Exhibit 10.1

 

EXECUTION COPY

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made by and between INVESTools
Inc., a Delaware corporation (the “Company”), and Lee K. Barba (the “Executive”)
effective as of March 4, 2004 (the “Effective Date”).

 

WHEREAS, the Executive is currently employed by the Company pursuant to an
employment agreement between the Executive and the Company, dated December 6,
2001 (the “Prior Employment Agreement”);

 

WHEREAS, the Company and the Executive now desire to enter into this new
Agreement, which is intended to amend, restate, supersede and replace the Prior
Employment Agreement in its entirety to reflect the Executive’s position and
duties, his compensation, and other terms and conditions of his employment as
Chief Executive Officer of the Company.

 

WHEREAS, following the execution of this Agreement by both the Executive and the
Company, as of the Effective Date, the Prior Employment Agreement shall
terminate and no longer have any force and effect.

 

NOW, THEREFORE, for and in consideration of the mutual promises, covenants and
obligations contained herein, the Company and Executive agree as follows:

 

ARTICLE I

EMPLOYMENT AND DUTIES

 

SECTION 1.1              THE COMPANY AGREES TO EMPLOY EXECUTIVE AND EXECUTIVE
AGREES TO BE EMPLOYED BY THE COMPANY, SUBJECT TO THE TERMS AND CONDITIONS OF
THIS AGREEMENT, BEGINNING AS OF THE EFFECTIVE DATE AND CONTINUING FOR THE TERM
HEREOF.

 

SECTION 1.2              FROM AND AFTER THE EFFECTIVE DATE, THE COMPANY SHALL
EMPLOY EXECUTIVE IN THE POSITION OF CHIEF EXECUTIVE OFFICER OF THE COMPANY, OR
IN SUCH OTHER POSITIONS AS THE PARTIES MUTUALLY MAY AGREE.

 

SECTION 1.3              EXECUTIVE AGREES TO SERVE IN THE POSITION REFERRED TO
IN SECTION 1.2 HEREOF AND TO PERFORM DILIGENTLY AND TO THE BEST OF HIS ABILITIES
THE DUTIES AND SERVICES PERTAINING TO SUCH OFFICE AS SET FORTH IN THE BYLAWS OF
THE COMPANY IN EFFECT ON THE EFFECTIVE DATE, AS WELL AS SUCH ADDITIONAL DUTIES
AND SERVICES APPROPRIATE TO SUCH OFFICE AS THE BOARD OF DIRECTORS OF THE COMPANY
(THE “BOARD OF DIRECTORS”) MAY REASONABLY ASSIGN TO EXECUTIVE FROM TIME TO TIME.

 

SECTION 1.4              EXECUTIVE AGREES, DURING THE PERIOD OF HIS EMPLOYMENT
BY THE COMPANY, TO DEVOTE HIS FULL BUSINESS TIME, ENERGY AND BEST EFFORTS TO THE
BUSINESS AND AFFAIRS OF THE COMPANY AND ITS AFFILIATES AND NOT TO ENGAGE,
DIRECTLY OR INDIRECTLY, IN ANY OTHER BUSINESS OR BUSINESSES, WHETHER OR NOT
SIMILAR TO THAT OF THE COMPANY, EXCEPT WITH THE PRIOR WRITTEN CONSENT OF THE
BOARD OF DIRECTORS. NOTWITHSTANDING THE FOREGOING, THE PARTIES RECOGNIZE AND
AGREE THAT EXECUTIVE MAY ENGAGE IN PASSIVE PERSONAL INVESTMENTS AND CHARITABLE
OR PUBLIC SERVICE ACTIVITIES AND SERVE ON THE BOARD OF DIRECTORS OF CORPORATIONS
TO THE EXTENT THAT SUCH ACTIVITIES DO NOT CONFLICT WITH THE BUSINESS AND AFFAIRS
OF THE COMPANY OR INTERFERE WITH EXECUTIVE’S PERFORMANCE OF HIS DUTIES AND
OBLIGATIONS HEREUNDER.

 

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ARTICLE II

TERM AND TERMINATION OF EMPLOYMENT

 

SECTION 2.1              EMPLOYMENT.  THE COMPANY AGREES TO EMPLOY THE EXECUTIVE
AND THE EXECUTIVE HEREBY ACCEPTS EMPLOYMENT, IN ACCORDANCE WITH THE TERMS AND
CONDITIONS SET FORTH HEREIN, FOR A TERM (THE “EMPLOYMENT TERM”) COMMENCING ON
THE EFFECTIVE DATE AND TERMINATING, UNLESS OTHERWISE TERMINATED EARLIER IN
ACCORDANCE WITH SECTIONS 2.2 OR 2.3 HEREOF, ON MARCH 4, 2007 (THE “INITIAL
EMPLOYMENT TERM”), PROVIDED THAT THE EMPLOYMENT TERM SHALL BE AUTOMATICALLY
EXTENDED, SUBJECT TO EARLIER TERMINATION AS PROVIDED IN THIS ARTICLE II, FOR
SUCCESSIVE ADDITIONAL ONE (1) YEAR PERIODS (THE “ADDITIONAL TERMS”), UNLESS, AT
LEAST NINETY (90) DAYS PRIOR TO THE END OF THE INITIAL EMPLOYMENT TERM OR THE
THEN ADDITIONAL TERM, THE COMPANY OR THE EXECUTIVE HAS NOTIFIED THE OTHER IN
WRITING THAT THE EMPLOYMENT TERM SHALL TERMINATE AT THE END OF THE THEN CURRENT
EMPLOYMENT TERM.

 

SECTION 2.2              TERMINATION BY COMPANY.  NOTWITHSTANDING THE PROVISIONS
OF SECTION 2.1 HEREOF, THE COMPANY SHALL HAVE THE RIGHT TO TERMINATE EXECUTIVE’S
EMPLOYMENT UNDER THIS AGREEMENT AT ANY TIME:

 

(A)                                  UPON EXECUTIVE’S DEATH;

 

(B)                                 UPON THE EXECUTIVE BECOMING INCAPACITATED OR
DISABLED BY ACCIDENT, SICKNESS OR OTHER CIRCUMSTANCE WHICH IMPAIRMENT (DESPITE
REASONABLE ACCOMMODATION) RENDERS HIM MENTALLY OR PHYSICALLY INCAPABLE OF
PERFORMING THE DUTIES AND SERVICES REQUIRED OF HIM HEREUNDER FOR A PERIOD OF AT
LEAST 120 CONSECUTIVE DAYS OR FOR A PERIOD OF 180 BUSINESS DAYS DURING ANY
12-MONTH PERIOD;

 

(C)                                  FOR “CAUSE,” WHICH FOR PURPOSES OF THIS
AGREEMENT SHALL MEAN EACH OF THE FOLLOWING:

 

(I)                                     A MATERIAL ACT OR MATERIAL ACTS OF
DISHONESTY OR DISLOYALTY BY EXECUTIVE ADVERSELY AFFECTING THE COMPANY;

 

(II)                                  EXECUTIVE’S BREACH OF ANY OF HIS MATERIAL
OBLIGATIONS UNDER THIS AGREEMENT;

 

(III)                               EXECUTIVE’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT IN PERFORMANCE OF THE DUTIES AND SERVICES REQUIRED OF HIM PURSUANT TO
THIS AGREEMENT; OR

 

(IV)                              EXECUTIVE’S CONVICTION OF A FELONY OR A
MISDEMEANOR INVOLVING MORAL TURPITUDE.

 

(D)                                 IN THE SOLE DISCRETION OF THE BOARD OF
DIRECTORS WITHOUT CAUSE; PROVIDED, HOWEVER, IN SUCH CASE THE COMPANY SHALL GIVE
15 DAYS PRIOR WRITTEN NOTICE TO EXECUTIVE OF ITS INTENTION TO TERMINATE
EXECUTIVE’S EMPLOYMENT WITH THE COMPANY AND SHALL CONTINUE TO PROVIDE

 

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compensation to Executive in accordance with the terms set forth in Section 4.4
hereof.

 

SECTION 2.3              TERMINATION BY EXECUTIVE EXECUTIVE SHALL HAVE THE RIGHT
TO TERMINATE HIS EMPLOYMENT UNDER THIS AGREEMENT AT ANY TIME IN ACCORDANCE WITH
THE FOLLOWING PROVISIONS:

 

(A)                                  A BREACH BY THE COMPANY OF ANY OF ITS
OBLIGATIONS UNDER THIS AGREEMENT WHICH REMAINS UNCORRECTED FOR 30 DAYS FOLLOWING
WRITTEN NOTICE SPECIFYING SUCH BREACH GIVEN BY EXECUTIVE TO THE COMPANY; OR

 

(B)                                 IMMEDIATELY FOLLOWING A “CONSTRUCTIVE
TERMINATION,” WHICH FOR PURPOSES OF THIS AGREEMENT SHALL MEAN EACH OF THE
FOLLOWING:

 

(I)                                     A MATERIAL DIMINUTION IN EXECUTIVE’S
TITLE, DUTIES, RESPONSIBILITIES, OR AUTHORITY OR THE ASSIGNMENT TO EXECUTIVE OF
DUTIES MATERIALLY INCONSISTENT WITH HIS POSITION;

 

(II)                                  RELOCATION OF ANY NEW YORK, NEW YORK
OFFICE OF THE COMPANY WITHOUT THE CONSENT OF EXECUTIVE; OR

 

(III)                               A MATERIAL REDUCTION IN EXECUTIVE’S
COMPENSATION AND BENEFITS RECEIVED HEREUNDER.

 

(C)                                  IN THE SOLE DISCRETION OF EXECUTIVE,
PROVIDED, HOWEVER, IN SUCH CASE EXECUTIVE SHALL GIVE 15 DAYS’ PRIOR WRITTEN
NOTICE TO THE COMPANY OF HIS INTENTION TO TERMINATE HIS EMPLOYMENT WITH THE
COMPANY.

 

SECTION 2.4              NOTICE.  IF THE COMPANY DESIRES TO TERMINATE
EXECUTIVE’S EMPLOYMENT HEREUNDER AS PROVIDED IN SECTION 2.2 HEREOF OR EXECUTIVE
DESIRES TO TERMINATE EXECUTIVE’S EMPLOYMENT HEREUNDER AS PROVIDED IN SECTION 2.3
HEREOF, IT OR HE SHALL DO SO BY GIVING WRITTEN NOTICE TO THE OTHER PARTY THAT IT
OR HE HAS ELECTED TO TERMINATE EXECUTIVE’S EMPLOYMENT HEREUNDER AND STATING THE
EFFECTIVE DATE AND REASON, IF ANY, FOR SUCH TERMINATION. IN THE EVENT OF SUCH
TERMINATION, THE PROVISIONS OF ARTICLES IV THROUGH IX HEREOF SHALL CONTINUE TO
APPLY IN ACCORDANCE WITH THEIR TERMS. ANY QUESTION AS TO WHETHER AND WHEN THERE
HAS BEEN A TERMINATION OF EXECUTIVE’S EMPLOYMENT, AND THE CAUSE OF SUCH
TERMINATION, SHALL BE DETERMINED BY THE BOARD OF DIRECTORS IN ITS SOLE
DISCRETION.

 

ARTICLE III

COMPENSATION AND BENEFITS

 

SECTION 3.1              COMPENSATION.  DURING THE EMPLOYMENT TERM, THE COMPANY
SHALL PROVIDE COMPENSATION TO EXECUTIVE IN THE FOLLOWING FORMS:

 

(A)                                  BASE SALARY.  THE COMPANY SHALL PAY THE
EXECUTIVE AN ANNUAL BASE SALARY (THE “BASE SALARY”) AT A RATE OF $425,000, WHICH
AMOUNT SHALL BE SUBJECT TO ANNUAL REVIEW BY THE BOARD OF DIRECTORS AND/OR THE
COMPENSATION COMMITTEE OF THE COMPANY FOR POSSIBLE INCREASES.

 

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(B)                                 BONUS.  FOR EACH CALENDAR YEAR DURING THE
EMPLOYMENT TERM, THE EXECUTIVE SHALL BE ELIGIBLE TO RECEIVE A BONUS OR BONUSES
BASED UPON THE EXECUTIVE’S PERFORMANCE AND COMPUTED IN ACCORDANCE WITH THE
COMPANY’S MANAGEMENT INCENTIVE BONUS PLAN.  EFFECTIVE WITH THE 2004 CALENDAR
YEAR AND FOR EACH SUBSEQUENT CALENDAR YEAR COMMENCING DURING THE EMPLOYMENT
TERM, THE TARGET BONUS OR BONUSES FOR THE EXECUTIVE IN ANY CALENDAR YEAR SHALL,
IN THE AGGREGATE, TOTAL AT LEAST EQUAL TO 60% OF EXECUTIVE’S BASE SALARY (THE
“TARGET BONUS”).  THE TARGET BONUS SHALL BE REVIEWED FROM TIME TO TIME BY THE
COMPENSATION COMMITTEE TO ASCERTAIN WHETHER, IN THE JUDGMENT OF THE REVIEWING
COMMITTEE, SUCH TARGET BONUS SHOULD BE INCREASED.

 

(C)                                  STOCK OPTIONS.  IN CONNECTION WITH THIS
AGREEMENT, AS OF THE EFFECTIVE DATE, THE BOARD OF DIRECTORS HAVE GRANTED TO THE
EXECUTIVE AN OPTION UNDER THE COMPANY’S STOCK OPTION PLAN TO PURCHASE 250,000
SHARES OF THE COMPANY’S COMMON STOCK (“COMMON STOCK”) AT AN EXERCISE PRICE EQUAL
TO THE FAIR MARKET VALUE (AS DEFINED UNDER THE COMPANY’S STOCK OPTION PLAN) OF A
SHARE OF COMMON STOCK ON THE EFFECTIVE DATE (THE “OPTION GRANT”).  THE OPTION
GRANT IS EVIDENCED BY, AND SUBJECT TO, THE TERMS AND CONDITIONS IN THE STOCK
OPTION AGREEMENT ATTACHED HERETO AS EXHIBIT A.  EXECUTIVE SHALL BE ELIGIBLE TO
RECEIVE FUTURE ADDITIONAL STOCK OPTION GRANTS, AS DETERMINED BY THE COMPENSATION
COMMITTEE, IN ITS SOLE DISCRETION.  NOTWITHSTANDING ANY PROVISION OF THIS
AGREEMENT TO THE CONTRARY, NOTHING IN THIS AGREEMENT SHALL AFFECT ANY STOCK
OPTIONS GRANTED PRIOR TO THE EFFECTIVE DATE OR UNDER THE PRIOR EMPLOYMENT
AGREEMENT.

 

SECTION 3.2              BENEFITS.  DURING THE EMPLOYMENT TERM, EXECUTIVE SHALL
BE AFFORDED THE FOLLOWING BENEFITS:

 

(A)                                  BUSINESS AND ENTERTAINMENT EXPENSES. 
SUBJECT TO THE COMPANY’S STANDARD POLICIES AND PROCEDURES WITH RESPECT TO
EXPENSE REIMBURSEMENT AS APPLIED TO ITS EXECUTIVE EMPLOYEES GENERALLY, THE
COMPANY SHALL REIMBURSE EXECUTIVE FOR, OR PAY ON BEHALF OF EXECUTIVE, REASONABLE
AND APPROPRIATE EXPENSES INCURRED BY EXECUTIVE FOR BUSINESS RELATED PURPOSES,
INCLUDING DUES AND FEES TO APPROVED INDUSTRY AND PROFESSIONAL ORGANIZATIONS, AND
REASONABLE COSTS OF ENTERTAINMENT INCURRED IN CONNECTION WITH BUSINESS
DEVELOPMENT.

 

(B)                                 OTHER.  SUBJECT TO APPLICABLE LAW, EXECUTIVE
AND, TO THE EXTENT APPLICABLE, EXECUTIVE’S FAMILY, DEPENDENTS AND BENEFICIARIES,
SHALL BE ALLOWED TO PARTICIPATE IN ALL BENEFITS, PLANS AND PROGRAMS, INCLUDING
IMPROVEMENTS OR MODIFICATIONS OF THE SAME, WHICH ARE NOW, OR MAY HEREAFTER BE,
AVAILABLE TO EXECUTIVE EMPLOYEES OF THE COMPANY GENERALLY; PROVIDED, HOWEVER,
THAT EXECUTIVE AND EXECUTIVE’S FAMILY SHALL CONTINUE TO PARTICIPATE IN SUCH
HEALTH PLAN UNDER WHICH EXECUTIVE IS CURRENTLY COVERED. SUCH BENEFITS, PLANS AND
PROGRAMS MAY INCLUDE, WITHOUT LIMITATION, A PROFIT SHARING PLAN, A THRIFT PLAN,
A HEALTH INSURANCE OR HEALTH

 

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CARE PLAN, LIFE INSURANCE, DISABILITY INSURANCE OR A PENSION PLAN. THE COMPANY
SHALL NOT, HOWEVER, BY REASON OF THIS SECTION BE OBLIGATED TO INSTITUTE,
MAINTAIN, OR REFRAIN FROM CHANGING, AMENDING OR DISCONTINUING, ANY SUCH BENEFIT
PLAN OR PROGRAM, SO LONG AS SUCH CHANGES ARE SIMILARLY APPLICABLE TO EXECUTIVE
EMPLOYEES OF THE COMPANY GENERALLY.

 

SECTION 3.3              PAYROLL.  EXECUTIVE SHALL RECEIVE ALL COMPENSATION AND
REIMBURSEMENTS PURSUANT TO THIS AGREEMENT IN ACCORDANCE WITH THE CUSTOMARY
PAYROLL PRACTICES OF THE COMPANY’S PROVO, UTAH OFFICES WITH RESPECT TO TIME AND
MANNER OF PAYMENT.

 

ARTICLE IV

EFFECT OF TERMINATION ON COMPENSATION

 

SECTION 4.1              TERMINATION UPON DEATH.  THE EMPLOYMENT TERM SHALL
TERMINATE AS OF THE DATE OF THE EXECUTIVE’S DEATH.  IN THE EVENT OF THE
EXECUTIVE’S DEATH, ALL OF EXECUTIVE’S RIGHTS AND BENEFITS PROVIDED FOR IN THIS
AGREEMENT WILL TERMINATE AS OF SUCH DATE; PROVIDED HOWEVER, THAT THE COMPANY
SHALL PAY THE EXECUTIVE’S ESTATE:

 

(I)                                     ALL UNPAID AMOUNTS, IF ANY, TO WHICH THE
EXECUTIVE WAS ENTITLED AS OF THE DATE OF HIS DEATH UNDER SECTIONS 3.1(A) AND
3.1(B) HEREOF;

 

(II)                                  ALL UNPAID AMOUNTS TO WHICH THE EXECUTIVE
WAS THEN ENTITLED UNDER ANY EMPLOYEE BENEFIT PLAN, AS PERQUISITES OR OTHER
REIMBURSEMENTS (THE AMOUNTS SET FORTH IN CLAUSES (I) AND (II) BEING HEREINAFTER
REFERRED TO AS THE “ACCRUED AMOUNTS”); AND

 

(III)                               AN AMOUNT EQUAL TO ONE-HALF OF THE
EXECUTIVE’S BASE SALARY (AS EXISTING AT THE TIME OF DEATH), PAYABLE IN
SUBSTANTIALLY EQUAL INSTALLMENTS IN ACCORDANCE WITH THE CUSTOMARY PAYROLL
PRACTICES OF THE COMPANY’S PROVO, UTAH OFFICES WITH RESPECT TO TIME AND MANNER
OF PAYMENT.

 

SECTION 4.2              TERMINATION UPON DISABILITY.  IF EXECUTIVE’S EMPLOYMENT
HEREUNDER IS TERMINATED BY THE COMPANY PURSUANT TO SECTION 2.2(B) HEREOF PRIOR
TO THE EXPIRATION OF THE EMPLOYMENT TERM, ALL OF EXECUTIVE’S RIGHTS AND BENEFITS
PROVIDED FOR IN THIS AGREEMENT WILL TERMINATE AS OF SUCH DATE; PROVIDED,
HOWEVER, THAT THE EXECUTIVE SHALL BE ENTITLED TO THE FOLLOWING:

 

(I)                                     ALL ACCRUED AMOUNTS; AND

 

(II)                                  AN AMOUNT EQUAL TO ONE-HALF OF THE
EXECUTIVE’S BASE SALARY (AS EXISTING AT THE TIME OF DISABILITY), PAYABLE IN
SUBSTANTIALLY EQUAL INSTALLMENTS IN ACCORDANCE WITH THE CUSTOMARY PAYROLL
PRACTICES OF THE COMPANY’S PROVO, UTAH OFFICES WITH RESPECT TO TIME AND MANNER
OF PAYMENT.

 

(III)                               AN AMOUNT EQUAL TO ONE-HALF OF THE
EXECUTIVE’S THEN TARGET FOR THE YEAR IN WHICH THE DISABILITY OCCURS, PAYABLE IN
SUBSTANTIALLY EQUAL INSTALLMENTS IN ACCORDANCE WITH THE CUSTOMARY PAYROLL
PRACTICES OF

 

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THE COMPANY’S PROVO, UTAH OFFICES WITH RESPECT TO TIME AND MANNER OF PAYMENT.

 

SECTION 4.3              TERMINATION AFTER CHANGE OF CONTROL.  IF, WITHIN 24
MONTHS FOLLOWING A CHANGE OF CONTROL (AS HEREINAFTER DEFINED), THE COMPANY OR
ITS SUCCESSOR TERMINATES EXECUTIVE’S EMPLOYMENT WITHOUT CAUSE OR THE EXECUTIVE
TERMINATES EMPLOYMENT AS A RESULT OF A CONSTRUCTIVE TERMINATION, EXECUTIVE WILL
BE ENTITLED TO THE FOLLOWING:

 

(I)                                     ALL ACCRUED AMOUNTS;

 

(II)                                  A LUMP SUM PAYMENT EQUAL TO TWO TIMES THE
SUM OF (X) HIS BASE SALARY FOR THE YEAR IN WHICH SUCH TERMINATION OCCURS AND (Y)
THE GREATER OF (A) THE TARGET BONUS IN EFFECT IN THE YEAR IN WHICH SUCH
TERMINATION OCCURS AND (B) THE ACTUAL TOTAL BONUS EARNED BY EXECUTIVE IN THE
YEAR IMMEDIATELY PRECEDING SUCH TERMINATION; AND

 

(III)                               EXECUTIVE WILL BE ELIGIBLE TO CONTINUE TO
PARTICIPATE IN ANY BENEFITS, PLANS AND PROGRAMS REFERENCED IN SECTION 3.2(B) FOR
A PERIOD OF TWO YEARS FROM THE DATE OF THE EXECUTIVE’S TERMINATION OF
EMPLOYMENT; PROVIDED, HOWEVER, TO THE EXTENT THAT ANY BENEFIT UNDER SECTION
3.2(B) CANNOT BE CONTINUED DURING A PERIOD WHEN EXECUTIVE IS NOT AN EMPLOYEE OF
THE COMPANY, THE COMPANY SHALL PAY EXECUTIVE AN AMOUNT IN CASH EQUAL TO THE
ECONOMIC VALUE OF SUCH BENEFIT, SUCH VALUE TO BE DETERMINED AS OF THE TIME OF
TERMINATION.  IN ADDITION, ALL STOCK OPTIONS REFERENCED IN SECTION 3.1(C) SHALL
VEST EFFECTIVE AS OF THE DATE OF TERMINATION, AND EXECUTIVE MAY EXERCISE SUCH
OPTIONS FOR A PERIOD OF THREE MONTHS FROM THE DATE OF TERMINATION.

 

For purposes of this Section, “Change of Control” means the happening of any of
the following events:

 

(I)                                     THE ACQUISITION BY ANY INDIVIDUAL,
ENTITY OR GROUP (WITHIN THE MEANING OF SECTION 13(D)(3) OR 14(D)(2) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE ACT”)) (A “PERSON”),
OF BENEFICIAL OWNERSHIP (WITHIN THE MEANING OF RULE 13D-3 PROMULGATED UNDER THE
EXCHANGE ACT) OF 50% OR MORE OF EITHER (A) THE THEN OUTSTANDING SHARES OF COMMON
STOCK OF THE COMPANY OR (B) THE COMBINED VOTING POWER OF THE THEN OUTSTANDING
VOTING SECURITIES OF THE COMPANY ENTITLED TO VOTE GENERALLY IN THE ELECTION OF
DIRECTORS; PROVIDED, HOWEVER, THAT THE FOLLOWING ACQUISITIONS SHALL NOT
CONSTITUTE A CHANGE OF CONTROL UNDER THIS SUBSECTION (I): (X) ANY ACQUISITION
DIRECTLY FROM THE COMPANY (EXCLUDING AN ACQUISITION BY VIRTUE OF THE EXERCISE OF
A CONVERSION PRIVILEGE), (Y) ANY ACQUISITION BY THE COMPANY, OR (Z) ANY
ACQUISITION BY ANY

 

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EMPLOYEE BENEFIT PLAN (OR RELATED TRUST) SPONSORED OR MAINTAINED BY THE COMPANY
OR ANY CORPORATION CONTROLLED BY THE COMPANY; OR

 

(II)                                  INDIVIDUALS WHO, AS OF THE EFFECTIVE DATE
HEREOF CONSTITUTE THE BOARD OF DIRECTORS (THE “INCUMBENT BOARD”), CEASE FOR ANY
REASON TO CONSTITUTE AT LEAST A MAJORITY OF THE BOARD; PROVIDED, HOWEVER, THAT
ANY INDIVIDUAL BECOMING A DIRECTOR SUBSEQUENT TO THE EFFECTIVE DATE HEREOF WHOSE
ELECTION, OR NOMINATION FOR ELECTION BY THE COMPANY’S STOCKHOLDERS, WAS APPROVED
BY A VOTE OF AT LEAST A MAJORITY OF THE DIRECTORS THEN COMPRISING THE INCUMBENT
BOARD SHALL BE CONSIDERED AS THOUGH SUCH INDIVIDUAL WERE A MEMBER OF THE
INCUMBENT BOARD, BUT EXCLUDING, FOR THIS PURPOSE, ANY SUCH INDIVIDUAL WHOSE
INITIAL ASSUMPTION OF OFFICE OCCURS AS A RESULT OF EITHER AN ACTUAL OR
THREATENED ELECTION CONTEST (AS SUCH TERMS ARE USED IN RULE 14A-11 OF REGULATION
14A PROMULGATED UNDER THE EXCHANGE ACT) OR OTHER ACTUAL OR THREATENED
SOLICITATION OF PROXIES OR CONSENTS BY OR ON BEHALF OF A PERSON OTHER THAN THE
BOARD; OR

 

(III)                               APPROVAL BY THE STOCKHOLDERS OF THE COMPANY
OF A COMPLETE LIQUIDATION OR DISSOLUTION OF THE COMPANY OR THE SALE OR OTHER
DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY.

 

SECTION 4.4              TERMINATION BY THE COMPANY WITHOUT CAUSE, BY THE
EXECUTIVE AS THE RESULT OF A CONSTRUCTIVE TERMINATION, OR BY THE EXECUTIVE DUE
TO A BREACH OF AGREEMENT BY THE COMPANY.  IF EXECUTIVE’S EMPLOYMENT HEREUNDER IS
TERMINATED BY THE COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE AS THE RESULT OF A
CONSTRUCTIVE TERMINATION, IN EITHER CASE OTHER THAN WITHIN 24 MONTHS FOLLOWING A
CHANGE OF CONTROL, OR BY THE EXECUTIVE PURSUANT TO THE PROVISIONS SET FORTH IN
SECTION 2.3(A) HEREOF PRIOR TO THE EXPIRATION OF THE THEN CURRENT EMPLOYMENT
TERM OF THIS AGREEMENT, THE EXECUTIVE SHALL BE ENTITLED TO THE FOLLOWING:

 

(I)                                     ANY ACCRUED AMOUNTS; AND

 

(II)                                  SEVERANCE BENEFITS (AS DEFINED BELOW) FOR
A PERIOD OF TIME EQUAL TO THE LONGER OF (X) TWO YEARS AND (Y) THE PERIOD OF TIME
REMAINING UNDER THE THEN EMPLOYMENT TERM (SUCH LONGER PERIOD, THE “SEVERANCE
PERIOD”).

 

(III)                               EXECUTIVE SHALL CONTINUE TO PARTICIPATE IN
ANY BENEFITS REFERENCED IN SECTION 3.2(B) FOR THE SEVERANCE PERIOD; PROVIDED,
HOWEVER, TO THE EXTENT THAT ANY BENEFIT UNDER SECTION 3.2(B) CANNOT BE CONTINUED
DURING A PERIOD WHEN EXECUTIVE IS NOT AN EMPLOYEE OF THE COMPANY, THE COMPANY
SHALL PAY EXECUTIVE AN AMOUNT IN CASH EQUAL TO THE ECONOMIC VALUE OF SUCH
BENEFIT, SUCH VALUE TO BE DETERMINED AS OF THE TIME OF TERMINATION. IN ADDITION,
ALL STOCK OPTIONS REFERENCED IN SECTION 3.1(C) SHALL VEST EFFECTIVE AS

 

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OF THE DATE OF TERMINATION, AND EXECUTIVE MAY EXERCISE SUCH OPTIONS FOR A PERIOD
OF THREE MONTHS FROM THE DATE OF TERMINATION.

 

“SEVERANCE BENEFITS” SHALL MEAN AN AMOUNT EQUAL TO (I) THE EXECUTIVE’S BASE
SALARY FOR THE YEAR IN WHICH SUCH TERMINATION OCCURS AND (II) THE GREATER OF (A)
THE TARGET BONUS FOR THE YEAR IN THE YEAR IN WHICH SUCH TERMINATION OCCURS AND
(B) THE ACTUAL BONUS EARNED BY EXECUTIVE IN THE YEAR IMMEDIATELY PRECEDING SUCH
TERMINATION.  SEVERANCE BENEFITS SHALL BE PAID TO THE EXECUTIVE IN SUBSTANTIALLY
EQUAL INSTALLMENTS IN ACCORDANCE WITH THE CUSTOMARY PAYROLL PRACTICES OF THE
COMPANY’S SALT LAKE CITY, UTAH OFFICES WITH RESPECT TO TIME AND MANNER OF
PAYMENT.

 

SECTION 4.5              TERMINATION BY THE EXECUTIVE WITHOUT CONSTRUCTIVE
TERMINATION OR TERMINATION BY THE COMPANY FOR CAUSE.  IN THE EVENT THAT THE
EXECUTIVE’S EMPLOYMENT WITH THE COMPANY IS TERMINATED FOR CAUSE, AS DEFINED BY
SECTION 2.2(C), OR THE EXECUTIVE ‘S EMPLOYMENT HEREUNDER SHALL BE TERMINATED BY
EXECUTIVE PURSUANT TO THE PROVISIONS SET FORTH IN SECTION 2.3(C) HEREOF PRIOR TO
THE EXPIRATION OF THE THEN CURRENT EMPLOYMENT TERM, THEN, UPON SUCH TERMINATION,
THE COMPANY SHALL PAY THE EXECUTIVE ALL ACCRUED AMOUNTS AND ALL BENEFITS TO
EXECUTIVE HEREUNDER SHALL TERMINATE CONTEMPORANEOUSLY WITH THE TERMINATION OF
SUCH EMPLOYMENT.  EXECUTIVE SHALL NOT RECEIVE A BONUS FOR THE YEAR DURING WHICH
EXECUTIVE’S EMPLOYMENT TERMINATED OR ANY SUBSEQUENT YEAR AND THE COMPANY SHALL
HAVE NO FURTHER LIABILITY HEREUNDER.

 

SECTION 4.6              NON-RENEWAL OF AGREEMENT BY THE COMPANY OR THE
EXECUTIVE.  IF THE AGREEMENT IS NOT RENEWED BY THE COMPANY OR THE EXECUTIVE AT
THE END OF THE INITIAL EMPLOYMENT TERM OR AN ADDITIONAL TERM IN ACCORDANCE WITH
SECTION 2.1 ABOVE, THE EXECUTIVE SHALL BE ENTITLED TO RECEIVE, AS SOON AS
PRACTICABLE FOLLOWING THE END OF THE EMPLOYMENT TERM, ALL ACCRUED AMOUNTS UNDER
THE AGREEMENT (THROUGH THE END OF THE INITIAL EMPLOYMENT TERM OR, IF APPLICABLE,
THE THEN ADDITIONAL TERM).

 

SECTION 4.7              GROSS-UP PAYMENT.

 

(A)                                  IN THE EVENT THAT THE EXECUTIVE SHALL
BECOME ENTITLED TO PAYMENTS AND/OR BENEFITS PROVIDED BY THIS AGREEMENT OR ANY
OTHER AMOUNTS IN THE “NATURE OF COMPENSATION” (WHETHER PURSUANT TO THE TERMS OF
THIS AGREEMENT OR ANY OTHER PLAN, ARRANGEMENT OR AGREEMENT WITH THE COMPANY, ANY
PERSON WHOSE ACTIONS RESULT IN A CHANGE OF OWNERSHIP OR EFFECTIVE CONTROL
COVERED BY SECTION 280G(B)(2) OF THE CODE OR ANY PERSON AFFILIATED WITH THE
COMPANY OR SUCH PERSON) AS A RESULT OF SUCH CHANGE IN OWNERSHIP OR EFFECTIVE
CONTROL (COLLECTIVELY THE “COMPANY PAYMENTS”), AND SUCH COMPANY PAYMENTS WILL BE
SUBJECT TO THE TAX (THE “EXCISE TAX”) IMPOSED BY SECTION 4999 OF THE CODE (AND
ANY SIMILAR TAX THAT MAY HEREAFTER BE IMPOSED BY ANY TAXING AUTHORITY) THE
COMPANY SHALL PAY TO THE EXECUTIVE AT THE TIME SPECIFIED IN SUBSECTION (B)
BELOW: (I) AN ADDITIONAL AMOUNT (THE “GROSS-UP PAYMENT”) SUCH THAT THE NET
AMOUNT RETAINED BY THE EXECUTIVE, AFTER DEDUCTION OF ANY EXCISE TAX ON THE
COMPANY PAYMENTS AND ANY U.S. FEDERAL, STATE, AND LOCAL INCOME OR PAYROLL TAX
UPON THE GROSS-UP PAYMENT

 

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PROVIDED FOR BY THIS PARAGRAPH (A), BUT BEFORE DEDUCTION FOR ANY U.S. FEDERAL,
STATE, AND LOCAL INCOME OR PAYROLL TAX ON THE COMPANY PAYMENTS, SHALL BE EQUAL
TO THE COMPANY PAYMENTS AND (II) AN AMOUNT EQUAL TO THE PRODUCT OF ANY
DEDUCTIONS DISALLOWED FOR FEDERAL, STATE OR LOCAL INCOME TAX PURPOSES BECAUSE OF
THE INCLUSION OF THE GROSS-UP PAYMENT IN THE EXECUTIVE’S ADJUSTED GROSS INCOME
MULTIPLIED BY THE HIGHEST APPLICABLE MARGINAL RATE OF FEDERAL, STATE OR LOCAL
INCOME TAXATION, RESPECTIVELY, FOR THE CALENDAR YEAR IN WHICH THE GROSS-UP
PAYMENT IS TO BE MADE.

 

(B)                                 SUBJECT TO THE PROVISIONS OF PARAGRAPH (C)
BELOW, ALL DETERMINATIONS REQUIRED TO BE MADE UNDER THIS SECTION, INCLUDING
WHETHER AND WHEN A GROSS-UP PAYMENT IS REQUIRED AND THE AMOUNT OF SUCH GROSS-UP
PAYMENT AND THE ASSUMPTIONS TO BE UTILIZED IN ARRIVING AT SUCH DETERMINATION,
SHALL BE MADE BY THE COMPANY’S INDEPENDENT AUDITORS OR, AT THE EXECUTIVE’S
OPTION, ANY OTHER NATIONALLY OR REGIONALLY RECOGNIZED FIRM OF INDEPENDENT
ACCOUNTANTS SELECTED BY THE EXECUTIVE AND APPROVED BY THE COMPANY, WHICH
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, (THE “ACCOUNTING FIRM”) WHICH SHALL
PROVIDE DETAILED SUPPORTING CALCULATIONS BOTH TO THE COMPANY AND EXECUTIVE.  ALL
FEES AND EXPENSES OF THE ACCOUNTING FIRM SHALL BE PAID SOLELY BY THE COMPANY. 
ANY GROSS-UP PAYMENT, AS DETERMINED PURSUANT TO THIS SECTION, SHALL BE PAID BY
THE COMPANY TO EXECUTIVE NOT LATER THAN THE DUE DATE FOR THE PAYMENT OF ANY
EXCISE TAX.  ANY DETERMINATION BY THE ACCOUNTING FIRM SHALL BE BINDING UPON THE
COMPANY AND EXECUTIVE.  AS A RESULT OF THE UNCERTAINTY IN THE APPLICATION OF
SECTION 4999 OF THE CODE AT THE TIME OF THE INITIAL DETERMINATION BY THE
ACCOUNTING FIRM HEREUNDER, IT IS POSSIBLE THAT GROSS-UP PAYMENTS WHICH WILL NOT
HAVE BEEN MADE BY THE COMPANY SHOULD HAVE BEEN MADE (“UNDERPAYMENT”), CONSISTENT
WITH THE CALCULATIONS REQUIRED TO BE MADE HEREUNDER.  IN THE EVENT THAT THE
COMPANY EXHAUSTS ITS REMEDIES PURSUANT TO PARAGRAPH (C) AND EXECUTIVE THEREAFTER
IS REQUIRED TO MAKE A PAYMENT OF ANY EXCISE TAX, THE ACCOUNTING FIRM SHALL
DETERMINE THE AMOUNT OF THE UNDERPAYMENT THAT HAS OCCURRED AND ANY SUCH
UNDERPAYMENT SHALL BE PROMPTLY PAID BY THE COMPANY TO OR FOR EXECUTIVE’S
BENEFIT.

 

(C)                                  EXECUTIVE AGREES TO NOTIFY THE COMPANY IN
WRITING OF ANY CLAIM BY THE INTERNAL REVENUE SERVICE THAT, IF SUCCESSFUL, WOULD
REQUIRE THE PAYMENT BY THE COMPANY OF THE GROSS-UP PAYMENT.  SUCH NOTIFICATION
SHALL BE GIVEN AS SOON AS PRACTICABLE BUT NO LATER THAN TEN (10) BUSINESS DAYS
AFTER EXECUTIVE IS INFORMED IN WRITING OF SUCH CLAIM AND SHALL APPRISE THE
COMPANY OF THE NATURE OF SUCH CLAIM AND THE DATE ON WHICH SUCH CLAIM IS
REQUESTED TO BE PAID.  EXECUTIVE SHALL NOT PAY SUCH CLAIM PRIOR TO THE
EXPIRATION OF THE 30-DAY PERIOD FOLLOWING THE DATE ON WHICH EXECUTIVE GIVES SUCH
NOTICE TO THE COMPANY (OR SUCH SHORTER PERIOD ENDING ON THE DATE THAT ANY
PAYMENT OF TAXES WITH RESPECT TO SUCH CLAIM IS DUE).  IF THE COMPANY NOTIFIES
EXECUTIVE IN WRITING PRIOR TO THE EXPIRATION OF SUCH PERIOD THAT IT DESIRES TO
CONTEST SUCH CLAIM, EXECUTIVE AGREES TO:

 

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(I)                                     GIVE THE COMPANY ANY INFORMATION
REASONABLY REQUESTED BY THE COMPANY RELATING TO SUCH CLAIM,

 

(II)                                  TAKE SUCH ACTION IN CONNECTION WITH
CONTESTING SUCH CLAIM AS THE COMPANY SHALL REASONABLY REQUEST IN WRITING FROM
TIME TO TIME, INCLUDING, WITHOUT LIMITATION, ACCEPTING LEGAL REPRESENTATION WITH
RESPECT TO SUCH CLAIM BY AN ATTORNEY REASONABLY SELECTED BY THE COMPANY;

 

(III)                               COOPERATE WITH THE COMPANY IN GOOD FAITH IN
ORDER TO EFFECTIVELY CONTEST SUCH CLAIM; AND

 

(IV)                              PERMIT THE COMPANY TO PARTICIPATE IN ANY
PROCEEDINGS RELATING TO SUCH CLAIM;

 

PROVIDED, HOWEVER, that the Company agrees to bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold Executive harmless, on
an after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.  Without limitation on the foregoing provisions
of this subsection (c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any
and all administrative appeals, proceedings, hearing and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs Executive to pay such
claim and sue for a refund, the Company shall advance the amount of such payment
to Executive, on an interest-free basis and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment of
taxes for Executive’s taxable year with respect to which such contested amount
is claimed to be due is limited solely to such contested amount, provided that,
to the extent the foregoing provision shall be deemed to create a loan of a
personal nature in violation of Section 402 of the Sarbanes-Oxley Act of 2002,
the provision for repayment shall be null and void.  Furthermore, the Company’s
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and Executive shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.

 

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(D)                                 IF, AFTER THE RECEIPT BY EXECUTIVE OF AN
AMOUNT ADVANCED BY THE COMPANY PURSUANT TO THIS SECTION, EXECUTIVE BECOMES
ENTITLED TO RECEIVE ANY REFUND WITH RESPECT TO SUCH CLAIM, EXECUTIVE AGREES TO
PROMPTLY PAY TO THE COMPANY THE AMOUNT OF SUCH REFUND (TOGETHER WITH ANY
INTEREST PAID OR CREDITED THEREON AFTER TAXES APPLICABLE THERETO).  IF, AFTER
THE RECEIPT BY EXECUTIVE OF AN AMOUNT ADVANCED BY THE COMPANY PURSUANT TO
SUBSECTION (D), A DETERMINATION IS MADE THAT EXECUTIVE IS NOT ENTITLED TO ANY
REFUND WITH RESPECT TO SUCH CLAIM AND THE COMPANY DOES NOT NOTIFY EXECUTIVE IN
WRITING OF ITS INTENT TO CONTEST SUCH DENIAL OF REFUND PRIOR TO THE EXPIRATION
OF THIRTY (30) DAYS AFTER SUCH DETERMINATION, THEN SUCH ADVANCE SHALL BE
FORGIVEN AND SHALL NOT BE REQUIRED TO BE REPAID AND THE AMOUNT OF SUCH ADVANCE
SHALL OFFSET, TO THE EXTENT THEREOF, THE AMOUNT OF GROSS-UP PAYMENT REQUIRED TO
BE PAID.  TO THE EXTENT THE FOREGOING PROVISION SHALL BE DEEMED TO CREATE A LOAN
OF A PERSONAL NATURE IN VIOLATION OF SECTION 402 OF THE SARBANES-OXLEY ACT OF
2002, THE PROVISION FOR REPAYMENT SHALL BE NULL AND VOID.

 

ARTICLE V

CONFIDENTIAL INFORMATION

 

SECTION 5.1              COMPANY INFORMATION.  EXECUTIVE ACKNOWLEDGES THAT THE
COMPANY’S BUSINESS IS HIGHLY COMPETITIVE AND THAT THE COMPANY’S BOOKS, RECORDS
AND DOCUMENTS, TECHNICAL INFORMATION CONCERNING ITS PRODUCTS, EQUIPMENT,
SERVICES AND PROCESSES, PROCUREMENT PROCEDURES AND PRICING TECHNIQUES AND THE
NAMES OF AND OTHER INFORMATION (E.G., CREDIT AND FINANCIAL DATA) CONCERNING THE
COMPANY’S CUSTOMERS AND BUSINESS ASSOCIATES ALL COMPRISE CONFIDENTIAL BUSINESS
INFORMATION AND TRADE SECRETS OF THE COMPANY (COLLECTIVELY, “CONFIDENTIAL
INFORMATION”) WHICH ARE VALUABLE, SPECIAL, AND UNIQUE ASSETS OF THE COMPANY
WHICH THE COMPANY USES IN ITS BUSINESS TO OBTAIN A COMPETITIVE ADVANTAGE OVER
THE COMPANY’S COMPETITORS WHICH DO NOT KNOW OR USE THIS INFORMATION. EXECUTIVE
FURTHER ACKNOWLEDGES THAT PROTECTION OF THE CONFIDENTIAL INFORMATION AGAINST
UNAUTHORIZED DISCLOSURE AND USE IS OF CRITICAL IMPORTANCE TO THE COMPANY IN
MAINTAINING ITS COMPETITIVE POSITION. ACCORDINGLY, EXECUTIVE HEREBY AGREES THAT
HE WILL NOT, AT ANY TIME DURING OR AFTER HIS EMPLOYMENT BY THE COMPANY, MAKE ANY
UNAUTHORIZED DISCLOSURE OF ANY CONFIDENTIAL INFORMATION OR MAKE ANY USE THEREOF,
EXCEPT FOR THE BENEFIT OF, AND ON BEHALF OF, THE COMPANY. FOR THE PURPOSES OF
THIS ARTICLE 5, THE TERM “COMPANY” SHALL ALSO INCLUDE AFFILIATES OF THE COMPANY.

 

SECTION 5.2              THIRD PARTY INFORMATION.  EXECUTIVE ACKNOWLEDGES THAT,
AS A RESULT OF HIS EMPLOYMENT BY THE COMPANY, HE MAY FROM TIME TO TIME HAVE
ACCESS TO, OR KNOWLEDGE OF, CONFIDENTIAL BUSINESS INFORMATION OR TRADE SECRETS
OF THIRD PARTIES, SUCH AS CUSTOMERS, SUPPLIERS, PARTNERS, JOINT VENTURERS, AND
THE LIKE, OF THE COMPANY. EXECUTIVE AGREES TO PRESERVE AND PROTECT THE
CONFIDENTIALITY OF SUCH THIRD-PARTY CONFIDENTIAL INFORMATION AND TRADE SECRETS
TO THE SAME EXTENT, AND ON THE SAME BASIS, AS THE CONFIDENTIAL INFORMATION.

 

SECTION 5.3              RETURN OF DOCUMENTS.  ALL WRITTEN MATERIALS, RECORDS
AND OTHER DOCUMENTS MADE BY, OR COMING INTO THE POSSESSION OF, EXECUTIVE DURING
THE PERIOD OF HIS EMPLOYMENT BY THE COMPANY WHICH CONTAIN OR DISCLOSE THE
CONFIDENTIAL INFORMATION SHALL BE

 

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AND REMAIN THE PROPERTY OF THE COMPANY. UPON REQUEST, AND IN ANY EVENT UPON
TERMINATION OF EXECUTIVE’S EMPLOYMENT BY THE COMPANY, FOR ANY REASON, HE
PROMPTLY SHALL DELIVER THE SAME, AND ALL COPIES, DERIVATIVES AND EXTRACTS
THEREOF, TO THE COMPANY.

 

ARTICLE VI
INVENTIONS, DISCOVERIES AND COPYRIGHTS

 

SECTION 6.1              INVENTIONS AND DISCOVERIES.  EXECUTIVE AGREES PROMPTLY
AND FREELY TO DISCLOSE TO THE COMPANY, IN WRITING, ANY AND ALL IDEAS,
CONCEPTIONS, INVENTIONS, IMPROVEMENTS, AND DISCOVERIES, WHETHER PATENTABLE OR
NOT, WHICH ARE CONCEIVED OR MADE BY EXECUTIVE, SOLELY OR JOINTLY WITH ANOTHER,
DURING THE PERIOD OF HIS EMPLOYMENT BY THE COMPANY AND WHICH ARE RELATED TO THE
BUSINESS OR ACTIVITIES OF THE COMPANY. EXECUTIVE AGREES TO ASSIGN AND HEREBY
DOES ASSIGN TO THE COMPANY ALL HIS INTEREST IN SUCH IDEAS, CONCEPTIONS,
INVENTIONS, IMPROVEMENTS, AND DISCOVERIES. EXECUTIVE AGREES THAT, WHENEVER
REQUESTED TO DO SO BY THE COMPANY, HE SHALL ASSIST IN THE PREPARATION OF ANY
DOCUMENT THAT THE COMPANY SHALL DEEM NECESSARY AND SHALL EXECUTE ANY AND ALL
APPLICATIONS, ASSIGNMENTS OR OTHER INSTRUMENTS THAT THE COMPANY SHALL DEEM
NECESSARY, IN ITS SOLE DISCRETION, TO APPLY FOR AND OBTAIN PROTECTION, INCLUDING
PATENT PROTECTION, FOR SUCH IDEAS, CONCEPTIONS, INVENTIONS, IMPROVEMENTS AND
DISCOVERIES IN ALL COUNTRIES OF THE WORLD. THE OBLIGATIONS IN THE PRECEDING
SENTENCE SHALL CONTINUE BEYOND THE TERMINATION OF EXECUTIVE’S EMPLOYMENT
REGARDLESS OF THE REASON FOR SUCH TERMINATION.

 

SECTION 6.2              COPYRIGHTS.  IF DURING EXECUTIVE’S EMPLOYMENT BY THE
COMPANY, EXECUTIVE CREATES ANY ORIGINAL WORK OF AUTHORSHIP (EACH, A “WORK”)
FIXED IN ANY TANGIBLE MEDIUM OF EXPRESSION WHICH IS THE SUBJECT MATTER OF
COPYRIGHT (E.G., WRITTEN PRESENTATIONS, COMPUTER PROGRAMS, VIDEOTAPES, DRAWINGS,
MAPS, MODELS, MANUALS OR BROCHURES) RELATING TO THE COMPANY’S BUSINESS,
PRODUCTS, OR SERVICES, WHETHER A WORK IS CREATED SOLELY BY EXECUTIVE OR JOINTLY
WITH OTHERS, THE COMPANY SHALL BE DEEMED THE AUTHOR OF A WORK IF THE WORK IS
PREPARED BY EXECUTIVE IN THE SCOPE OF HIS EMPLOYMENT; OR, IF THE WORK IS NOT
PREPARED BY EXECUTIVE WITHIN THE SCOPE OF HIS EMPLOYMENT BUT IS SPECIALLY
ORDERED BY THE COMPANY AS A CONTRIBUTION TO A COLLECTIVE WORK, AS A PART OF A
MOTION PICTURE OR OTHER AUDIOVISUAL WORK, AS A TRANSLATION, AS A SUPPLEMENTARY
WORK, AS A COMPILATION OR AS AN INSTRUCTIONAL TEXT, THEN THE WORK SHALL BE
CONSIDERED TO BE A WORK MADE FOR HIRE AND THE COMPANY SHALL BE THE AUTHOR OF THE
WORK. IN THE EVENT A WORK IS NOT PREPARED BY EXECUTIVE WITHIN THE SCOPE OF HIS
EMPLOYMENT OR IS NOT A WORK SPECIALLY ORDERED AND DEEMED TO BE A WORK MADE FOR
HIRE, THEN EXECUTIVE HEREBY AGREES TO ASSIGN, AND BY THESE PRESENTS, DOES
ASSIGN, TO THE COMPANY ALL OF EXECUTIVE’S WORLDWIDE RIGHT, TITLE AND INTEREST IN
AND TO SUCH WORK AND ALL RIGHTS OF COPYRIGHT THEREIN. BOTH DURING THE PERIOD OF
EXECUTIVE’S EMPLOYMENT BY THE COMPANY AND THEREAFTER, EXECUTIVE AGREES TO ASSIST
THE COMPANY AND ITS NOMINEE, AT ANY TIME, IN THE PROTECTION OF THE COMPANY’S
WORLDWIDE RIGHT, TITLE AND INTEREST IN AND TO THE WORK AND ALL RIGHTS OF
COPYRIGHT THEREIN, INCLUDING BUT NOT LIMITED TO, THE EXECUTION OF ALL FORMAL
ASSIGNMENT DOCUMENTS REQUESTED BY THE COMPANY OR ITS NOMINEE AND THE EXECUTION
OF ALL LAWFUL OATHS AND APPLICATIONS FOR REGISTRATION OF COPYRIGHT IN THE UNITED
STATES AND FOREIGN COUNTRIES.

 

SECTION 6.3              EXECUTIVE REPRESENTS THAT HE HAS NOT HERETOFORE MADE
ANY INVENTION OR DISCOVERY OR PREPARED ANY WORK WHICH IS THE SUBJECT MATTER OF
COPYRIGHT RELATED TO THE COMPANY’S BUSINESS WHICH HE WISHES TO EXCLUDE FROM THE
PROVISIONS OF SECTION 6.1 AND SECTION 6.2 HEREOF. AS USED IN THIS ARTICLE VI,
THE “COMPANY” SHALL INCLUDE AFFILIATES OF THE COMPANY.

 

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ARTICLE VII
NON-COMPETITION

 

SECTION 7.1              THE RESTRICTIVE COVENANTS CONTAINED IN THIS ARTICLE VII
AND IN ARTICLE VIII HEREOF ARE SUPPORTED BY CONSIDERATION TO EXECUTIVE
HEREUNDER. AS A MATERIAL INCENTIVE FOR THE COMPANY TO ENTER INTO THIS AGREEMENT,
EXECUTIVE HEREBY AGREES THAT HE WILL NOT AT ANY TIME DURING HIS EMPLOYMENT BY
THE COMPANY AND FOR A PERIOD COMMENCING ON THE DATE OF TERMINATION OF HIS
EMPLOYMENT AND CONTINUING UNTIL THE EXPIRATION OF 24 MONTHS (THE
“NON-COMPETITION PERIOD”), DIRECTLY OR INDIRECTLY, FOR HIMSELF OR FOR OTHERS, IN
ANY STATE OF THE UNITED STATES, OR IN ANY FOREIGN COUNTRY WHERE THE COMPANY OR
ANY OF ITS AFFILIATES IS THEN CONDUCTING ANY BUSINESS:

 

(A)                                  ENGAGE IN ANY BUSINESS THAT IS DIRECTLY
COMPETITIVE WITH ACTIVITIES CONDUCTED BY THE COMPANY (OR ANY OF THE COMPANY’S
SUBSIDIARIES OR DIVISIONS), WHICH ACTIVITIES CONDUCTED BY THE COMPANY (OR ANY OF
THE COMPANY’S SUBSIDIARIES OR DIVISIONS) REPRESENT IN THE AGGREGATE GREATER THAN
25% OF THE COMPANY’S PROFORMA CONSOLIDATED REVENUES IN THE 12 MONTHS PRIOR TO
THE EXECUTIVE’S TERMINATION OF EMPLOYMENT;

 

(B)                                 RENDER ADVICE OR SERVICES TO, OR OTHERWISE
ASSIST, ANY OTHER PERSON OR ENTITY WHO IS ENGAGED, DIRECTLY OR INDIRECTLY, IN
ANY BUSINESS THAT IS DIRECTLY COMPETITIVE WITH ACTIVITIES CONDUCTED BY THE
COMPANY (OR ANY OF THE COMPANY’S SUBSIDIARIES OR DIVISIONS), WHICH ACTIVITIES
CONDUCTED BY THE COMPANY (OR ANY OF THE COMPANY’S SUBSIDIARIES OR DIVISIONS)
REPRESENT IN THE AGGREGATE GREATER THAN 25% OF THE COMPANY’S PROFORMA
CONSOLIDATED REVENUES IN THE 12 MONTHS PRIOR TO THE EXECUTIVE’S TERMINATION OF
EMPLOYMENT; OR

 

(C)                                  TRANSACT ANY BUSINESS IN ANY MANNER
PERTAINING TO SUPPLIERS OR CUSTOMERS OF THE COMPANY OR ANY AFFILIATE WHICH, IN
ANY MANNER, WOULD HAVE, OR IS LIKELY TO HAVE, AN ADVERSE EFFECT UPON THE COMPANY
OR ANY AFFILIATE.

 

The foregoing shall not prohibit Executive’s continued participation in those
activities in which he is engaged on the date hereof and which have been
disclosed to the Company.

 

Section 7.2              Executive understands that the foregoing restrictions
may limit his ability to engage in a business similar to the Company’s business
in specific areas of the world for the Non-Competition Period, but acknowledges
that he will receive sufficiently high remuneration and other benefits from the
Company hereunder to justify such restriction. In addition to any remedies
provided under applicable law, the Company and Executive agree that during the
period the Company is paying compensation and benefits to Executive pursuant to
Articles III or IV hereof, the Company’s remedy for breach of the provisions of
this Article VII shall include, but shall not be limited to, the termination of
all compensation and all benefits to Executive otherwise provided under this
Agreement to the extent permitted under applicable law.

 

Section 7.3              It is expressly understood and agreed that the Company
and Executive consider the restrictions contained in Section 7.1 hereof to be
reasonable and

 

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necessary for the purposes of preserving and protecting the good will and
proprietary information of the Company, nevertheless, if any of the aforesaid
restrictions is found by a court having jurisdiction to be unreasonable, over
broad as to geographic area or time or otherwise unenforceable, the parties
intend for the restrictions therein set forth to be modified by such court so as
to be reasonable and enforceable and, as so modified by the court, to be fully
enforced.

 

ARTICLE VIII

SOLICITATION OF EMPLOYEES

 

During the Employment Term (including any Additional Term) and thereafter during
the Non-Competition Period, Executive shall not, directly or indirectly, on his
own behalf or on behalf of any other person, partnership, entity, association,
or corporation, hire or seek to hire any non-clerical or non-secretarial
employee of the Company or in any other manner attempt directly or indirectly to
influence, induce, or encourage any non-clerical or non-secretarial employee of
the Company to leave the employment of the Company, nor shall he use or disclose
to any person, partnership, entity, association, or corporation any information
concerning the names, addresses or personal telephone numbers of any employees
of the Company.

 

ARTICLE IX

MISCELLANEOUS

 

SECTION 9.1              NOTICES.  FOR PURPOSES OF THIS AGREEMENT, NOTICES AND
ALL OTHER COMMUNICATIONS PROVIDED FOR HEREIN SHALL BE IN WRITING AND SHALL BE
DEEMED TO HAVE BEEN DULY GIVEN WHEN PERSONALLY DELIVERED OR WHEN MAILED BY
UNITED STATES REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE
PREPAID, ADDRESSED AS FOLLOWS:

 

If to the Company to:

INVESTools Inc.
5959 Corporate Drive, Suite 2000
Houston, TX 77036
Attention: Chairman of the Compensation Committee

 

 

If to Executive to:

Lee K. Barba
P.O. Box 587
Bangall, New York 12506

 

or to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.

 

SECTION 9.2              APPLICABLE LAW, JURISDICTION AND VENUE.  THIS AGREEMENT
IS ENTERED INTO UNDER, AND SHALL BE GOVERNED FOR ALL PURPOSES BY, THE LAWS OF
THE STATE OF UTAH, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF
CONFLICTS OF LAWS. ANY SUIT BY THE COMPANY TO ENFORCE ANY RIGHT HEREUNDER OR TO
OBTAIN A DECLARATION OF ANY RIGHT OR OBLIGATION HEREUNDER MAY, AT THE SOLE
OPTION OF THE COMPANY, BE BROUGHT (I) IN ANY COURT OF COMPETENT JURISDICTION IN
THE STATE OF UTAH OR (II) IN ANY COURT OF COMPETENT JURISDICTION WHERE
JURISDICTION MAY BE HAD OVER EXECUTIVE.  EXECUTIVE HEREBY EXPRESSLY CONSENTS TO
THE JURISDICTION OF THE FOREGOING COURTS FOR SUCH PURPOSES AND TO THE
APPOINTMENT OF THE SECRETARY OF STATE FOR THE STATE OF UTAH AS HIS AGENT FOR
SERVICE OF PROCESS.

 

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SECTION 9.3              NO WAIVER.  NO FAILURE BY EITHER PARTY HERETO AT ANY
TIME TO GIVE NOTICE OF ANY BREACH BY THE OTHER PARTY OF, OR TO REQUIRE
COMPLIANCE WITH, ANY CONDITION OR PROVISION OF THIS AGREEMENT SHALL (I) BE
DEEMED A WAIVER OF SIMILAR OR DISSIMILAR PROVISIONS OR CONDITIONS AT THE SAME OR
AT ANY PRIOR OR SUBSEQUENT TIME OR (II) PRECLUDE INSISTENCE UPON STRICT
COMPLIANCE IN THE FUTURE.

 

SECTION 9.4              SEVERABILITY.  IF A COURT OF COMPETENT JURISDICTION
DETERMINES THAT ANY PROVISION OF THIS AGREEMENT IS INVALID OR UNENFORCEABLE,
THEN THE INVALIDITY OR UNENFORCEABILITY OF THAT PROVISION SHALL NOT AFFECT THE
VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS AGREEMENT, AND ALL
OTHER PROVISIONS SHALL REMAIN IN FULL FORCE AND EFFECT.

 

SECTION 9.5              COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ONE OR
MORE COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL, BUT ALL OF
WHICH TOGETHER WILL CONSTITUTE ONE AND THE SAME AGREEMENT.

 

SECTION 9.6              WITHHOLDING OF TAXES.  THE COMPANY MAY WITHHOLD FROM
ANY BENEFITS PAYABLE UNDER THIS AGREEMENT ALL FEDERAL, STATE, CITY OR OTHER
TAXES AS MAY BE REQUIRED PURSUANT TO ANY LAW OR GOVERNMENTAL REGULATION OR
RULING.

 

SECTION 9.7              HEADINGS.  THE PARAGRAPH HEADINGS HAVE BEEN INSERTED
FOR PURPOSES OF CONVENIENCE AND SHALL NOT BE USED FOR INTERPRETIVE PURPOSES.

 

SECTION 9.8              AFFILIATE.  AS USED IN THIS AGREEMENT, “AFFILIATE”
SHALL MEAN ANY PERSON OR ENTITY WHICH DIRECTLY OR INDIRECTLY THROUGH ONE OR MORE
INTERMEDIARIES OWNS OR CONTROLS, IS OWNED OR CONTROLLED BY, OR IS UNDER COMMON
OWNERSHIP OR CONTROL WITH, THE COMPANY.

 

SECTION 9.9              ASSIGNMENT.  THIS AGREEMENT, AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER, ARE PERSONAL AND NEITHER THIS AGREEMENT,
NOR ANY RIGHT, BENEFIT OR OBLIGATION OF EITHER PARTY HERETO, SHALL BE SUBJECT TO
VOLUNTARY OR INVOLUNTARY ASSIGNMENT, ALIENATION OR TRANSFER, WHETHER BY
OPERATION OF LAW OR OTHERWISE, WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER
PARTY EXCEPT THAT VESTED RIGHTS TO PAYMENT SHALL BE SUBJECT TO DEVISE, AND SHALL
DESCEND IN ACCORDANCE WITH APPLICABLE LAWS OF INHERITANCE.

 

SECTION 9.10        LEGAL FEES.  IF, PRIOR TO A CHANGE OF CONTROL, EITHER PARTY
INSTITUTES ANY LEGAL ACTION TO ENFORCE HIS OR ITS RIGHTS UNDER, OR TO RECOVER
DAMAGES FOR BREACH OF THIS AGREEMENT, THE COMPANY SHALL PAY UP TO AN AGGREGATE
OF $10,000 OF EXECUTIVE’S ACTUAL EXPENSES INCURRED IN PURSUIT OR DEFENSE OF SUCH
LEGAL ACTION; PROVIDED SUCH PROPER DOCUMENTATION SUBSTANTIATING SUCH EXPENSES
ARE PROVIDED TO THE COMPANY AND SUCH EXPENSES ARE REASONABLE.

 

IF, FOLLOWING A CHANGE OF CONTROL, EITHER PARTY INSTITUTES ANY LEGAL ACTION TO
ENFORCE HIS OR ITS RIGHTS UNDER, OR TO RECOVER DAMAGES FOR BREACH OF THIS
AGREEMENT, THE “PREVAILING PARTY” IN SUCH ACTION SHALL BE ENTITLED TO RECOVER
FROM THE OTHER PARTY ANY ACTUAL EXPENSES FOR ATTORNEY’S FEES AND DISBURSEMENTS
INCURRED BY HIM OR IT.  FOR THESE PURPOSES, A PARTY SHALL BE CONSIDERED A
“PREVAILING PARTY” IF AND ONLY IF THE PARTIES AGREE TO SUCH CHARACTERIZATION OF
A PARTY AS A “PREVAILING PARTY” OR A FINAL ORDER OF A COURT SPECIFICALLY RECITES
THAT SUCH PARTY IS A “PREVAILING PARTY.”

 

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SECTION 9.11        TERM.   TERMINATION OF THIS AGREEMENT PURSUANT TO THE
PROVISIONS OF SECTION 2.1 HEREOF SHALL NOT AFFECT ANY RIGHT OR OBLIGATION OF
EITHER PARTY HERETO WHICH IS ACCRUED OR VESTED PRIOR TO OR UPON SUCH TERMINATION
OR THE RIGHTS AND SET FORTH IN ARTICLES IV, V, VI AND VII HEREOF.

 

SECTION 9.12        ENTIRE AGREEMENT.  THIS AGREEMENT CONSTITUTES THE ENTIRE
AGREEMENT OF THE PARTIES WITH REGARD TO THE SUBJECT MATTER HEREOF, AND CONTAINS
ALL THE COVENANTS, PROMISES, REPRESENTATIONS, WARRANTIES AND AGREEMENTS BETWEEN
THE PARTIES WITH RESPECT TO EMPLOYMENT OF EXECUTIVE BY THE COMPANY. EACH PARTY
TO THIS AGREEMENT ACKNOWLEDGES THAT NO REPRESENTATION, INDUCEMENT, PROMISE OR
AGREEMENT, ORAL OR WRITTEN, HAS BEEN MADE BY EITHER PARTY, OR BY ANYONE ACTING
ON BEHALF OF EITHER PARTY, WHICH IS NOT EMBODIED HEREIN, AND THAT NO AGREEMENT,
STATEMENT, OR PROMISE RELATING TO THE EMPLOYMENT OF EXECUTIVE BY THE COMPANY,
WHICH IS NOT CONTAINED IN THIS AGREEMENT, SHALL BE VALID OR BINDING. ANY
MODIFICATION OF THIS AGREEMENT WILL BE EFFECTIVE ONLY IF IT IS IN WRITING AND
SIGNED BY THE PARTY TO BE CHARGED.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the Effective Date.

 

 

INVESTools Inc.

 

 

By:

 /s/ Stephen C. Wood

 

STEPHEN C. WOOD

CHAIRMAN, COMPENSATION COMMITTEE

INVESTOOLS, INC.

 

 

EXECUTIVE:

 

 

/s/ Lee K. Barba

 

LEE K. BARBA

 

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