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Exhibit 10.6
Employment Agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇.▇▇▇ INTERNATIONAL, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of this
1st day of October, 1999, by and between ▇▇▇▇▇▇▇▇▇▇.▇▇▇ International, Inc., a
Delaware corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a resident of the
State of Utah (the "Employee"), collectively referred to hereinafter as the
"Parties" or individually as a "Party."
In consideration of the foregoing and of the promises and mutual
covenants contained herein, the Parties hereto agree as follows:
1. Employment; Location
The Company hereby employs Employee and Employee hereby accepts such
employment in Salt Lake and Summit Counties, State of Utah, or in such other
location or locations as may be mutually agreed between the Parties.
2. Term
Employee's employment hereunder has no specified term or length and,
Subject to Section 6 below, either the Company or Employee can terminate the
employment at any time, with or without Cause (as defined herein) and with or
without prior notice.
3. Duties
Employee's employment hereunder shall be in the capacity of the
President of the Company's network marketing operations. Employee hereby agrees
to faithfully execute, to the best of his ability, such duties in connection
with such office and to otherwise devote his full time, skills, and best efforts
to such duties. Employee shall perform such duties subject to the general
supervision and control of the Company's Chief Executive Officer and Board of
Directors. Employee agrees that during the period of his employment, he shall
not carry on outside work of any nature (including, without limitation,
charitable work, civic activities, consulting work, or directorships) that is
reasonably determined by the Board of Directors to substantially interfere with
Employee's duties and responsibilities hereunder.
4. Compensation and Benefits
During the Employment Term, 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 a base salary equal to One
Hundred Fifty Five Thousand ($155,000) per year ("Base Salary") plus such annual
additional compensation or performance bonus as may be determined by the Chief
Executive Officer at the end of each fiscal year. Such compensation shall be
paid to Employee in accordance with the Company's payroll practices in effect
from time to time during the Employment Term.
4.2 Grant of Option. Effective August 24, 1999 (the "Grant Date"), the
Company hereby grants to Employee an option ("Option") to acquire 986,250 shares
of its common stock at an exercise price
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of $2.53 per share. Effective with the commencement of the Employment Term, the
Option shall vest immediately with respect to 493,125 shares. The remainder of
the Option shall vest in two (2) successive annual installments of 246,562 and
246,563 shares, respectively, with the first installment vesting one (1) year
from the date of this Agreement. Notwithstanding the foregoing, if Employee's
employment is terminated by the Company without Cause (as defined below), the
Option shall immediately vest and become exercisable with respect to all shares
of Common Stock subject to the Option, including any and all options granted by
the Company or any of its subsidiaries in connection with Employee's employment.
The Option or any portion thereof shall expire if not exercised within five (5)
years from the date hereof. The Option shall be governed by and shall be subject
to the provisions of the Company's 1999 Stock Option Plan. The Company shall
prepare and deliver to Employee a separate grant of the Option in accordance
with the Plan in the form attached hereto as Exhibit "A."
4.3 Vehicle Allowance. The Company shall reimburse Employee for up to
$500 per month for expenses incurred from the operation and maintenance of a
vehicle to be used in connection with Employee's duties herein. Employee hereby
agrees to provide such evidence of expenses as may reasonably be required by the
Company.
4.4 Additional Benefits. Employee shall be eligible to participate in
the Company's employee benefit plans for employees, including any such benefits
made available to similarly situated executives of the Company, if and when any
such plans may be adopted. Such benefit plans may include, without limitation,
the following: 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. During the Employment Term,
Employee shall be entitled to vacation and sick leave at full pay for a minimum
of the (3) weeks per year, or such other period as established by the Board of
Directors, in addition to the usual and customary holidays as established by
Company from time to time.
4.6 Deductions. During the Employment Term, the Company shall have the
right to deduct from Employee's Base Salary and other 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 any such amounts paid to
Employee.
5. Business Expenses
The Company shall promptly reimburse Employee for all reasonable
out-of-pocket business expenses incurred in fulfilling Employee's 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.
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6. Termination
6.1 Generally. During the Employment Term, either the Company or
Employee may terminate Employee's employment with the Company hereunder at any
time, without or without Cause or Good Reason, in its or his sole discretion,
upon thirty (30) days prior written notice. Without limiting the foregoing,
Employee may immediately terminate his employment with the Company at any time
for Good Reason, and the Company may immediately terminate Employee's employment
for Cause. 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 this Section 6 and in Sections 7-18 below. For purposes of this
Agreement:
(a) "Cause" shall mean (i) Employee's material breach of any of
the terms, covenants, representations, or warranties contained in this
Agreement which continues following not less than two (2) weeks written
notice from the Company of such breach; (ii) the Executive being guilty
of willful misconduct on the Company's premises or elsewhere, whether
during the performance of his duties or not, which materially and
negatively affects the business or reputation of the Company; (iii)
Employee's being found guilty or entering a plea of guilty or nolo
contendre in a criminal court of a felony; or (iv) Employee's willful
breach of duty or habitual neglect of duty, or refusal to comply with
any reasonable or proper direction given by on behalf of the President,
Chief Executive Officer, or Board of Directors.
(b) "Good Reason" shall mean the termination of employment by
Employee as a result of (i) a material breach of this Agreement by the
Company, or (ii) a relocation of Employee outside Utah, Salt Lake, and
Summit Counties.
(c) "Termination Date" shall mean (i) if this Agreement is
terminated on account of death, the date of death; (ii) if this
Agreement is terminated for Disability (as defined below), the date on
which a notice of termination due to Disability is delivered to the
Employee (or such later date as may be set forth in such notice); (iii)
if this Agreement is terminated by the Company, the date on which a
notice of termination is delivered to the Employee (or such later date
as may be set forth in such notice); (iv) if the Agreement is terminated
by the Employee, the earlier of (x) the date on which the Employee
delivers the notice of termination (or such later date as may be set
forth in such notice) to the Company and (y) the date he ceases work; or
(v) if this Agreement expires by its terms, on the last day of the term
of this Agreement.
(d) "Disability" shall mean the Employee is unable to perform
the essential functions of his job and render services of the character
previously performed in the ordinary course and that such inability
continues for a period of at least three (3) consecutive months (or for
shorter periods totaling more than four (4) months during any period of
twelve (12) consecutive months).
6.2 Severance Pay.
(a) If (i) the Company terminates the employment of the Employee
without Cause, or (ii) the Employee terminates his employment for Good
Reason, the Employee shall be entitled to receive Base Salary until six
(6) months following the Termination Date, or until such time as the
Employee has obtained new employment at an annual salary equal to or
greater than ninety percent (90%) of Employee's Base Salary hereunder,
whichever comes first (such payment after the Termination Date is
referred to as "Severance Pay"). During this time, the Employee agrees
to make a good faith effort to find new employment. The Severance Pay
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outlined above shall be paid in accordance with the Company's regular
payroll schedule in effect at the time that Severance Pay is due.
(b) If (i) the Employee voluntarily terminates his employment
other than for Good Reason, or (ii) the Employee is terminated by the
Company for Cause, then the Employee shall be entitled to receive Base
Salary (excluding any accrued vacation) through the Termination Date
only, and no other compensation shall be payable.
(c) If the Employee's employment is terminated due to death or
Disability, the Employee shall be entitled to receive Base Salary and
accrued vacation through the Termination Date only, and no other
compensation shall be payable.
(d) In addition to the provisions of Section 6.2(a) and 6.2(b)
hereof, to the extent COBRA shall be applicable to the Company, the
Employee shall be entitled to continuation of group health plan benefits
for such period as may then be required by law if the Employee satisfies
all applicable conditions to the receipt of such continuation of
benefits, including any required elections or payments.
(e) Employee acknowledges that, upon termination of his
employment, he is entitled to no other compensation, severance or other
benefits other than those specifically set forth in this Agreement.
(f) The provisions of this Section 6.2 are intended to be and
are exclusive and in lieu of any other rights or remedies to which the
Employee or the Company may otherwise be entitled, either at law, tort
or contract, in equity, or under this Agreement, as a result of any
termination of the Employee's employment. The Employee shall be entitled
to no benefits, compensation or other payments or rights upon
termination of employment other than those benefits expressly set forth
in this Section 6.2.
6.3 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 one
year from the Termination Date. The Company shall exercise such option by giving
written notice thereof to Employee within ten (10) days after the Termination
Date, and the obligations of Employee as a consultant upon such exercise shall
be effective from the Termination Date. If the Company elects to exercise such
option, Employee shall make himself available to the Company during the period
of consultancy at least 2 hours during any one-month period. Employee agrees to
accept as consideration for such services as a consultant a fee of $100 per
hour. In addition, the Company shall reimburse Employee for any reasonable
expenses paid or incurred by Employee in connection with the performance of
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 to be bound by the obligation not to compete with the
Company as set forth in Section 7 below during the period for which Employee is
a consultant for the Company.
7. Confidential Information
Employee acknowledges that during Employee's employment or consultancy
with the Company, Employee will develop, discovery, have access to, and become
acquainted with technical, financial, marketing, personnel, and other
information relating to the present or contemplated products, services
(including prices, costs, sales, or content), or the conduct of business of the
Company or an Affiliate, computer programs, computer systems, operations,
processes, knowledge of the organization or the industry, research and
development operations, future business plans, customers (including identities
of customers and prospective customers, identities of individual contracts at
business entities which are
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customers or potential customers), business relationships, or other information,
which is of a confidential and proprietary nature ("Confidential Information").
Employee agrees that all files, data, records, reports, documents, and the like
relating to such Confidential Information, whether prepared by him or otherwise
coming into Employee's possession, shall remain the exclusive property of the
Company (or its Affiliates as the case may be), and Employee hereby agrees to
promptly disclose such Confidential Information to the Company upon request and
hereby assigns to the Company any rights which Employee may acquire in any
Confidential Information. Employee further agrees not to disclose or use any
Confidential Information and to use Employee's best efforts to prevent the
disclosure or use of any Confidential Information either during the term of
employment or consultancy or at any time thereafter, except as may be necessary
in the ordinary course of performing Employee's 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.
8. Invention Assignment
8.1 Disclosure of Inventions. Employee hereby agrees that if he
conceives, learns, makes, or first reduces to practice, either alone or jointly
with others, any inventions, improvements, original works of authorship,
formulas, processes, computer programs, sales or marketing techniques, know-how,
or data (hereinafter referred to as "Inventions") relating to the business
and/or technology of the Company while he is employed by the Company, he will
promptly disclose such Inventions to the Company or to any person designated by
the Company.
8.2 Ownership, Assignment, Assistance, and Power of Attorney. All
Inventions relating to the Company's business, operations, or research and
development which result from work performed by Employee for the Company shall
be the sole and exclusive property of the Company, and the Company shall have
the right to use and to apply for patents, copyrights, or other statutory or
common law protections for such Inventions in any country. Employee hereby
assigns to the Company any rights which Employee has acquired or which Employee
may acquire in such Inventions. Furthermore, Employee agrees to assist the
Company in every proper way at the Company's expense to obtain patents,
copyrights, and other statutory or common law protections for such Inventions in
any country and to enforce such rights from time to time. Specifically, Employee
agrees to execute all documents as the Company may use in applying for and in
obtaining or enforcing such patents, copyrights, and other statutory or common
law protections, together with any assignments thereof to the Company or to any
person designated by the Company. Employee's obligations under this paragraph
shall continue beyond the termination of his employment with the Company, but
the Company shall compensate Employee at a reasonable rate after such
termination for the time which Employee actually spends at the Company's request
in rendering such assistance. In the event the Company is unable for any reason
whatsoever to secure Employee's signature to any lawful document required to
apply for or to enforce any patent, copyright, or other statutory or common law
protections for such Inventions, Employee hereby irrevocably and severally
designates and appoints the Company and its duly authorized officers and agents
as Employee's agents and attorneys-in-fact to act in Employee's stead to execute
such documents and to do such other lawful and necessary acts to further the
issuance or prosecution of such patents, copyrights, and other statutory or
common law protections, and Employee hereby declares that such documents or such
acts shall have the same legal force and effect as if such documents were
executed by Employee or such acts were done by Employee.
8.3 Exclusion of Prior Inventions. Employee has identified on Exhibit B
attached hereto a complete list of all Inventions which Employee has conceived,
learned, made or first reduced to practice, either alone or jointly with others,
prior to Employee's employment with the Company and which Employee desires to
exclude from the operation of this Agreement. If no Inventions are listed on
this Exhibit B, Employee represents that he has made no such Inventions at the
time of signing this Agreement.
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9. No Conflicts
Employee hereby represents that, to the best of Employee's knowledge,
Employee's performance of all the terms of this Agreement and work as an
employee or consultant of the Company does not breach any oral or written
agreement which Employee has made prior to employment with the Company
hereunder.
10. Equitable Remedies
Employee acknowledges that Employee's obligations hereunder are special,
unique, and extraordinary, and that a breach by Employee of certain provisions
of this Agreement, including without limitation Sections 7 and 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. All of the rights of
the Company from whatever source derived, shall be cumulative and not
alternative.
11. Assignment
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 be assigned or
delegated in whole or in part by the Company and, in such case, the terms of
this Agreement shall inure to the benefit of, be assumed by, and be binding upon
the entity to which this Agreement is assigned.
12. Waiver or Modification
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. Resolution of Disputes
The Parties hereby agree that all disputes concerning this Agreement
shall be subject to binding arbitration by an independent arbitrator to be
jointly selected and agreed upon by the Parties hereto. In the event that the
Parties cannot agree upon an independent arbitrator, the Parties hereby consent
to subject any such dispute to binding arbitration in accordance with the rules
of the American Arbitration Association. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. The Parties
agree that the Company and Employee shall equally bear the costs of any such
arbitration under this Section 13.
14. Entire Agreement
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.
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15. Employee Acknowledgment.
Employee acknowledges that (i) he was consulted with or has had the
opportunity to consult with independent counsel of his own choice concerning
this Agreement, and has been advised to do so by the Company, and (ii) that he
has read and understands the Agreement, is fully aware of its legal effect, and
has entered into it freely based upon his own judgement.
16. 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.
17. Notices
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 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 shall be effective upon receipt. A notice sent by
facsimile transmission shall be effective twenty-four hours after the dispatch
thereof. 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: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇-▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
(b) To the Company at: ▇▇▇▇▇▇▇▇▇▇.▇▇▇ International, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
18. Governing Law; Venue
This Agreement shall be governed by and construed in accordance with the
laws of the State of Utah without regard to the conflict of laws. The Parties
further agree that proper venue and jurisdiction for any dispute under this
agreement shall be the courts in 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 to be effective as of the date first given above.
▇▇▇▇▇▇▇▇▇▇.▇▇▇ INTERNATIONAL, INC. EMPLOYEE
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Executive Vice President
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