golden_8k-madsen.htm


    Exhibit
10.3 

    
 

    EXECUTIVE
EMPLOYMENT AGREEMENT

    


                 
THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”), effective October __, 2009
(“Effective Date”), is made between Golden Eagle International, Inc., a Colorado
corporation (“Employer”), and Tracy A. Madsen (“Executive”), but the
effectiveness of its terms is subject to approval by the shareholders of the
Employer as set forth in Section 22, below.

     

    RECITALS

     

    WHEREAS, the Board of
Directors of Employer desires to provide for the continued employment of
Executive.  Executive is willing to commit himself to continue to
serve Employer, on the terms and conditions herein provided, although this
Agreement may be amended at any time by written agreement among the parties;
and

     

    WHEREAS, in order to effect
the foregoing, Employer and Executive wish to enter into this Agreement on the
terms and conditions set forth below.

     

    AGREEMENT

     

    NOW, THEREFORE, in
consideration of the mutual covenants herein contained, and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties agree as follows:

     

    1.           Employment.  Employer
hereby employs Executive, and Executive agrees to be employed as Vice President
for U.S. Administration and Chief Financial Officer.  Executive will
report to the President and Chief Executive Officer.  Changes may be
made from time to time by Employer, in its sole discretion, to the duties,
reporting relationships and title of Executive.  Executive will devote
full time and attention to achieving the purposes and discharging the
responsibilities of his position.  Executive will comply with all
rules, policies and procedures of Employer as modified from time to time,
including without limitation, rules and procedures set forth in the Employer’s
employee manuals and handbooks, supervisor’s manuals and operating
manuals.  Executive will perform all of Executive’s responsibilities
in compliance with all applicable laws and will ensure that the operations that
Executive manages are in compliance with all applicable laws.  During
Executive’s employment, Executive will not engage in any other business activity
that, in the reasonable judgment of the Board of Directors, conflicts with the
duties of Executive under this Agreement, whether or not such activity is
pursued for gain, profit or other pecuniary advantage.

     

    2.           Term of
Employment.  The term of employment (“Term”) shall be for three
years from the Effective Date unless terminated earlier in accordance with the
terms and conditions of this Agreement or unless the shareholders of the
Employer do not approve this Agreement by not later than October 7, 2010 as
required by Section 22 hereof (at which time this Agreement will terminate
automatically without liability of either the Employer to the Executive or the
Executive to the Employer if the shareholders of the Employer have not approved
its terms by such date).  Assuming the approval by the shareholders of
the terms of this Agreement, following expiration of the Term as set forth above
the Term of this Agreement will automatically renew for successive one-year
terms unless and until the Employer or the Employee provides notice at least 60
days in advance of the expiration of the current Term that the Employer or the
Employee will not accept a renewal term.

     

     

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    3.           Compensation.  For
the duration of Executive’s employment hereunder, the Executive will be entitled
to compensation that will be computed and paid pursuant to the following
subparagraphs.

     

    3.1           Base
Salary.  Employer will pay to Executive a base salary (“Base
Salary”) at an annual rate of $110,000.00, subject to withholdings, ratably in
accordance with Employer’s policies, so long as Executive remains
employed.  Executive’s Base Salary will be reviewed annually during
the term of Executive’s employment and may be adjusted based on such
review.  Any increase made to the Base Salary shall be in the sole
discretion of Employer.  Executive’s Base Salary will not be reduced
by Employer unless a material adverse change in the financial condition or
operations of Employer has occurred or unless Executive’s responsibilities are
altered to reflect less responsibility.

     

    3.2           Discretionary Cash
Bonus.  Executive shall be eligible for a discretionary cash
bonus (“Cash Bonus”) equal to an amount as determined by the Compensation
Committee of the Board of Directors (the “Committee,” which term, when used
herein, shall include the entire Board of Directors in the absence of a
Compensation Committee) and shall be based on the condition of Employer’s
business and results of operations, the Committee’s evaluation of Executive’s
individual performance for the relevant period, and the satisfaction of goals
that may be established by the Committee.  Each Cash Bonus shall be
paid in the Committee’s discretion.

     

    3.4           Equity-based
Compensation.  Executive shall be entitled to participate in
all equity-based compensation plans offered by Employer and as determined by the
Committee.  Executive understand that as of the date of this
Agreement, the only equity-based plan offered by Employer is the Incentive Share
Option Plan.

     

    3.5           Performance
Standards.  The Executive and the Employer agree that the
Executive’s discretionary cash bonus and equity-based compensation will be based
on the Executive’s and the Employer’s achievement of performance goals that may
be established by the Committee after discussion with the Executive and his
supervisors (if any).  Until the Employer and the Committee establish
performance goals, the Executive’s discretionary cash bonus and equity based
compensation will be wholly discretionary.

     

    4.           Other
Benefits.

     

    4.1           Certain
Benefits.  Executive will be eligible to participate in all
employee benefit programs established by Employer that are applicable to
management personnel on a basis commensurate with Executive’s position and in
accordance with Employer’s policies from time to time, but nothing herein shall
require the adoption or maintenance of any such plan.  Notwithstanding
the foregoing, Employer shall provide full medical and dental insurance coverage
for Executive.  Employer shall also provide to Executive one parking
space near Employer’s corporate office on a yearly basis, and Employer will pay
all related parking fees.

     

     

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    4.2           Vacations, Holidays and
Expenses.  For the duration of Executive’s employment
hereunder, Executive will be provided such holidays, sick leave and vacation as
Employer makes available to its management level employees
generally.  Employer will reimburse Executive in accordance with
company policies and procedures for reasonable expenses necessarily incurred in
the performance of duties hereunder against appropriate receipts and vouchers
indicating the specific business purpose for each such expenditure.

     

    4.3           Right of
Set-off.  By accepting this Agreement, Executive consents to a
deduction from any amounts Employer owes Executive from time to time (including
amounts owed to Executive as wages or other compensation, fringe benefits, or
vacation pay, as well as any other amounts owed to Executive by Employer), to
the extent of the amounts Executive owes to Employer.  Whether or not
Employer elects to make any set-off in whole or in part, if Employer does not
recover by means of set-off the full amount Executive owes it, calculated as set
forth above, Executive agrees to pay immediately the unpaid balance to
Employer.

     

    5.           Termination
or Discharge By Employer.

     

                                  
5.1           For Cause.  Employer
will have the right to immediately terminate Executive’s services and this
Agreement for “Cause.”  “Cause” shall be determined in the discretion
of Employer, and shall mean Executive:  (i) has engaged in gross
negligence,  incompetence or willful misconduct in the performance of
his duties, (ii) has refused, without proper reason, to perform his duties,
(iii) has willfully engaged in conduct that is materially injurious to Employer
or its subsidiaries (monetarily or otherwise), (iv) has committed an act of
fraud, embezzlement or willful breach of a fiduciary duty to Employer or an
affiliate (including the unauthorized disclosure of Confidential Information, as
such term is defined in Section 8 of this Agreement, or the unauthorized
disclosure of proprietary material information of Employer or an affiliate) or,
(v) has been convicted of (or pleaded no contest to) a crime involving fraud,
dishonesty or moral turpitude or any felony.

     

    Upon termination of Executive’s
employment hereunder for Cause, Executive will have no rights to any unvested
benefits or any other compensation or payments after the termination
date.

     

    5.2           Without Cause, Death, or
Disability.  Employer may terminate Executive’s employment
under this Agreement without Cause and without advance notice; provided, however, that if the
termination by Employer without Cause is prior to expiration of the original
term, or if Executive’s employment is terminated by Executive’s death or
disability, Employer will pay, as severance pay, Executive’s Base Salary at the
rate in effect on the termination date for a period of 6 months, plus one month
for each year that Executive has been with the Company, or through expiration of
the original term, whichever is a shorter period of time; provided,
however, that in any event the Executive shall be entitled to a minimum
of 6 months of severance pay.

     

     

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    (a)           Such
payments will be made no later than 60 days following the date of Termination of
Executive, and will be subject to all appropriate deductions and
withholdings.  Upon termination of Executive without Cause or for
death or disability, all unvested benefits (whether equity or cash benefits and
bonuses) previously granted to the Executive will vest immediately upon such
termination.

     

    (b)           For
purposes of this Agreement, “disability” means the incapacity or inability of
Executive, whether due to accident, sickness or otherwise, as determined by a
medical doctor acceptable to the Board of Directors of Employer and confirmed in
writing by such doctor, to perform the essential functions of Executive’s
position under this Agreement, with or without reasonable accommodation for an
aggregate of 90 days during any period of 180 consecutive days, or such longer
period as may be required under applicable law.

     

    (c)           Notwithstanding
the foregoing, in the event of a termination by Employer without Cause during
the 12-month period following a “Change of Control,” as defined under Section
6.2 below, then the compensation to Executive provided under Section 6.2 shall
govern. The Executive agrees that his eligibility to receive any and all amounts
described in this Section 5.2 shall be subject to and contingent upon the
Executive’s execution of a full and complete general release in favor of
Employer and its affiliated persons and entities, reasonably satisfactory to
Employer in its sole discretion.

     

    6.           Termination
By Executive.

     

    6.1           Termination By Executive for Good
Reason.  Executive shall have the right to terminate this
Agreement for “Good Reason.”  “Good Reason” shall mean any one of the
conditions set forth below, provided that Executive must provide notice to the
Employer within ninety (90) days of the existence of such condition and the
Employer will have thirty (30) days from receipt of such notice to remedy the
condition.  If the condition is not remedied within such 30 day
period, the following conditions will constitute “Good Reason”:

     

    
      	
               
      

            	
              (i)  Employer’s
      material breach of the terms of this Agreement or any other written
      agreement between Executive and
Employer;

            


    

    


    
      	
               
      

            	
              (ii)
      the assignment to Executive (without the Executive’s consent) of any
      duties that are substantially inconsistent with or materially diminish
      Executive’s position, as such position was defined on the Effective Date
      of this Agreement or immediately prior to a Change of Control, as such
      term is defined in Section 6.2 of this Agreement;
  or

            


    

    


    
      	
               
      

            	
              (iii)
      a requirement that Executive (without the Executive’s consent) be based at
      any office or location more than 50 miles from Executive’s primary work
      location, as such position was defined on the Effective Date of this
      Agreement or immediately prior to a Change of Control, as such term is
      defined in Section 6.2 of this Agreement (not including reasonable travel
      by the Executive consistent with the travel obligations of similar
      executives holding similar positions with similar
      responsibilities).

            


    

     

     

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    In the event Executive terminates this
Agreement for Good Reason, compensation shall be provided to the Executive in
such amounts and on such terms as set forth in Section 6.2 of this
Agreement.  Notwithstanding the foregoing, in the event that the
Executive’s employment is terminated for any reason other than for Cause or as a
result of the Executive’s death or disability (and for clarity, shall include
termination by Executive for Good Reason), during the 12-month period following
a Change of Control, then the compensation to Executive provided under Section
6.2 shall govern.

     

    6.2           Termination by Executive due to
Change of Control.  For purposes of this Agreement, a “Change
of Control” shall mean the happening of any of the following:

     

    (i) Any
“Person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) is or becomes the
“Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of Employer representing more than 50% of the total
voting power represented by Employer’s then outstanding voting securities without the approval of not
fewer than two-thirds of the Board of Directors of Employer voting on such
matter, unless the Board of Directors specifically designates such acquisition
to be a change of control;

     

    (ii) A
merger or consolidation of Employer whether or not approved by the Board of
Directors of Employer, other than a merger or consolidation that would result in
the voting securities of Employer outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
or into voting securities of the surviving entity) at least 50% of the total
voting power represented by the voting securities of Employer or such surviving
entity outstanding immediately after such merger or consolidation, or the
shareholders of Employer approve a plan of complete liquidation of Employer or
an agreement for the sale or disposition by Employer of all or substantially all
of Employer’s assets; or

     

    (iii) As
result of the election of members to the Board of Directors, a majority of the
Board of Directors consists of persons who are not members of the Board of
Directors as of the Effective Date (including Executive as a member of the Board
of Directors as of the Effective Date), except in the event that such slate of
directors is proposed by the Committee.

     

    In the
event that Executive’s employment is terminated for any reason (not including,
however, a termination by the Employer for Cause or a termination as a result of
the Executive’s death or disability (and for clarity, shall include termination
by Executive for Good Reason)) during the 12-month period following a Change of
Control, Employer shall pay Executive, within 60 days following the date of such
termination, a cash severance payment in a lump sum in an amount equal to that
severance pay to which Executive would be entitled under 5.2, or 1 times the sum
of (a) the current annual base salary of the Executive and (b) the amount of the
most recent discretionary bonus paid to the Executive pursuant to Section 3.2 of
this Agreement less applicable withholding, whichever sum is
greater.  In addition, in the event of a Change of Control, all of
Executive’s equity-based compensation shall immediately vest regardless whether
the Executive is retained by the Employer or successor following the Change of
Control.

     

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    7.           Covenant Not To
Compete.  A restricted period (“Restricted Period”) shall exist
during Executive’s continued employment hereunder and during the twelve-month
period following termination of Executive’s employment for any reason other than
a Change of Control, Termination By Executive For Good Reason, or Termination by
the Employer Without Cause or for Disability, in which case the Restricted
Period is six months.  During this Restricted Period, Executive shall
not, without the prior written consent of Employer, directly or indirectly
engage in or become associated with a Competitive Activity.  For
purposes of this Agreement: (i) a “Competitive Activity” means, as of the
Termination Date, any business or other endeavor of a kind being conducted by
Employer or any of its subsidiaries or affiliates (or demonstrably anticipated
by Employer or its subsidiaries or affiliates) in a geographic area that is
within ten miles of (a) any property that is owned, leased or controlled by
Employer at any time during the term of this Agreement or (b) any oil or gas or
other mineral prospect that the Employer is evaluating or seeking to acquire an
interest in at the time of termination of the Executive’s employment; and (ii)
Executive shall be considered to have become “associated with a Competitive
Activity” if Executive becomes directly or indirectly involved as an owner,
principal, employee, officer, director, independent contractor, representative,
stockholder, financial backer, agent, partner, advisor, lender, or in any other
individual or representative capacity with any individual, partnership,
corporation or other organization that is engaged in a Competitive
Activity.  Notwithstanding the foregoing, Executive may make and
retain investments during the Restricted Period, for investment purposes only,
in less than 5% of the outstanding capital stock of any publicly-traded
corporation engaged in a Competitive Activity if stock of such corporation is
either listed on a national stock exchange or on the OTC Bulletin Board if
Executive is not otherwise affiliated with such corporation. The Executive’s
ownership of interests in properties producing oil and gas or minerals, or
milling operations (whether a working interest, royalty interest, or other
interest) acquired prior to the date hereof is not considered a Competing
Activity.

     

    Employer and Executive agree to the
following: this provision does not impose an undue hardship on Executive and is
not injurious to the public; this provision is necessary to protect the business
of Employer and its affiliates; the nature of Executive’s responsibilities with
Employer under this Agreement require Executive to have access to Confidential
Information, as such term is defined in Section 9 of this Agreement, which is
valuable and confidential to all of the business; the scope of this Section 7 is
reasonable in terms of length of time and geographic scope; and adequate
consideration supports this Section 7, including consideration
herein.

     

    In the event that any of the covenants
in this Section 7 shall be determined by any court of competent jurisdiction to
be unenforceable by reason of extending for too great a period of time or over
too great a geographical area or by reason of being too extensive in any other
respect, it shall be interpreted to extend over the maximum period of time for
which it may be enforceable and to the maximum extent in all other respects as
to which it may be enforceable, and enforced as so interpreted, all as
determined by such court in such action.  Executive acknowledges the
uncertainty of the law in this respect and expressly stipulates that this
Agreement is to be given the construction that renders its provisions valid and
enforceable to the maximum extent (not exceeding its express terms) possible
under applicable law.

     

     

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    8.           Non-solicitation.  Executive
agrees that (i) during the twelve-month period following the termination of the
Executive’s employment, Executive shall not, without the prior written consent
of Employer, directly or indirectly, hire, recruit or solicit the employment or
services of (whether as an employee, officer, director, agent, consultant or
independent contractor), or encourage to change such person’s relationship with
Employer or any of its subsidiaries or affiliates, any employee, officer,
director, agent, consultant or independent contractor of Employer or any of its
subsidiaries or affiliates, provided, however, that a
general solicitation of the public for employment shall not constitute a
solicitation hereunder so long as such general solicitation is not designed to
target, or does not have the effect of targeting, any employee, officer,
director, agent, consultant or independent contractor of Employer or any of its
subsidiaries or affiliates; (ii) Executive will not convey any information
(whether confidential or otherwise) or trade secrets about any employees,
officers, directors, agents, consultants and independent contractors of Employer
or any of its subsidiaries or affiliates to any other person; and (iii) during
the Restricted Period, Executive shall not, without the prior written consent of
Employer, directly or indirectly, solicit, attempt to do business with, or do
business with any customers of, suppliers to, business partners of or business
affiliates of Employer or any of its subsidiaries or affiliates (such customers,
suppliers, partners and affiliates, collectively, “Trade Relationships”) on
behalf of any entity engaged in a Competitive Activity, or encourage (regardless
of who initiates the contact) any Trade Relationship to use the services of any
competitor of Employer or its subsidiaries or affiliates, or encourage any Trade
Relationship to change its relationship with Employer or its subsidiaries or
affiliates.

     

    9.           Confidentiality. Executive
acknowledges that, during the course of Executive’s employment with Employer,
Executive may have developed Confidential Information (as defined below) for
Employer, and Executive may have learned of Confidential Information developed
or owned by Employer or its affiliates or entrusted to Employer or its
affiliates by others.  Executive agrees that Executive will not,
directly or indirectly, use any Confidential Information or disclose it to any
other person or entity, except as otherwise required by law.

     

    “Confidential
Information” means any and all information relating to Employer that is not
generally known by the public or others with whom Employer does (or plans to)
compete or do business, as well as comparable information relating to any of
Employer’s affiliates.  Confidential Information includes, but is not
limited to, information relating to the terms of this Agreement, as well as
Employer’s business, technology, practices, products, marketing, sales,
services, finances, strategic opportunities, internal strategies, legal affairs
(including pending litigation), the terms of business relationships not yet
publicly known, intellectual property and the filing or pendency of patent
applications.  Confidential Information also includes, but is not
limited to, comparable information that Employer may receive or has received
belonging to customers, suppliers, consultants and others who do business with
Employer, or any of Employer’s affiliates.

     

     

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    “Confidential Information” does not
include any information that is: (i) shown to have been developed independently
by Executive prior to Executive’s employment with Employer; or (ii) required by
a judicial tribunal or similar governmental body to be disclosed under law
(provided that Executive have first promptly notified Employer of such
disclosure requirement and have cooperated fully with Employer (at Employer’s
expense) in exhausting all appeals

     

    10.           Property of
Employer.  Upon any termination from Employer, Executive agrees
to return to Employer any and all records, files, notes, memoranda, reports,
work product and similar items, and any manuals, drawings, sketches, plans, tape
recordings, computer programs, disks, cassettes and other physical
representations of any information, relating to Employer, or any of its
affiliates, whether or not constituting confidential information; and Executive
agrees to return to Employer any other property, including but not limited to a
laptop computer, belonging to Employer, no later than the date of Executive’s
termination from employment for any reason, and Executive further agrees not to
retain copies of any Confidential Information.

     

    11.           Section 280G Safe Harbor
Cap.  In the event it shall be determined that any payment or
distribution or any part thereof of any type to or for the benefit of Executive
whether pursuant to the Agreement or any other agreement between Executive and
the Employer, or any person or entity that acquires ownership or effective
control the Employer or ownership of a substantial portion of the Employer’s
assets (within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended, and the regulations thereunder (the “Code”)) whether paid or
payable or distributed or distributable pursuant to the terms of the Agreement
or any other agreement, (the “Total Payments”), is or will be subject to the
excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the
Total Payments shall be reduced to the maximum amount that could be paid to
Executive without giving rise to the Excise Tax (the “Safe Harbor Cap”), if the
net after-tax payment to Executive after reducing Executive’s Total Payments to
the Safe Harbor Cap is greater than the net after-tax (including the Excise Tax)
payment to Executive without such reduction.  The reduction of the amounts
payable hereunder, if applicable, shall be made by reducing first the payment
made pursuant to the Agreement and then to any other agreement that triggers
such Excise Tax, unless an alternative method of reduction is elected by
Executive.  All mathematical determinations, and all determinations as to
whether any of the Total Payments are “parachute payments” (within the meaning
of Section 280G of the Code), that are required to be made under this
Section 11, including determinations as to whether the Total Payments to
Executive shall be reduced to the Safe Harbor Cap and the assumptions to be
utilized in arriving at such determinations, shall be made by a nationally
recognized accounting firm selected by the Employer (the “Accounting
Firm”).  If the Accountant determines that the Total Payments to Executive
shall be reduced to the Safe Harbor Cap (the “Cutback Payment”) and it is
established pursuant to a final determination of a court or an Internal Revenue
Service (the “IRS”) proceeding which has been finally and conclusively resolved,
that the Cutback Payment is in excess of the limitations provided in
Section 6(e) (hereinafter referred to as an “Excess Payment”), such Excess
Payment shall be deemed for all purposes to be an overpayment to Executive made
on the date such Executive received the Excess Payment and Executive shall repay
the Excess Payment to the Employer on demand; provided, however, if Executive
shall be required to pay an Excise Tax by reason of receiving such Excess
Payment (regardless of the obligation to repay the Employer), Executive shall
not be required to repay the Excess Payment (if Executive has already repaid
such amount, the Employer shall refund the amount to the Executive), and the
Employer shall pay Executive an amount equal to the difference between the Total
Payments and the Shortfall Cap.

     

     

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    12.           Remedies.                      Notwithstanding
other provisions of this Agreement regarding dispute resolution, Executive
agrees that Executive’s violation of any of Sections 7, 8, 9 or 10 of this
Agreement would cause Employer irreparable harm that would not be adequately
compensated by monetary damages and that an injunction may be granted by any
court or courts having jurisdiction, restraining Executive from violation of the
terms of this Agreement, upon any breach or threatened breach of Executive of
the obligations set forth in any of the Sections 7, 8, 9 or 10.  The
preceding sentence shall not be construed to limit Employer from any other
relief or damages to which it may be entitled as a result of Employee’s breach
of any provision of this Agreement, including Sections 7, 8, 9 or
10.  Employee also agrees that a violation of any of Sections 7, 8, 9
or 10 would entitle Employer, in addition to all other remedies available at law
or equity, to recover from Executive any and all funds, including, without
limitation, wages, salary and profits, which will be held by Executive in
constructive trust for Employer, received by Executive in connection with such
violation.

     

    13.           Arbitration.  If any
dispute shall arise between Executive and Employer in connection with this
Agreement, and such dispute cannot be resolved amicably by the parties, the same
shall be conclusively and finally resolved by binding arbitration. Any party
hereto may commence an arbitration proceeding by providing written notice to the
other party requesting the arbitration of an unresolved dispute. Each such
dispute, if any, shall be submitted to an arbitrator acceptable to both parties.
If either Executive or Employer refuses or neglects to agree to appoint an
arbitrator within 30 days after receipt of written notice from the other party
requesting the other party to do so, the Judicial Arbiter Group, Inc., Denver,
Colorado (www.jaginc.com) may appoint such arbitrator. The arbitrator shall be
experienced in the subject matter of the dispute. Except as otherwise
specifically set forth herein, the arbitrators shall conduct the arbitration in
accordance with the rules of the Judicial Arbiter Group, Inc. The decision in
writing of the arbitrator, when filed with the parties hereto, shall be final
and binding on both parties. Judgment may be entered upon the final decision of
the arbitrator in any court having jurisdiction.  Such arbitration
shall take place in Denver, Colorado.

     

    14.           Fees.  Unless
otherwise agreed, the prevailing party will be entitled to its costs and
attorneys’ fees incurred in any litigation or dispute relating to the
interpretation or enforcement of this Agreement.

     

    15.           Disclosure.  Executive
agrees fully and completely to reveal the terms of this Agreement to any future
employer or potential employer of Executive and authorizes Employer, at its
election, to make such disclosure.

     

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    16.           Representation of
Executive.  Executive represents and warrants to Employer that
Executive is free to enter into this Agreement and has no contract, commitment,
arrangement or understanding to or with any party that restrains or is in
conflict with Executive’s performance of the covenants, services and duties
provided for in this Agreement.  Executive agrees to indemnify
Employer and to hold it harmless against any and all liabilities or claims
arising out of any unauthorized act or acts by Executive that, the foregoing
representation and warranty to the contrary notwithstanding, are in violation,
or constitute a breach, of any such contract, commitment, arrangement or
understanding.  Executive further represents and warrants to Employer
that Executive has consulted with his legal, tax, accounting, and investment
advisors with respect to the advisability of entering into this agreement to the
extent that the Executive has determined such consultation to be necessary or
appropriate.

     

    17.           Assignability.  During
Executive’s employment, this Agreement may not be assigned by either party
without the written consent of the other; provided, however, that Employer may
assign its rights and obligations under this Agreement without Executive’s
consent to a successor by sale, merger or liquidation, if such successor carries
on the Employer’s business substantially in the form in which it is being
conducted at the time of the sale, merger or liquidation.  This
Agreement is binding upon Executive, Executive’s heirs, personal representatives
and permitted assigns and on Employer, its successors and assigns.

     

    18.           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 EMPLOYER TO:

            	
              9661
      South 700 East

              Salt
      Lake City, UT 84070

               

            
	
              IF
      TO EXECUTIVE TO:

            	
              17
      North Foxhill Road

              North
      Salt Lake, UT 84054-3028

               

            


    

    


     

    19.           Severability.  If
any provision of this Agreement or compliance by any of the parties with any
provision of this Agreement constitutes a violation of any law, or is or becomes
unenforceable or void, then such provision, to the extent only that it is in
violation of law, unenforceable or void, shall be deemed modified to the extent
necessary so that it is no longer in violation of law, unenforceable or void,
and such provision will be enforced to the fullest extent permitted by
law.  If such modification is not possible, said provision, to the
extent that it is in violation of law, unenforceable or void, shall be deemed
severable from the remaining provisions of this Agreement, which provisions will
remain binding on the parties.

     

    20.           Waivers.  No failure
on the part of either party to exercise, and no delay in exercising, any right
or remedy hereunder will operate as a waiver thereof; nor will any single or
partial waiver of a breach of any provision of this Agreement operate or be
construed as a waiver of any subsequent breach; nor will any single or partial
exercise of any right or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right or remedy granted hereby or by
law.

     

     

    10

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    21.           Governing Law.  The
validity, construction and performance of this Agreement shall be governed by
the laws of the State of Utah without regard to the conflicts of law provisions
of such laws.

     

    22.           Board
Approval.  This Agreement was approved by the Board of
Directors of the Employer on October ___, 2009.  This Agreement is not
effective until approved by the shareholders of the Employer.

     

    23.           Entire
Agreement.  This instrument contains the entire agreement of
the parties with respect to the relationship between Executive and Employer and
supersedes all prior agreements and understandings, and there are no other
representations or agreements other than as stated in this Agreement related to
the terms and conditions of Executive’s employment.  This Agreement
may be changed only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought, and any such modification will be signed by the Chairman of the
Committee.  Upon approval by the shareholders of the Employer, all
prior agreements between the Employer and the Executive for the employment of
the Executive shall be immediately cancelled and terminated and of no further
force or effect.

     

    [Signature
Page Follows]

     

     

     

     

     

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    IN WITNESS WHEREOF, the
parties have duly signed and delivered this Agreement as of the day and year
first above written.

     

    


     


    
      	 
      	 
      
	 
      	
              EXECUTIVE:

               

              /s/ Tracy A.
      Madsen

              Tracy A. Madsen

               

               

               

              EMPLOYER:

               

              /s/  Terry C. Turner

              Terry
      C. Turner, President, Chief Executive

              Officer
      & Chairman of the Board

               

               

               

               

              EXECUTIVE:

               

              /s/ Tracy A.
Madsen

            


    

     

     

     

     

     

     

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