EMPLOYMENT AGREEMENT
This
Agreement is made,
effective as of September 10, 2007, by and between Park City Group
Inc., a corporation organized and existing under the laws of the State of
Nevada, with its principal office located at 0000 Xxxxxxxxx Xx., Xxxx
Xxxx, Xxxx 00000, referred to in this agreement as Employer or
PCG, and Xxxx X. Xxxxxxx of Park City, UT, referred to in this Agreement as
Employee.
RECITALS
A.
Employer is engaged in the business of Software Development and Business
Consulting.
B.
Employee has been engaged in and is experienced in the above-designated type
of
business.
C.
Employee is willing to be employed by Employer, and Employer is willing to
employ Employee, on the terms, covenants, and conditions set forth in this
Agreement.
In
consideration of the matters described above, and of the mutual benefits and
obligations set forth in this Agreement, the parties agree as
follows:
SECTION
ONE.
EMPLOYMENT
A.
Employer employs, engages, and promotes Employee to be a Chief Financial
Officer, Treasurer, and Principal Accounting Officer primarily responsible
for
financial operations, reporting, budgeting, forecasting, treasury, business
strategy and maintaining internal controls at Park City Group. Employee accepts
and agrees to such hiring, engagement, and employment, subject to the general
supervision and pursuant to the orders, advice, and direction of
Employer.
B.
Employee shall perform such duties as are customarily performed by one holding
such position in other, same, or similar businesses or enterprises as that
engaged in by Employer.
SECTION
TWO.
BEST
EFFORTS OF EMPLOYEE
Employee
agrees that he will at all times faithfully, industriously, and to
the best of his ability, experience, and talents, perform all of
the duties that may be required of and from him pursuant to the express and
implicit terms of this agreement, to the reasonable satisfaction of
Employer.
SECTION
THREE.
TERM
OF EMPLOYMENT
The
term
of this agreement shall be a period of two years, commencing September 10,
2007
and terminating September 9, 2009 subject, however, to any continuing rights
and
benefits as set forth herein and to prior termination of Employee’s employment
as provided in this Agreement.
SECTION
FOUR.
SALARY
COMPENSATION OF EMPLOYEE
|
1)
|
Employer
shall pay Employee, and
Employee shall accept from Employer, for Employee’s services under this
agreement, a base salary in the amount of One Hundred and Sixty Five
Thousand Dollars ($165,000) per year,
payable twice a month on the
15th
and last day of each month
while this Agreement shall be in
force.
|
|
2)
|
Employer
shall promptly reimburse
Employee for all reasonable and necessary expenses incurred by Employee
during the course and scope of this
Agreement.
|
1
|
3)
|
Notwithstanding
the foregoing, Employee understands and agrees that Employer may,
in the
future, ask some or all of its employees to take a temporary reduction
in
their salaried pay. Employee agrees to participate in such a temporary
reduction of Employee’s salary to the extent that all other employees
employed by PCG at a Director level or above likewise participate
in such
reduction, and subject to the following additional terms: (i) the
temporary reduction term shall not be greater than (2) months, and;
(ii)
equal dollar compensation will be awarded to the Employee in PCG
stock,
equal to the amount of the temporary reduction in current annual
compensation of Employee during the period of such reduction; (iii)
the
amount of the reduction shall be no more than the minimum amount
necessary, but in no event more than Sixty Five Thousand Dollars
($65,000)
of Employee’s then base salary; and (iv) Employee shall be entitled to
equal dollar compensation in the form of PCG stock at the stock’s fair
market value as of the end date of each payroll period in which Employee’s
salary is reduced. Employer shall take all steps necessary to reflect
such
stock award and Employee shall be provided with share certificates
for
such PCG stock upon request.
|
|
4)
|
The
provisions of Section 3
regarding temporary reduction in salary shall no longer apply in
the event
of any “Change in Control”, as that term is defined
below.
|
|
5)
|
Salary
increases will be
considered annually by the Board of Directors and if approved shall
be put
into effect consistent with the Employer’s salary review
policy.
|
SECTION
FIVE.
EFFECT
OF CHANGE IN CONTROL
1)
For
the purpose of this Agreement and this Section 5, a “Change of Control,” of
Employer shall be defined as follows:
A
“Change
of Control” shall be deemed to have occurred if at any time or from time to time
after the date of this Agreement: (1) any person or group is or becomes the
beneficial owner directly or indirectly, of securities of the Company
representing more than (50%) of the combined voting power of the Company’s then
outstanding securities; or (2) the stockholders of the Company approve a merger
or consolidation of the Company with any other corporation, other than a merger
or consolidation which would result in their retention of voting securities
of
the Company continuing to represent more than fifty percent (50%) of the
combined voting power of the voting securities of the Company or such surviving
entity; or (3) the stockholders of the Company approve a plan of complete
liquidation of the company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets; or (4) the Company
is otherwise dissolved or liquidated; or (5) any transaction or series of
transactions has the substantial effect of any one or more of the foregoing
items (1)-(4).
2)
It is
the intent of the parties that this Agreement shall remain in force following
a
Change in Control through the balance of the Term of this Agreement. If, upon
a
Change of Control, Employee is terminated or Employee’s salary of at least
$165,000 per annum or other benefits set forth in this Agreement are reduced
and
Employee then chooses to resign, Employee shall be entitled to all “Severance
Benefits” as that term is defined in Section Fourteen, “Termination”, below.
This provision shall survive termination of this Agreement.
SECTION
SIX.
OTHER
EMPLOYMENT
Employee
shall devote all of his knowledge and skills solely to the
business and interest of Employer, and Employer shall be entitled to all of
the
benefits, profits, or other issues arising from or incident to all work,
services, and advice of Employee, and Employee shall not, during the term of
this agreement, be interested directly or indirectly, in any manner, as partner,
officer, director, shareholder, advisor, employee, or in any other capacity
in
any other business similar to Employer’s business or any allied trade; provided,
however, that nothing contained in this section shall be deemed to prevent
or to
limit the right of Employee to invest any of his money in the
capital stock or other securities of any corporation whose stock or securities
are publicly owned or are regularly traded on any public exchange, nor shall
anything contained in this section be deemed to prevent Employee from investing
or limit Employee’s right to invest his money in real
estate.
2
SECTION
SEVEN.
RECOMMENDATIONS
FOR IMPROVING OPERATIONS
Employee
shall make available to Employer information of which Employee shall have any
relevant knowledge and shall make suggestions and recommendations that will
be
of mutual benefit to Employer and Employee.
SECTION
EIGHT.
TRADE
SECRETS
1)
Employee shall not at any time or in any manner, either directly or indirectly,
other than in the course of completing his normal business activity, divulge,
disclose or communicate to any person, firm, corporation, or other entity in
any
manner whatsoever any non-public information concerning any matters affecting
or
relating to the business of Employer, including but not limited to any of its
customers, the prices it obtains or has obtained from the sale of, or at which
it sells or has sold, its products, or any other information concerning the
business of Employer, its manner of operation, its plans, processes, or other
data without regard to whether all of the above-stated matters will be deemed
confidential, material, or important, Employer and Employee specifically and
expressly stipulating that as between them, such matters are important,
material, and confidential and gravely affect the effective and successful
conduct of the business of Employer, and Employer’s good will, and that any
breach of the terms of this section shall be a material breach of this
Agreement.
2)
All of
the terms of Section Eight of this Agreement shall remain in full force and
effect for a period of one year after the termination of Employee’s employment
for any reason.
SECTION
NINE
NON-DISPARAGEMENT
Employee
agrees to take no action that might interfere with Employer’s activities or
damage Employer’s reputation. Prohibited actions would include, but are not
limited to, private or public comments, statements, or writings critical of
Employer. Employer agrees to take no action that might interfere with Employee’s
activities or damage Employee’s reputation. Prohibited actions would include,
but are not limited to, private or public comments, statements, or writings
critical of Employee.
SECTION
TEN.
ADDITIONAL
COMPENSATION
1)
Share
Grants Upon Employee Purchase of Shares
Employee
shall further receive grants for two (2) additional shares of stock for each
share of stock that is purchased by Employee and paid for in cash
during
each calendar year in which Employee is employed under this Agreement, provided,
however, that Employee may only purchase up to a maximum of 50,000 shares
subject to such additional grants in each calendar year during the term of
employment.
SECTION
ELEVEN
EMPLOYEE
BENEFITS
Employee
shall participate in the health care plan that is provided to other employees
with the addition that Employer shall pay the costs of an annual physical
examination for Employee. Such examination shall be at the discretion of
Employee.
Employee
shall be eligible to participate and enroll in the company health plan, HRA,
401k plan, and any and all benefit programs offered by Employer subject to
the
terms and conditions of the particular plan entry limitations.
SECTION
TWELVE.
VACATION
Employee
shall be entitled to (4) four weeks of paid vacation each year during the term
of this agreement, the time for such vacation to be determined by mutual
agreement between employer and Employee. In keeping with Employer’s policy there
shall be no carry over from year to year of any unused vacation. Upon
termination of employment, Employee shall be entitled to payment of any accrued
but unused vacation for the then current year.
3
SECTION
THIRTEEN.
MODIFICATION
OF AGREEMENT
Any
modification of this agreement or additional obligation assumed by either party
in connection with this agreement shall be binding only if evidenced in writing
and signed by each party or an authorized representative of each
party.
SECTION
FOURTEEN.
TERMINATION
A.
Employee’s employment under this Agreement may be terminated by either party on
thirty (30) days written notice to the other. If Employer shall so terminate
this Agreement, Employee shall be paid a) severance pay equivalent to (90)
ninety days of his base salary then in effect (but in no event less than
$41,250, payable in cash); b) all bonuses and stock grants earned through the
date of termination at the rate then in effect; and c) compensation for any
accrued vacation up to the date of termination (collectively “the Severance
Benefits”). The Severance Benefits shall be paid pro-rata on a twice monthly
basis through the (90) ninety day period following the termination (“the
Severance Period”). Employee shall also continue to be paid all share grants as
set forth in Section Ten, below, in accordance with the terms of that
Subsection. Employee shall further receive all benefits (medical, dental,
vision, life insurance) through the Severance Period of this Employment
Agreement. This provision shall survive termination of this
Agreement
SECTION
FIFTEEN.
EFFECT
OF PARTIAL INVALIDITY
If
any
provision of this Agreement is held by a court of competent jurisdiction to
be
invalid, void or unenforceable, the remaining provisions shall nevertheless
continue in full force without being invalid or invalidated in any way, to
the
maximum extent allowed by law.
SECTION
SIXTEEN.
CHOICE
OF LAW
It
is the
intention of the parties to this Agreement that this Agreement and the
performance under this agreement, and all suits and special proceedings under
this agreement, be construed in accordance with and under and pursuant to the
laws of the State of Utah and that, in any action, special proceeding or other
proceeding that may be brought arising out of, in connection with, or by reason
of this agreement, the laws of the State of Utah shall be applicable and shall
govern to the exclusion of the law of any other forum, without regard to the
jurisdiction in which any action or special proceeding may be
instituted.
SECTION
SEVENTEEN.
NO
WAIVER
The
failure of either party to this agreement to insist upon the performance of
any
of the terms and conditions of this Agreement, or the waiver of any breach
of
any of the terms and conditions of this Agreement, shall not be construed as
thereafter waiving any such terms and conditions, but the same shall continue
and remain in full force and effect as if no such forbearance or waiver had
occurred.
SECTION
EIGHTEEN.
ATTORNEY
FEES
In
the
event that any action or proceeding is filed arising out of or in relation
to
this Agreement, the prevailing party shall be entitled to its costs and
reasonable attorney’s fees.
4
SECTION
NINETEEN.
PARAGRAPH
HEADINGS
The
titles to the paragraphs of this Agreement are solely for the convenience of
the
parties and shall not be used to explain, modify, simplify, or aid in the
interpretation of the provisions of this agreement.
SECTION
TWENTY
INDEMNIFICATION
Employer
shall defend and indemnify Employee for actions taken in his position as an
officer, director, employee and agent of Employer to the greatest extent
permitted by law. Employer shall also defend, indemnify and hold Employee
harmless from any and all pending, threatened or completed actions, suits,
or
proceedings in which Employer, any of its employees, officers, or directors
is a
party or threatened to be made a party by virtue of any act or omission which
arose prior to the date of Employee’s termination of employment and cessation of
service on the Company’s Board of Directors. Employer agrees to maintain
officers and directors liability coverage in an amount not less than
$1,200,000.00.
SECTION
TWENTY ONE
AGREEMENTS
OUTSIDE OF CONTRACT
This
agreement contains the complete agreement concerning the employment arrangement
between the parties and shall, as of the effective date of this agreement,
supersede all other agreements between the parties. It shall bind and enure
to
the benefit of each party’s heirs, successors and assigns. The parties stipulate
that neither of them has made any representation with respect to the subject
matter of this agreement or any representations including the execution and
delivery of this agreement except such representations as are specifically
set
forth in this agreement, and each of the parties acknowledges that each party
has relied on its own judgment in entering into this agreement. The parties
further acknowledge that any payments or representations that may have been
made
by either of them to the other prior to the date of executing this agreement
are
of no effect and that neither of them has relied on such payments or
representations in connection with their dealings with the other.
In
witness of the above, each party to this Agreement has caused it to be executed
as of the date set forth above.
EMPLOYEE
|
PARK
CITY GROUP, INC.
|
|
By:
____________________
|
Xxxx
X.
Xxxxxxx
its___________________________
|
5