SUNDOG CORPORATION
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is entered into this 9th day of
November, 2000 (hereinafter the "Effective Date") by and between Sundog
Technologies, Inc., 10542 Jordan Gateway, Suite 200, South City Jordan, Utah
84095 ("Sundog"), and Blake Nielson, whose address is
10073 Silver Streak Dr. South Jordan, UT 84095 ("Employee").
WHEREAS, Sundog has entered into a Letter of Intent, dated August 23,
2000 ("LOI") to acquire substantially all of the assets of Ensign Information
Systems, Inc. ("Ensign"); and
WHEREAS, Employee is (i) a founder of Ensign, (ii) the Vice President
of Client Services of Ensign, and (iii) and has played a significant role in
developing the business model used by Ensign; and
WHEREAS, as a condition to entering into a definitive agreement and
closing the transaction contemplated by the LOI Sundog desires to enter into an
agreement with Employee to assure that his expertise remains with Sundog
following the transaction closing; and
WHEREAS, Employee also desires to enter in to an agreement with Sundog
whereby his services will be available to Sundog for a term of at least three
(3) years;
NOW THEREFORE, In consideration for Sundog entering into and closing the
transaction evidenced by the LOI; and, further, in consideration of the
employment of Employee by Sundog and payment of wages, fees, benefits or other
remuneration, the sufficiency of which is hereby acknowledged, the parties
mutually agree as follows:
I. GENERAL PROVISIONS
1.1 Position. Sundog agrees to employ Employee and Employee agrees to
serve as Vice President of Client Services, which may change from time to time
based upon Sundog's business needs. Sundog has the right to assign Employee
additional or substitute titles and duties as Sundog may determine in its sole
and absolute discretion.
1.2 Compensation. As compensation for employment services rendered,
Sundog agrees to provide Employee with a total compensation package of $120,000
annually, payable in accordance with Sundog payroll policies ("Target Income").
The Target Income shall consist of a base salary ("Base Compensation") and an
annual bonus based on achieving financial and/or non-financial objectives
established by Sundog with input from employee ("Bonus"). For the first year of
this Agreement, Employee's Base Compensation will be $108,000 and the Bonus will
consist of $12,000. The parties agree that Sundog has the right, in its
discretion, to prospectively change the amount and nature of compensation.
1
<PAGE>
1.3 Employee's Conduct. Employee agrees to perform the duties as
specified by Sundog in a competent and responsible manner and to the
satisfaction of Sundog. Employee agrees not to engage in any of the conduct or
practices prohibited under this Agreement or which could reflect on Sundog
negatively. Employee agrees to abide by policies, procedures, and guidelines set
forth from time to time in handbooks and other materials provided to Employee.
1.4 Term. Employee's employment with Sundog shall commence on the
Effective Date and shall continue for three (3) years (the "Term"), unless
terminated pursuant to Section 1.5 or Section 1.6. Thereafter, Employee's
employment at Sundog shall be "at will." Following the Term, either party may
terminate Employee's employment, at any time, and for whatever reason.
1.5 Termination For Cause. Notwithstanding any provision in this
Agreement to the contrary, Sundog may terminate Employee's employment at any
time for Cause. Termination shall be for Cause if: (a) Employee embezzles funds
of Sundog or any of its subsidiaries, is convicted of a felony or gross
misdemeanor or any criminal activity involving dishonesty, fraud, breach of
trust or involving money or property of Sundog, (b) Employee breaches any
provisions of this Agreement, or (c) Employee engages in continuing substance
abuse of alcohol or drug. In the event of termination for Cause, Employee will
be entitled only to wages earned prior to the effective date of termination,
computed pro rata. Employee will not be entitled to any other compensation,
damages, or other amounts.
1.6 Termination for Convenience. Notwithstanding any provision of this
Agreement to the contrary, Sundog may terminate Employee's employment at any
time, in Sundog's sole discretion and solely at Sundog's convenience
(termination for "Convenience"). Where Employee is terminated for Convenience,
Sundog shall continue to make compensation payments to Employee, in accordance
with Sundog payroll schedules and policies, in an amount equal to Employees
Target Income of $120,000, annually ("Termination Compensation"). Termination
Compensation shall cease on the last day of the Term.
1.7 Benefits. During the period of Employee's employment and provided
eligibility requirements have been satisfied, if any, Employee will be entitled
to receive all standard employee benefits then in effect for employees of
Sundog, including but not limited to vacation, holidays, medical insurance,
retirement benefits and sick leave.
1.8 Relocation. In no event shall Employee be required to relocate
outside of the State of Utah without Employees written consent. In the event
Sundog (or their successor) requires Employee to relocate outside of Utah as a
condition of continued employment, Sundog shall provide notice of such to
Employee in writing. If Employee elects not to relocate and notifies Sundog in
writing of the same, and should Employee be terminated as a result of his
failure to relocate outside the state of Utah, such action shall be construed as
Sundog having terminated Employee for Convenience, as set forth in Section 1.6,
above
2
<PAGE>
II. CONFIDENTIAL INFORMATION
2.1 Non-disclosure of Confidential Information. Employee agrees and
acknowledges that the terms "Confidential Information" or "Proprietary
Information" or any variation thereof incorporating the terms "Confidential" or
"Proprietary" shall mean any and all confidential, proprietary or secret
information not in the public domain, emanating from or relating to Sundog,
including but not limited to, trade secrets, technical information, methods of
operation and procedures, know-how, computer programs, designs, documentation,
financial information, customer lists or requirements, research and development
tests and reports, formulas, specifications, disks and printouts, product or
marketing plans or any other compilation of written information which is used in
Sundog's business and which gives Sundog an opportunity to obtain an advantage
over its competitors. Employee agrees and acknowledges that all Confidential
Information, in any form, and copies and extracts thereof, is and are and shall
remain the sole and exclusive property of Sundog and, upon termination of
Employee's employment with Sundog, Employee hereby agrees to return to Sundog
the originals and all copies of any Confidential and Proprietary Information
provided or acquired by Employee during the period of employment. Employee
agrees not to disclose to any person (except to other Sundog employees on a
"need to know" basis) or entity, or use for the benefit of any person or entity
other than Sundog, any Confidential Information, except upon the express written
consent of Sundog, or as otherwise required by law. This Paragraph shall survive
termination of Employee's employment with Sundog for a period of ten (10) years.
2.2 Confidential Information of Third Parties. Employee understands
that confidential information may be submitted to Sundog by other persons,
businesses or entities. Employee further understands that as a condition for
receiving said confidential information, Sundog may enter into agreements with
said other persons, businesses or entities restricting or prohibiting use,
transfer or disclosure of said confidential information. Employee agrees to
respect any such agreements and to avoid any action or inaction that is
inconsistent with the obligations lawfully imposed on Sundog thereunder.
Employee further agrees to treat said confidential information with the same
degree of care that is afforded to information confidential to Sundog
III. INVENTIONS AND PRODUCT DEVELOPMEMNT
3.1 Disclosure Obligations. Employee will fully and promptly disclose
and furnish to Sundog a complete record of any and all inventions and
improvements, whether patentable or not, which Employee, solely or jointly, may
conceive, make, discover, or first disclose during the period of his/her
employment by Sundog which relate to Sundog's business or to Sundog's reasonably
anticipated business (each, an "Invention"). Employee agrees to make and
maintain adequate and current written records of all such Inventions in the form
of notes, sketches, drawings, or reports relating thereto, which records shall
be and remain the property of and available to Sundog at all times.
3.2 Assignment. Employee agrees to and does hereby grant and assign to
Sundog or its nominee his/her entire right, title and interest in and to any
Inventions, together with any and all domestic and foreign rights in such
Inventions. However, no provision in this Agreement is intended to require
assignment of any Employee rights in an Invention if no equipment, supplies,
facilities, time, software, resource, or trade secret information of Sundog was
used, and the information was developed entirely on Employee's own time, and the
invention does not relate to the business of Sundog or to Sundog's actual or
anticipated research or development or does not result from any work performed
by Employee for Sundog.
3
<PAGE>
3.3 Execution of Documents and Prior Inventions. Employee agrees to
fully cooperate with Sundog in securing full benefit and protection for Sundog
in said inventions and improvements including patent or copyrights protection,
wherever and whenever Sundog should elect. Employee will execute all papers and
documents and do such other action reasonably requested by Sundog at any time
during and after employment by Sundog, without additional compensation, but at
Sundog's expense. There are no inventions which Employee has made heretofore and
which Employee desires to be excluded from this Agreement.
3.4 No Additional Consideration. Other than the consideration stated
herein, Employee has not been promised, and shall not claim, any additional or
special payment for compliance with the covenants and agreements contained in
this Agreement.
IV. COMPETITIVE ACTIVITIES AFTER EMPLOYMENT
4.1 Non-Compete. Employee agrees that, if his employment terminates for
any reason, Employee will not thereafter engage directly or indirectly in, as
principal, agent, officer, or in any other capacity, or have any interest in, or
perform services for, a business that engages in any business operation that is
competitive with Sundog's business for a period of two (2) years from the
termination of Employee's employment with Sundog. Such prohibited activity
includes, but is not limited to, any research, development, creation, sales,
marketing, promotion, endorsement, sponsorship, licensing, rental, lease, and/or
commercialization of any product or service competitive with any or the products
of services offered by Sundog. The geographic scope of the restrictions of this
paragraph shall be limited to North America and any foreign market in which
Sundog conducts business.
4.2 Non-Solicitation. Employee agrees that upon the termination of his
employment with Sundog and for a period of two (2) years thereafter, he will not
(a) on behalf of a business that offers products or services that compete with
those of Sundog, solicit the purchase of such competing products or services
from any party who is a customer, client, account or vendor of Sundog on the
date of termination of his employment, (b) divert, solicit, employ or attempt to
divert, solicit or employ, any employees of Sundog who are employees on the date
of termination of his employment.
4.3 Injunctive Relief. Employee acknowledges that breach of this
covenant would cause loss to Sundog not fully compensable in monetary damages.
Employee consents to entry of an order for injunctive relief, either temporary
or permanent, or any other remedy, at law or equity, which Sundog deems
necessary to protect its rights under this Agreement.
4.4 Reasonableness. Employee acknowledges that the terms of this
Agreement are reasonable and that they represent the least restriction on
Employee's future employment and ability to earn a living that are consistent
with protection of Sundog's business, trade secrets and the Inventions. In the
event that the duration, geographic scope or scope of business activities
affected by this Section 4 are determined to be invalid or unenforceable, it is
expressly agreed that the relevant provisions shall be construed to cover only
that duration, geographic scope or business scope which may be validly and
enforceably covered (and any court or tribunal is hereby authorized to so amend
this Agreement).
4
<PAGE>
V. GENERAL PROVISIONS
5.1 Entire Agreement. This Agreement sets forth the entire agreement
between the Employee and Sundog and cannot be modified or altered nor can any
provision hereof be waived except in writing signed by a duly authorized
representative of Sundog and Employee. The parties agree that they may enter
into other agreements, including but not limited to, stock option agreements,
which shall not supersede or modify this Agreement in any respect unless such
other agreements expressly provide that they shall supersede or modify this
Agreement. This Agreement shall supersede the terms of any prior employment
agreement or understanding between Employee and Sundog.
5.2 Invalidity of Provision. In the event any provision of this
Agreement is held to be invalid, illegal, or unenforceable, in any respect, any
such provision(s) shall be construed or eliminated to the extent necessary under
applicable law and the other provisions of this Agreement shall not be affected.
5.3 Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the Employee, his or her heirs, executors, administrators, and
legal representatives and Sundog, its successors and assigns.
5.4 Notice. Any written notice required or permitted to be given under
this Agreement shall be sufficient if personally delivered or sent by registered
or certified mail to the Employee at his or her last known mailing address or
residence, or to Sundog at its principal office.
5.5 Enforcement. Sundog and Employee understand and agree that Employee
is employed in a position in which Employee will have access to confidential
material and trade secrets of a special, unique, unusual, and extraordinary or
intellectual character which gives it peculiar value, the loss of which Employee
agrees cannot be fully or adequately compensated in damages in an action at law
and would cause Sundog immediate and irreparable damage. Employee agrees that
Sundog shall be entitled to preliminary and other injunctive relief, that may
include but shall not be limited to, restraining Employee from rendering any
service or performing any activity that would breach this Agreement, an order
for specific relief, and other equitable relief. However, no remedy conferred by
any of the specific provisions of this Agreement is intended to be exclusive of
any other remedy, and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or otherwise. The election of any one or more
remedies by Sundog shall not constitute a waiver of the right to pursue other
available remedies.
5.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah.
5
<PAGE>
5.7 Survivability. Sections II, IV and 5.7 of this Agreement shall
survive termination of this Agreement and Employee's employment with Sundog.
SUNDOG TECNOLOGIES, INC
By:/s/ Alan Rudd
-----------------------------------------
Alan Rudd, President
EMPLOYEE
By:/s/ Blake Nielson
-----------------------------------------
Blake Nielson, an individual
6
