with an automobile. During the term of this
Agreement, Employer shall continue to provide such automobile
(or an equivalent replacement thereof) for Employee=s use and
Employer shall pay the first $2,500 of the operating costs of
such automobile. For purposes of this paragraph 4.1.4,
operating costs, shall include, but are not limited to, fuel, oil,
normal service, repairs, tires and insurance. At any time upon
the request of Employee, or in connection with a termination of
his employment for any reason, this automobile shall be
transferred to Employee for no consideration. In such event,
Employee shall be responsible for any and all taxes, (income,
property, or sales taxes) thereafter and for all such taxes
arising as a result of such transfer.
4.1.5.Reimbursement for Expenses. During the term
of this Agreement, The Employer shall reimburse Employee for
reasonable and properly documented out-of-pocket business
and/or entertainment expenses incurred by Employee in
connection with his duties under this Agreement.
4.1.6.Additional Benefits. The Employer shall provide
the Employee with health and disability insurance during the
term of this Agreement. The Employee shall be entitled to
participate in such benefit and compensation plans as are now
generally available or later made generally available to the
employees or executive officers of the Employer, including, but
not limited to, 401(k) plans, stock option plans, profit sharing
plans and other such plans and benefits. The health plan
offered to Employee hereunder will be at least as advantageous
to Employee as those offered by SLM prior to the date of the
execution of this Agreement.
5. Stock Options. As additional consideration for
Employee's services hereunder, the Employee shall be granted an
option to purchase 500,000 shares of Celtic Investment common stock
at a price of $3.00 per share. The terms and condition of such options
are set forth in the Stock Option Agreement.
6. Covenant not to Compete. Employee agrees that he will
not, during the term of his employment, and for the (ARestriction
Period@) which is defined in paragraph 6.1.2 of this Employment
Agreement directly or indirectly, in any state, county, city or
metropolitan area in which SLM, Parent or any subsidiary of Parent has
transacted business in the three (3) years preceding said termination,
own, manage, operate or control, or participate in the ownership,
management, operation or control of, or be connected with or have any
interest in, as a stockholder, director, officer, employee, agent,
consultant, partner or otherwise, any business which is engaged in the
same business as SLM, Parent or any Subsidiary of Parent.
Specifically, but without limitation, this covenant shall extend to all
existing clients or customers of SLM, Parent and all subsidiaries of
Parent and all of the funding sources of SLM, Parent and all
subsidiaries of Parent.
6.1.1.If any of the provisions of this paragraph are
held to be unenforceable because of the scope, duration or area of its
applicability, the court making such determination shall have the power
to modify such scope, duration or area or all of them, and such
provision shall then be applicable in such modified form. The Employer
and the Employee acknowledge the reasonableness of this covenant
not to compete and the reasonableness of the geographic area and
duration of time which are part of this covenant.
6.1.2. The Restricted Period shall be that period of
time during which the Covenant not to Compete set forth in this
paragraph 6 is binding upon Employee. The Restricted Period shall
initially be a period of twenty four (24) months commencing on the
Effective Date but shall be reduced thereafter by one month for each
full month of employment of Employee by Employer. Subject to
paragraph 6.1.3 below, in no event shall the Restricted Period be less
than six (6) months from the date of termination of employment
regardless of the number of months of employment prior to
termination.
0.0.0.Xx the event Employee=s employment is
terminated by Employer without cause or in the event Employee
Resigns for Good Reason, the restrictions set forth in this paragraph
6 shall be limited to the time in which Employee continues to receive
a salary from Employer under this Agreement.
6.1.4.Notwithstanding anything else contained herein
to the contrary, following the termination of employment under this
Employment Agreement, Employee shall be entitled to engage in land
development, real estate acquisitions and in the ownership, purchase
and sale of real estate contracts, mortgage notes and trust deed notes
for his own account to the extent that such activities have been pre-
approved by the SLM Board of Directors.
7. Confidential Information. Employee covenants and agrees
not to disclose, directly or indirectly, at any time either during
employment or within twenty four (24) months subsequent to the
termination of employment to anyone not an employee or consultant of
the Employer, and not to use at any time either during employment or
within two (2) years subsequent to the termination of employment,
except in the course of employment with the Employer, any Confidential
Information, as defined below, of the Employer or any parties dealing
with the Employer unless he shall first secure the consent of the
Employer in writing or unless he shall involuntarily be required to do so
by a court having competent jurisdiction, by any governmental agency
having supervisory authority over the business of Employer or Parent,
or by any administrative body or legislative body (including a
committee thereof) with purported or apparent jurisdiction to order
Employee to divulge, disclose or make accessible such information
after notice to the Employer. Employer and Employee hereby
acknowledge that: (a) the duration and geographical limitations imposed
with respect to said secret and confidential information are reasonable;
and (b) the restrictions stated hereinabove are reasonably necessary for
the protection of Employer's legitimate proprietary interests.
For purposes of this Agreement, the term Confidential
Information shall mean any and all:
(a) trade secrets concerning the business and affairs of
Employer, data, know-how, customer lists, current and
anticipated customer requirements, market studies, business
plans, and any other information, however documented, that is
a trade secret within the meaning of the Utah Trade Secrets
Act ' ' 13-24-1 to 13-24-9; and
(b) information concerning the business and affairs of
the Employer (which includes historical financial statements,
financial projections and budgets, historical and projected sales,
capital spending budgets and plans, the names and
backgrounds of key personnel, personnel training and
techniques and materials however documented; and
(c) notes, analysis, compilations, studies, summaries,
and other material prepared by or for Employer containing or
based, in whole or in part, on any information included in the
foregoing.
Nothing contained in this paragraph 7 shall be deemed to
apply to (i) any information which is or becomes known to the public
other than as a result of a breach of this Section 7 by Employee or (ii
) any information which is lawfully acquired from a third party who is
not obligated to Employer to maintain such information in confidence.
8. Solicitation of Other Employees and/or Consultants.
Employee agrees that he will not, during the course of his employment
or for a period of twenty four (24) months commencing upon the
expiration of his employment, either voluntary or involuntary, for any
reason whatsoever, directly or indirectly, individually or on behalf of
persons not now parties to this agreement, aid or endeavor to solicit
or induce any other employee, employees, consultant and/or
consultants of the Employer to leave their employment with the
Employer in order to accept employment of any kind with any other
person, firm, partnership or the Employer.
9. Breach of Covenants by Employee. In the event that the
Employee shall breach paragraphs 6,7 or 8 of this agreement, then the
Employer shall be entitled to seek injunctive relief against the Employee.
In any proceeding commenced by Employer to enforce paragraphs 6,7
or 8 of this Employment Agreement, the prevailing party shall be liable
and shall pay for all damages, court costs, and reasonable attorneys'
fees incurred as the direct result of commencing or defending such
proceeding. The provisions of paragraphs 6, 7 and 8 hereof shall
survive the termination of this Employment Agreement.
10. Separate Counsel. The parties acknowledge that the
Employer and the Employee have been represented by separate legal
counsel in this transaction and that Employee has not been represented
by the Employer=s counsel.
11. Miscellaneous.
11.1 This Employment Agreement and the written agreements
referred to herein, constitutes the entire agreement between the parties
or the matters discussed herein. It also supersedes any and all other
agreements or contracts, either oral or written, between the parties with
respect to the subject matter hereof.
11.2. The terms and conditions of this Employment
Agreement may be amended at any time by mutual agreement of the
parties, provided that before any amendment shall be valid or effective
it shall have been approved by the Board of Directors of the Employer,
reduced to writing and signed by the Employer and the Employee.
11.3. The invalidity or unenforceability of any particular
provision of this Employment Agreement shall not affect its other
provisions, and this Employment Agreement shall be construed in all
respects as if such invalid or unenforceable provision had been
omitted.
11.4. Except as otherwise expressly provided herein, this
Employment Agreement shall be binding upon and inure to the benefit
of the Employer, its successors and assigns, and upon the Employee,
his administrators, executors, legatees, heirs and assigns.
11.5. This Employment Agreement shall be construed and
enforced under and in accordance with the laws of the State of Utah.
IN WITNESS WHEREOF, the parties have executed this
Employment Agreement the day and year first above-written.
Salt Lake Mortgage Corp. Employee:
By Xxxxx X. Xxxxx By /s/ Xxxxx X. Xxxxxx, Xx.
Xxxxx X. Xxxxx Xxxxx X. Xxxxxx, Xx.
Celtic Investment, Inc.
By /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, President
