EMPLOYMENT AGREEMENT
AGREEMENT, dated as of April 1, 2002, between Vital Living, Inc., a
Nevada corporation (the "Company"), and Xxxxx Xxxxxx (the "Executive").
Recitals
WHEREAS, Company is currently seeking working capital financing in
excess of $5,000,000 (the "Financing").
WHEREAS, Company, upon securing a minimum of $2,900,000 of the
Financing, or other financing acceptable to Company (such date shall be the
"Effective Date"), the Company wishes to secure the services of the
Executive, on and subject to the terms and conditions set forth in this
Agreement, and the Executive is willing to provide such services on and
subject to the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the above recitals and the mutual
promises and conditions in this Agreement, and other good and valuable
considerations, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. Term of Services. The Executive's "term of employment", as this phrase
is used throughout this Agreement, shall be for the period beginning on the
first business day following Effective Date and ending on the third
anniversary thereof, subject, however, to earlier termination as expressly
provided herein.
2. Employment. The Company shall, during the term of employment, employ the
Executive, and the Executive shall serve as, Vice President of Sales of
the Company, the Executive shall have such other functions, duties,
powers and responsibilities as the Board of Directors shall designate
from time to time which are normally associated with the position of Vice
President of Sales of business reasonably comparable to Company. During
the period of her employment hereunder, Executive shall devote such time
as may be necessary to perform her duties hereunder. The Executive
agrees, subject to her election as such and without additional
compensation, to serve as a member of any committee of the Board of
Directors of the Company to which she may be elected or appointed from
time to time. During the term hereof, Executive shall not vary the terms
of her employment with the Company, without the specific written
authorization from the Board of Directors.
3. Place of Employment. The Executive's principal place of employment shall
be 0000 Xxxxx Xxxxx Xx., Xxxxx, Xxxxxxx, and may change from time to
time, subject to such reasonable travel as the rendering of the services
hereunder may require. Company acknowledges and agrees that Executive
shall remain a resident of Los Angeles, California during the term of
employment but shall be required to reasonably provide a substantial
portion of the majority of Executive's services required hereunder in the
metropolitan Phoenix, Arizona area.
4. Compensation; Other Agreements.
4.1Base Salary. Upon successful closing of the Financing, as determined
by the Company's Board of Directors, the Company shall pay or cause
to be paid to the Executive, during the first year of the term of
employment, a base salary of $50,000 per annum (the "Base Salary")
paid monthly in equal installments on the 15th and 30th of each
month, with the last installments prorated from the Effective Date.
Executive's Base Salary shall increase to $60,000 on the first
anniversary of the Effective Date and continue for the term of this
Agreement.
4.2Reimbursement. The Company shall pay or reimburse the Executive for
all reasonable and necessary expenses incurred or paid by the
Executive in the performance of her services hereunder upon
presentation of expense statements or vouchers or such other
supporting information as the Company may customarily require of its
executives.
4.3 Vacation Policy. The Executive shall be entitled to paid vacation in
accordance with the vacation policy of the Company; provided, however, that
the Executive shall be entitled to at least two weeks paid vacation during
each year of the term of employment.
5. Non Competition During and After Term of Employment. During the
employment term, and for a period of two (2) years from the last date of
employment, Executive shall not, directly or indirectly, whether as a
partner, employee, creditor, shareholder, or otherwise, promote,
participate, or engage in any activity or other business directly
competitive with the Company's business, except with express permission
of the Board of Directors. In addition, Executive, shall not take any
action without the Company's prior written consent to establish, form, or
become employed by a competing business on termination of employment by
the Company for a period of two (2) years, Executive's failure to comply
with the provisions of the preceding sentence shall give the Company the
right (in addition to all other remedies the Company may have) to
terminate any benefits or compensation to which Executive may be
otherwise entitled following termination of this Agreement.
6. Termination by the Company. The Company may terminate this Agreement for
cause if any one or more of the following shall occur:
6.1The Executive shall die during the term of employment; provided,
however, that the Executive's beneficiaries shall be entitled to
receive her Base Salary through the last day of the month in which
her death occurs.
6.2The Executive shall become physically or mentally disabled so that
she is unable to perform her services for (i) a period of sixty (60)
consecutive days, or (ii) for shorter periods aggregating sixty (60)
days during any twelve-month period. Notwithstanding such disability
the Company shall continue to pay the Executive her Base Salary
through the date of such termination. For purposes of this Section
6.2, "physically or mentally disabled" shall mean the physical or
mental inability of Executive to perform all or substantially all of
her regular duties for the Company and effectively participate in the
business affairs of the Company. If the Executive, or her personal
representative, and the Company cannot agree on whether the Executive
is physically or mentally disabled for purposes of this Section 6.2,
the Executive, or her personal representative, and the Company shall
each designate a medically qualified arbitrator and the two (2)
arbitrators so selected shall make this determination prior to any
termination of this Agreement. If the two (2) arbitrators cannot
agree on the determination of disability within thirty (30) days of
their appointment, they shall select an independent medically
qualified arbitrator who shall unilaterally make such determination
prior to any termination of this Agreement. All arbitrators shall be
entitled to receive and rely on any medical or other advice which
they shall deem necessary and required to enable them to make their
determination and their decision shall be final and binding on the
Executive and her heirs, successors and assigns. The Executive and
the Company shall each pay the expenses for the arbitrator they
select and shall equally share the expenses of the third arbitrator,
if any.
6.3The Executive acts in a manner that provides Cause for termination.
For the purposes of this Agreement, the term "Cause" means (i) the
conviction of the Executive of any felony involving moral turpitude,
or (ii) any act of fraud, theft or embezzlement by the Executive
involving assets of the Company.
7. Termination by the Executive. The Executive may terminate this Agreement
on sixty (60) days written notice to the Company.
8. Severance. If the Company terminates this Agreement without Cause, then:
the Company shall pay the Executive a lump sum cash payment (the
"Severance Payment") equal to twelve (12) months Base Salary, payable on
the date of termination of this Agreement. If the Executive terminates
this Agreement, the Company shall pay the Executive through the last day
of employment, plus any accrued vacation or sick time.
9. Benefits. During the term of employment the Executive shall be eligible
to participate in any 401(K), pension, group insurance, hospitalization,
medical, dental, accident, disability or similar plan or program of the
Company now existing or established hereafter to the extent that she is
eligible under the general provisions hereof.
9 (a) The Company will pay the entire monthly health premium for the
executive, which will include coverage for her immediate family (wife
and children). The Executive will be responsible for any co-pays or
deductibles.
10.Notices. All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall
be deemed to have been duly given if delivered personally or sent by
reputable overnight courier, prepaid, or mailed first-class, postage
prepaid, by registered or certified mail, as follows (or to such other or
additional address as either party shall designated by notice in writing
to the other in accordance herewith):
(i) If to the Company:
Vital Living, Inc
0000 Xxxxx Xxxxx Xx.
Xxxxx, XX 00000
(ii) If to the Executive, to the address set forth on the records of the
Company. With a copy to:
Xxxxx Xxxxx, Esq.
Xxxxx Xxxxx, A Professional Corporation
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000-0000
11.Nonsolicitation. During the term of this Agreement and for a period of
three (3) years after its termination, Executive will not (a) directly or
indirectly recruit, solicit or otherwise influence any member of the
Company, or any distributor of the Company to discontinue any
relationship with the Company; (b) employ or seek to employ, or cause or
permit any business which competes directly or indirectly with the
Company (the "Competitive Business") to employ or seek to employ for any
Competitive Business any person who is then (or was at any time within
six months prior to the date Executive or the Competitive Business
employs or seeks to employ such person) a distributor for the Company; or
(c) interfere with, or disrupt or attempt to disrupt any past, present or
prospective relationship, contractual or otherwise, between the Company
and any customer, employee, distributor or agent of the Company.
12.Non-Disclosure of Information. The Executive acknowledges that the
databases of the Company (collectively, the "Proprietary Information")
are valuable, special and unique assets of the Company, access to and
knowledge of which are essential to the performance of the Executive
hereunder. In light of the highly competitive nature of the industry in
which the Company's business is, the Executive agrees that all
Proprietary Information, heretofore or in the future obtained by the
Executive as a result of the Executive's association with the Company,
shall be considered confidential.
In recognition of this fact, the Executive agrees that the Executive will
never use or disclose any of such Proprietary Information for the
Executive's own purposes or for the benefit of any person or other entity
or organization (except the Company) under any circumstances unless such
Proprietary Information has been publicly disclosed generally or, unless
upon written advice of legal counsel reasonably satisfactory to the
Company, the Executive is legally required to disclose such Proprietary
Information.
13.General.
13.1 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
Arizona applicable to agreements made and to be performed entirely in
Arizona.
13.2 Captions. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning
or interpretation of this Agreement.
13.3 Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject
matter hereof and supersedes all prior agreements, arrangements and
understandings, written or oral, between the parties.
13.4 Representations. The Company represents and warrants to the
Executive that this Agreement is legal, valid and binding on the
Company, enforceable in accordance with its terms. No representation,
promise or inducement has been made by either party that is not
expressly stated in this Agreement, and neither party shall be bound
by or be liable for any alleged representation, promise or inducement
not so set forth.
13.5 Assignment. This Agreement and the Executive's rights and
obligations hereunder may not be assigned by the Executive. This
Agreement will be binding on any successors or assigns of the
Company.
13.6 Amendments; Waivers. This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants
hereof may be waived only by written instrument executed by both of
the parties hereto, or in the case of a waiver, by the party waiving
compliance. The failure of either party at any time or times to
require performance of any provision hereof shall in no manner affect
such party's right at a later time to enforce the same. No waiver by
either party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of
any other terms or covenant contained in this Agreement.
13.7 Beneficiaries. Whenever this Agreement provides for any payment
to the Executive's estate, such payment may be made instead to such
beneficiary or beneficiaries as the Executive may designate in
writing filed with the Company. The Executive shall have the right
to revoke any such designation and to redesignate a beneficiary or
beneficiaries by written notice to the Company (and to any applicable
insurance company) to such effect.
13.8 Validity; No Mitigation. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall
remain in full force and effect. In the event of the termination of
this Agreement by the Executive pursuant to Section 6, the Executive
shall not be required to seek other employment in order to mitigate
her damages hereunder, and, regardless of the period with respect to
which paid, no compensation or other payments from any other
employment, services or activity of the Executive shall be applied by
the Company in reduction of or be payable or paid by the Company
pursuant to this Agreement.
13.9 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 shall constitute one and the same instrument.
13.10 Resolution of Disputes. Any dispute or controversy arising with
respect to this Agreement may be referred by either party to
JAMS/ENDISPUTE for resolution in JAMS/ENDISPUTE. Any such
proceedings shall take place in Arizona before an arbitrator
appointed in accordance with the procedures of JAMS/ENDISPUTE. The
resolution of any such dispute or controversy by such arbitrator
shall be final and binding. Judgment upon the award rendered by such
arbitrator may be entered in any court having jurisdiction thereof,
and the parties consent to the jurisdiction of the Arizona state
courts for this purpose. The prevailing party shall be entitled to
recover the costs of arbitration (including reasonable attorneys'
fees and the fees of experts) from the losing party. If at the time
any dispute or controversy arises with respect to this Agreement,
JAMS/ ENDISPUTE is not in business or is no longer providing
arbitration services, then the American Arbitration Association shall
be substituted for JAMS/ENDISPUTE for the purposes of the foregoing
provisions of this section.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
COMPANY
Vital Living, Inc., a Nevada corporation
By:/s/ Xxxx Xxxxx
Xxxx Xxxxx, CEO
EXECUTIVE
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
