CONSULTING SERVICES AGREEMENT
Consulting
Services Agreement (this “Agreement”)
dated as of October 1, 2007 (“Effective Date”)
between Advance
Display Technologies, Inc., a Colorado corporation
(the “Company”) and Dwight E. “Jody”
Thomas (“Consultant”).
WHEREAS ,
the Company develops and manufactures fiber optic display
screen systems and Light Emitting Diode (LED) display screen
systems;
WHEREAS ,
Consultant has experience in the area of display technology,
marketing and development;
WHEREAS,
the Company wishes to engage the Consultant to provide the
Services (as defined below) on the terms and conditions set
forth herein and the Consultant wishes to be so
retained;
NOW
THEREFORE , in consideration of the premises and of
the mutual covenants, conditions and agreements contained
herein, the parties agree as follows:
ARTICLE ONE
CONSULTING SERVICES
1.1
Engagement .
The Company hereby agrees to engage the Consultant to
perform the services set forth in Schedule 1 hereto (the
“Services”) for the benefit of the Company and the
Consultant agrees to perform such Services on the terms and
conditions set forth herein. Consultant shall provide a
minimum of 16 full days of Services to the Company each month. If
Consultant provides less than 16 days of Services in any calendar
month, Consultant’s compensation for such month will be
proportionately reduced to reflect the amount of Services actually
provided. If Consultant provides more than 16 days of
Services in any calendar month, Consultant will not be entitled to
additional compensation on account thereof. The Company
or Consultant may request that the Services be provided on specific
days of the month, in which case the parties shall make all
reasonable efforts to accommodate that request.
1.2
Reporting & Billing
. Consultant shall provide a monthly invoice to the
Company for the Services for each calendar month. Each
invoice shall include the amount being billed, the number of days
spent providing the Services to the Company, the dates such
services were provided, the location at which the Services were
provided and a brief description of the nature of the Services
provided that month. The Company shall have the right to
request written reports at any time during the term of this
Agreement, which shall be furnished within 30 days after such
request, describing the progress, status of, data, costs and other
matters pertaining to the Services as the Company shall request.
The Company may freely utilize all such information arising out of
the performance of the Services under this Agreement in any manner
desired.
1.3
Location . The Services shall be
performed at such place or places and at such time or times, as the
Company and Consultant shall reasonably agree.
1.4
Authorized Service Providers
. All Services shall be performed by the Consultant and
not by any other person.
1.5
Supervising Officer . The
Consultant shall report directly to the President of the
Company. Only the President of the Company may assign
tasks to the Consultant under this Agreement.
ARTICLE TWO
COMPENSATION
2.1
Compensation .
a) Cash
compensation . Beginning October 1, 2007, the
Company will pay to Consultant cash compensation of $13,500
per month.
b) Stock
Options . Consultant will be eligible to
receive, but it is not guaranteed the grant of, options to
purchase shares of the Company Common Stock in such amounts
and subject to such terms and conditions as may be determined
by the Compensation Committee of the Company’s Board of
Directors. The grant of options may be evidenced
by a separate agreement between Consultant and the
Company.
2.2
Reimbursement .
The Company will reimburse Consultant for any
reasonable expenses incurred by Consultant in connection with
Consultant’s performance of the Services, provided, however,
that any expense exceeding $500 must be pre-approved by the
Company. Reimbursement for travel related expenses will
not include routine travel to and from work. All
requests for reimbursement for expenses must be accompanied by
documentation in form and detail satisfactory to the
Company.
2.3
Invoicing .
Consultant will provide the Company with monthly
invoices for the performance of Services
hereunder. Invoices will itemize all reimbursable costs
incurred. Invoices will be payable by the Company within
thirty (30) days of receipt.
ARTICLE THREE
WARRANTIES AND COVENANTS OF CONSULTANT
3.1
Consultant’s Warranties
. The Consultant represents and
warrants:
(a) Consultant has not
entered into any agreement, whether written or oral, in
conflict with this Agreement; and
(b) Consultant has the
full power and authority to enter into this
Agreement.
3.2
Consultant’s Covenants
. Consultant:
(a) agrees that, if he is
appointed to be the Company’s Executive Vice President
of Sales and Marketing and Chief Technology Officer
(“EVP-Sales & Marketing / CTO”) by the
Company’s Board of Directors, Consultant will accept
such appointment and perform the duties and fulfill the
obligations of such position, as designated by the
Company’s Board of Directors, provided, however, that
Consultant shall remain an independent contractor of the
Company and not an employee of the
Company;
(b) shall exercise only
such powers and perform such duties as may from time to time
be vested in Consultant or assigned to Consultant by the
Company, including, in the event of his appointment as
EVP-Sales & Marketing / CTO, those powers and duties
expressly granted to him by the Company’s Board of
Directors, provided, however, that nothing herein shall be
deemed to entitle Consultant to such appointment or to such
powers or duties, since the Company may at any time, without
prior notice, remove Consultant from such position, which
removal may or may not, in the Company’s discretion,
also terminate this Agreement;
(c) shall perform the
Services for the Company to the best of Consultant’s
skill and ability;
(d) shall comply with all
standards of safety, take due regard and comply with the
safety regulations of the Company and all statutory
provisions in effect and report to the Company any incident
which could give rise to unsafe working conditions or
practices;
(e) shall not assign or
subcontract performance of this Agreement or any of the
Services to any person, firm, company or organization without
the Company’s prior written consent; and
(f) shall not, during the
term of this Agreement, enter into any other agreement,
whether written or oral, which would conflict with
Consultant’s obligations hereunder.
ARTICLE FOUR
ADDITIONAL COVENANTS OF CONSULTANT
4.1
Non-Competition;
Non-Solicitation; Non-Disparagement . Consultant
acknowledges that, in the course of Consultant’s engagement
the Company and/or its affiliates and their predecessors,
Consultant has become familiar, or will become familiar, with the
Company’s Confidential Information (including trade secrets)
and that Consultant’s services have been and will be of
special, unique and extraordinary value to the
Company. As consideration for the payment of consulting
fees under this Agreement, Consultant agrees that, during the
period of Consultant’s engagement by the Company and for
twelve (12) months after the date of termination of
Consultant’s engagement by the Company, Consultant shall not,
directly or indirectly through any other person or entity,
(a) induce any employee or contractor of the Company to leave
the employ of the Company, otherwise interfere with such
relationships or directly or indirectly hire, or participate in the
hiring of, any such employee or contractor, (b) solicit the
business (as it relates to the Company’s current business or
any business in which it becomes involved) of any client or
customer of the Company other than on behalf of the Company or
induce or attempt to induce any customer, licensee, client, vendor
or other business relation of the Company to discontinue or reduce
its business with the Company, (c) interfere with the business of
the Company, (d) engage in competition with the business of the
Company, (e) own, manage, control, participate in, consult with,
render services for or in any manner engage in or represent any
business that is competitive with the Company or any current or
prospective product or service of the Company, or (f) publicly or
privately (to any current or prospective client, competitor or
customer of the Company) disparage the Company or its
employees. It is agreed that, if for any reason a
restriction set forth in this subsection is found by any court of
competent jurisdiction to be invalid or unenforceable, such
restriction shall not be void but shall instead be interpreted and
reformed to extend over the maximum period of time, range of
activities or geographic area as to which it may be valid or
enforceable.
4.2
Confidentiality.
The Company has developed or has otherwise obtained proprietary
rights in certain design and development data, documentation,
algorithms, programs, technical descriptions, techniques,
processes, process parameters, methods, practices, designs,
specifications, materials, customer lists, supplier lists,
technical plans, business plans, implementation plans, marketing
plans, contractual information, financial information, patents,
trade secrets and other confidential information (the
“Confidential Information”) relating to the
Company’s business. Accordingly,
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1.
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Consultant
acknowledges and agrees that the Confidential Information is a
valuable proprietary asset of the Company, the design and
development of which have involved the expenditure of substantial
amounts of money and the use of substantial skills over a long
period of time.
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2.
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Consultant
agrees that disclosure by the Company to Consultant of any of the
Confidential Information, whether written, oral, or in
machine-readable form, is made in strictest confidence and
that:
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a.
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Consultant
will make best efforts to maintain the Confidential Information as
confidential and secret.
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b.
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Consultant
will not disclose the Confidential Information to any person or
entity without the prior written consent of the Company, and
without first obtaining from each such person or entity an
agreement substantially identical to this Agreement in form and
content.
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c.
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Consultant
agrees not to use the Confidential Information for any purpose
other than for the benefit of the Company.
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d.
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The
Confidential Information will, at all times, be and remain the
property of the Company.
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e.
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Any
modifications or additions to or derivation of the Confidential
Information, or any other work product produced by Consultant under
the direction of the Company, or produced in any way as a
consequence of Consultant’s engagement with the Company,
will
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