and Compensation Committee of the Company Board of Directors on the basis of the value of suchExecutive’s services to the Company.     6. Expense Reimbursement. The Company will reimburse the Executive, at least monthly, for allreasonable and necessary expenses, including without limitation, travel expenses, and reasonableentertainment expenses, incurred by his in carrying out his duties under this Agreement. TheExecutive shall present to the Company each month an account of such expenses in such form as isreasonably required by the Company CFO.     7. Medical and Dental Coverage. The Executive will be entitled to participate in the Company’semployee group medical and other group insurance programs on the same basis as other similarlysituated executives of the Company. Any other benefits offered to personnel in the Company similarto Executive shall also be offered to Executive upon the same terms.     8. Medical Examination. The Executive agrees to submit himself for physical examination on oneoccasion per year as and if requested by the Company; provided, however, that the Company shallbear the entire cost of such examinations.     9. Vacation Time. The Executive shall be entitled each year to a reasonable vacation inaccordance with the established practices of the Company, now or hereafter in effect for theexecutive personnel similarly situated, during which time the Executive’s compensation shall bepaid in full.     10. Benefits Payable on Disability. If the Executive becomes disabled from properly performingservices hereunder by reason of illness or other physical or mental incapacity, the Company shallcontinue to pay the Executive his then current salary hereunder for the first four(4) months ofsuch continuous disability commencing with the first date of such disability.     11. Obligations of Executive During and After Employment.     (a) The Executive agrees that during the terms of his employment under this Agreement,he will engage in no other business activities directly or indirectly, which arecompetitive with or which might place his in a competing position to that of the Company,or any affiliated company.     (b) The Executive realizes that during the course of his employment, Executive willhave produced and/or have access to confidential business plans, information, businessopportunity records, notebooks, data, formula, specifications, trade secrets, customerlists, account lists and secret inventions and processes of the Company and its affiliatedcompanies (hereinafter sometimes referred to as “Confidential Information”).Page 2 of 7
 

 
     Therefore, during or subsequent to his employment by the Company, or by an affiliatedcompany, the Executive agrees to hold in confidence and not to directly or indirectly disclose oruse or copy or make lists of any such information, except to the extent authorized by the Companyin writing. All records, files, business plans, documents, equipment and the like, or copiesthereof, relating to Company’s business, or the business of an affiliated company, which Executiveshall prepare, or use, or come into contact with, shall remain the sole property of the Company,or of an affiliated company, and shall not be removed from the Company’s or the affiliatedcompany’s premises without its written consent, and shall be promptly returned to the Company upontermination of employment with the Company and its affiliated companies. During Executive’semployment, Company maintains a right at all times, which is acknowledged by Executive, to examineall of Executive’s computer files, e-mail messages and business-related documentation onExecutive’s computer or laptop provided by the Company. The restrictions and obligations ofExecutive set forth in this Section 11(b) shall not apply to (i) information that is or becomesgenerally available and known to the industry (other than as a result of a disclosure directly orindirectly by Executive); or (ii) information that was known to Executive prior to Executive’semployment by the Company or its predecessor.     (c) Because of employment by Company, Executive shall have access to trade secrets andconfidential information about Company, its business plans, its business accounts, its businessopportunities, its expansion plans and its methods of doing business. Executive agrees that for aperiod of six (6) months after termination or expiration of employment, Executive will not,directly or indirectly, in a same or similar employment compete with Company in its then presentbusiness or anticipated lines of business in any geographic area in which Company competes or hasplanned to do business on the effective date of termination as set forth in its most recentStrategic Business Plan. Executive further agrees that he shall not have any direct or indirectcontact with any customers of the Company for the purpose of soliciting any competing business; andExecutive shall not solicit any employees of the Company to terminate their employment for anyreason, whether competitive or not.     (d) With respect to Inventions made or conceived by the Executive since the time he beganwork with the Company, whether or not during the hours of his employment or with the use of theCompany facilities, materials, or personnel, either solely or jointly with others during hisemployment by the Company or within one year after termination of such employment if based on orrelated to Confidential Information, and without royalty or any other consideration, the followingshall apply:          (i) Inventions. “Inventions” shall mean discoveries, concepts, and ideas, whether patentableor not, including, but not limited to, processes, methods, formulas, programs, and techniques, aswell asPage 3 of 7
 

 
improvements or know-how, concerning any present or prospective activities of the Company withwhich the Executive becomes acquainted as a result of his employment by the Company.          (ii) Reports. The Executive shall inform the Company promptly and fully of such Inventions bya written report, setting forth in detail the procedures employed and the results achieved. Areport will be submitted by the Executive upon completion of any studies or research projectsundertaken on the Company’s behalf, whether or not in the Executive’s opinion a given project hasresulted in an Invention.          (iii) Patents. The Executive shall apply, at the Company’s request and expense, for UnitedStates and foreign letter patent either in the Executive’s name or otherwise as the Company shalldesire.          (iv) Assignment. The Executive hereby assigns and agrees to assign to the Company all rightsto such Inventions, and to applications for United States and/or foreign letters patent and toUnited States and/or foreign letters patent granted upon such Inventions.          (v) Cooperation. The Executive shall acknowledge and deliver promptly to the Company, withoutcharge to the Company but at its expense, such written instruments and do such other acts, such asgiving testimony in support of the Executive’s inventorship, as may be necessary in the opinion ofthe Company to obtain and maintain United States and/or foreign letters patent and to vest theentire right and title thereto in the Company.          (vi) Use. The Company shall also have the royalty-free right to do business, and to make,use, and sell products, processes, and/or services derived from any inventions, discoveries,concepts, and ideas, whether or not patentable, including, but not limited to, processes, methods,formulas, and techniques, as well as improvements or know-how, whether or not within the scope ofinventions, but which are conceived or made by the Executive during the hours which he is employedby the Company or with the use or assistance of the Company’s facilities, materials, or personnel,or within the period set forth in this Section 11.     (e) In the event a court of competent jurisdiction finds any provision of this Section 11 tobe so overbroad as to be unenforceable, then such provision shall be reduced in scope by thecourt, but only to the extent deemed necessary by the court to render the provision reasonable andenforceable, it being the Executive’s intention to provide the Company with the broadestprotection possible against harmful competition.     12. No solicitation of Employees. Executive undertakes and agrees thatPage 4 of 7
 

 
during the term of this Agreement and for a period of twelve (12) months after this Agreement shallbe terminated, whether voluntarily or involuntarily, he will not, without the prior writtenapproval of the Company solicit any other employees with regard to working for a competitor.     In the event the Company shall establish to the satisfaction of a court of competentjurisdiction the existence of a breach or threatened breach by Executive of Sections 11 or 12, theCompany, in addition to any other rights and remedies it may have, shall be entitled to aninjunction restraining the Executive from doing or continuing to do any such act in violation ofthis section, as well as attorney’s fees and costs of prosecution to enforce this Agreement, if theCompany ultimately prevails on the merits.     13. Termination for Cause by the Company. The Company may, without liability, terminate theExecutive’s employment hereunder for cause at any time upon written notice from the Chief FinancialOfficer and/or CEO specifying such cause, and thereafter the Company’s obligations hereunder shallcease and terminate; provided, however, that such written notice shall not be delivered until afterthe Chief Financial Officer and/or CEO shall have given the Executive written notice specifying theconduct alleged to have constituted such cause and the Executive has failed to cure such conduct,if curable, within fifteen (15) days following receipt of such notice.     Grounds for termination “for cause” are one or more of the following:     (a) A willful breach of a material duty by the Executive during the course of hisemployment;     (b) Habitual neglect of a material duty by the Executive;     (c) Fraud on the Company, conviction of a felony involving or against the Company, orconviction of a crime of moral turpitude that affects the integrity and name of theCompany.     If applicable, Executive shall resign as a director and an officer of the Company ifterminated for cause.     14. Termination by the Executive or the Company Without Cause.     (a) The Executive, without cause, may terminate this Agreement upon 90 days priorwritten notice to the Company. In such event, the Executive shall be required to render theservices required under this Agreement during such 90-day period unless otherwise directedby the Chief Financial Officer and/or CEO. Compensation for vacation time not taken byExecutive shall be paid to the Executive at the date oftermination. Executive shall be paid for only the ninety (90) day period, if actuallyrequired to work, pursuantPage 5 of 7
 

 
to normal pay practices and then all obligations regarding pay shall cease.     (b) The Company, without cause, may terminate this Agreement. In such event, theCompany shall pay a severance allowance equal to six (6) months of the base salary payableat regular scheduled pay periods over the period. Said severance shall be subject tomitigation should Employee obtain other employment during the severance period by theamount earned by the Employee during the severance period regardless of when paid or to bepaid.     If applicable, Executive shall resign as a director and an officer of the Company andall of its subsidiaries and/or ventures if terminated by the Executive or the Companywithout Cause.     15. Termination upon Death of Executive. In addition to any other provision relating to thetermination, this Agreement shall terminate upon the Executive’s death. In such event, the Companyshall pay a severance allowance equal to six (6) months of the base salary without bonuses to theExecutive’s estate.     16. Arbitration. Any controversy, dispute or claim arising out of, or relating to, thisAgreement and/or its interpretation, except any controversy, dispute or interpretation arising outof §§11 and 12, shall, unless resolved by agreement of the parties, be settled by bindingarbitration in Charlotte, North Carolina in accordance with the Rules of the American ArbitrationAssociation then existing. This Agreement to arbitrate shall be specifically enforceable under theprevailing arbitration law of the State of North Carolina. The award rendered by the arbitrator(s)shall be final and judgment may be entered upon the award in any court of the State of NorthCarolina having jurisdiction of the matter. Any controversy or dispute involving §§11 and 12 ofthis Agreement shall be submitted to litigation in the Superior Court of Gaston County, NorthCarolina, or to the Federal Court for the Western District of North Carolina, at the discretion ofthe Plaintiff, and the employee and Company agree that venue and jurisdiction shall so lie and thatNorth Carolina law shall control such proceeding.     17. General Provisions. The Executive’s rights and obligations under this Agreement shall notbe transferable by assignment or otherwise, nor shall Executive’s rights be subject to encumbranceor to the claims of the Company’s creditors. Nothing in this Agreement shall prevent theconsolidation of the Company with, or its merger into, any other corporation, or the sale by theCompany of all or substantially all of its property or assets or assignment via reincorporation.     (a) This Agreement and the rights of Executive with respect to the benefits ofemployment referred to herein constitute the entire Agreement between the parties hereto inrespect of the employment of theExecutive by the Company and supersede any and all other agreements either oral or inwriting between the parties hereto with respect to the employment of the Executive.Page 6 of 7
 

 
     (b) The provisions of this Agreement shall be regarded as divisible, and if any of saidprovisions or any part thereof are declared invalid or unenforceable by a court of competentjurisdiction or in an arbitration proceeding, the validity and enforceability of theremainder of such provisions or parts thereof and the applicability thereof shall not beaffected thereby.     (c) This Agreement may not be amended or modified except by a written instrumentexecuted by Company and Executive.     (d) This Agreement and the rights and obligations hereunder shall be governed by andconstrued in accordance with the laws of North Carolina.     18. Construction. Throughout this Agreement the singular shall include the plural, and theplural shall include the singular, and the masculine and neuter shall include the feminine,wherever the context so requires.     19. Text to Control. The headings of paragraphs and sections are included solely forconvenience of reference. If any conflict between any heading and the text of this Agreementexists, the text shall control.     20. Authority. The officer executing this agreement on behalf of the Company has beenempowered and directed to do so by the CEO and Board of Directors of the Company.     21. Gender. In construing this Agreement, it is the parties’ intention that definitions shallbe equally applicable to both the singular and plural forms of the terms defined, and references tothe masculine, feminine or neuter gender shall include each other gender.       COMPANY: DRI CORPORATION           By /s/ KATHLEEN B. OHER            Title Chief Financial Officer          EXECUTIVE: /s/ STEPHEN P. SLAY        Page 7 of 7