Exhibit 10.16
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the 16
day of September, 1999 by and between XxxxxXxxxx.xxx Inc. ("Company") and Xxx
Xxxxxx.
WHEREAS, the Company desires to employ Xxx Xxxxxx as the "CFO" of the Company;
WHEREAS, Xxx Xxxxxx has agreed to provide such services in accordance with the
terms and conditions of this Agreement;
NOW THEREFORE, in consideration of the mutual promises herein made and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Employment. Company shall employ Xxx Xxxxxx as CFO during the term of this
Agreement and Xxx Xxxxxx hereby accepts such employment. Xxx Xxxxxx shall be
responsible for overseeing all financial duties as related to the company, and
shall have such other duties regarding the Company as shall be determined from
time to time by the Board of Directors of the Company ("Board")..
Term of Employment. The term of employment of Xxx Xxxxxx shall be for a
term of 2 years from the date of this Agreement ("Initial Term") and shall
automatically extend for additional terms of 2 year(s)("Renewal Term") unless
this Agreement is terminated as of the last day of the Initial Term or as of the
last day of any Renewal Term upon not less than ninety (90) days prior written
notice by either party to the other, subject to earlier termination as provided
in paragraphs 4, 5, and 6 hereof.
Compensation. Base Salary. Xxx Xxxxxx shall be paid a base salary of, $72,000.00
at the annual rate of 10% in the 1st year of this Agreement; increases for the
second and third year are contingent upon review by the compensation committee,
which will be established by the Board of Directors, commencing on the date that
the Company completes full funding of the 23-27 million dollar offering of its
common stock, which offering is being made pursuant to the Company's
Registration Statement on Form SB-2 to be filed under the Securities Act of
1933, as amended, with the Securities and Exchange Commission on or about
November 1999 (the "Offering").
Cash Bonus. Xxx Xxxxxx shall be paid a cash bonus, if any, within the sole
discretion of the Board of Directors of the Company. Such bonus shall be paid
within a reasonable period of time after the Board of Directors in its
discretion awards such cash bonus.
(c) Stock Bonus. Xxx Xxxxxx shall receive a stock bonus, if any, within the sole
discretion of the Board of Directors of the Company. Such stock bonus shall be
implemented within a reasonable period of time after the Board of Directors in
its discretion awards such stock bonus.
(d) Vacation. Xxx Xxxxxx shall be entitled to paid vacation and paid Federal and
state holidays in accordance with the vacation policy of the Company then in
effect, but no less than one (1) weeks of vacation the first year. Every year
thereafter the employee will receive two (2) weeks of vacation every year up to
five years.
(e) Other Benefits. Xxx Xxxxxx shall be entitled to participate in all benefit
programs made generally available to other management employees of the Company,
on the same terms and conditions as they are offered to others, including but
not limited to medical, dental, and term life insurance benefits. Xxx Xxxxxx
shall also be provided, at Company expense, with a vehicle for business use,
including all transportation and insurance costs associated therewith.
(f) Severance Payment. In the event of the termination of Xxx Xxxxxx employment
hereunder prior to the end of the Initial Term, or any Renewal Term, by the
Company without cause (except termination upon death or total and permanent
disability) including any deemed termination by the Company as set forth in
paragraph 4(b) hereof, the Company shall pay one lump-sum severance benefits
equal to ninety (90) days of base compensation ("Severance Payment"), which
Severance Payment shall be made to Xxx Xxxxxx within fifteen (15) days of the
notice of termination of employment.
(g) Stock Option Grants/Employee Stock Ownership Plan. Xxx Xxxxxx shall be
entitled to participate and receive stock option grants from the Company's
Employee Stock Option Plan ("ESOP") during his employment with the Company, at
the discretion of the Board of Directors or committee of the Board responsible
to administer the ESOP, in amounts which are proportional to and at the same
time as option grants are made to other members of the Company's senior
management and according to terms and conditions which are comparable to such
ESOP option grants received by other members of the Company's senior management.
Termination of Employment.
Termination For Cause. The Company may terminate the employment of Xxx Xxxxxx at
any time for cause (as hereinafter defined) upon written notice. The term "for
cause" shall mean: the continued failure by Xxx Xxxxxx to substantially perform
his primary duties as Xxx Xxxxxx of the Company in a reasonable professional
manner other than due to temporary or total disability or death, after a written
demand for such substantial performance is delivered to Xxx Xxxxxx by the Board
of Directors of the Company; the unauthorized dissemination of significant trade
secrets or other proprietary property of the Company; the commission of a felony
or commission of a crime involving dishonesty or moral turpitude; the commission
of any act or acts of dishonesty which acts are intended to result or do result
directly or indirectly in gain or personal enrichment of Xxx Xxxxxx or a related
person or affiliated company or when such acts are intended to cause harm or
damages to the Company;
the continued use of alcohol so as to have an adverse effect on the
performance of his duties;
the misappropriation or embezzlement of Company assets;
the knowingly furnishing of material false reports or information to the
directors or officers of the Company; or the making of serious disparaging
remarks regarding the Company publicly or to suppliers and/or customers or
potential customers of the Company.
Default. Either party may terminate this Agreement upon the breach of any
material provision of this Agreement by the other party upon thirty (30) days
prior written notice; provided, however, that such termination notice shall not
be effective if the defaulting party corrects such default prior to the date of
termination. Termination by Xxx Xxxxxx of his employment hereunder by reason of
the default of the Company shall be deemed for all purposes of this Agreement a
termination by the Company without cause.
Disability. The Company may terminate the employment of Xxx Xxxxxx under
this Agreement by written notice upon the total and permanent disability of Xxx
Xxxxxx. Total and permanent disability shall mean the inability of Xxx Xxxxxx to
substantially perform the essential functions of his position, with or without
reasonable accommodations, due to sickness or other physical or mental
disability, for thirty (30) days in any thirty (30) day period or a period of
time which exceeds the time for medical leave provided by law, whichever period
is longer. The Company shall give Xxx Xxxxxx written notice of any termination
hereunder.
Death. The employment of Xxx Xxxxxx under this Agreement automatically
terminates upon the death of Xxx Xxxxxx.
Expense Reimbursement. Xxx Xxxxxx shall be reimbursed, upon a proper
accounting, for all expenses reasonably incurred in connection with this
employment hereunder, including all reasonable travel and entertainment expenses
pursuant to Company policy.
Confidential Information. During the Initial Term or any Renewal Term of
this Agreement, Xxx Xxxxxx shall not use or disclose to others, without the
prior written consent of the Company, any customer lists, trade secrets, secret
know-how, or other confidential information relative to the business of the
Company obtained by Xxx Xxxxxx in the course of rendering services pursuant to
this Agreement. The obligation of Xxx Xxxxxx with respect to any item of such
information shall terminate if that item of information becomes disclosed in
published literature or otherwise becomes publicly available, provided that such
public disclosure did not result, directly or indirectly, from any act or
omission of Xxx Xxxxxx. Upon the leaving the employ of the Company for any
reason, Xxx Xxxxxx shall continue to be bound by this Paragraph 8 for a period
of one (1) years, and shall not take with him any customer lists, confidential
data, or other documents and instruments which are the property of the Company.
All such data, documents and instruments and all copies thereof shall be
surrendered by Xxx Xxxxxx to the Company on or prior to the termination of his
employment.
Notices. All notices, requests, demands and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been
given when delivered by hand or upon delivery to the address set forth below, if
delivered by any other means, addressed to the party and delivered to the
address set forth below or to such other address as such party gives written
notice in substitution therefor:
Limitations.
Non-Compete. Xxx Xxxxxx agrees that during the term of his employment with
the Company hereunder and for a period of one (1) years thereafter he shall
refrain, directly and indirectly, jointly and severally, from managing,
operating, financing, participating in the ownership, management or operation of
or be employed by, consult with, advise or be otherwise engaged in any manner
with, any business engaged in the providing of services or products competitive
to those provided by the Company in any geographic area in which the Company
operates as of the date that Xxx Xxxxxx leaves the Company's employment.
Ownership of less than 5% of companies whose securities are publicly traded is
not prohibited by this Agreement.
Non-solicitation of Customers. Xxx Xxxxxx agrees that during the term of
his employment with the Company hereunder and for a period of one (1) years
thereafter he shall not, on his own behalf, or on behalf of another, directly or
indirectly, solicit, contact, call upon, communicate with or attempt to
communicate with any customer or prospective customer of the Company with a view
to the providing of services or products which are competitive with those that
are marketed or provided by the Company as of the date that Xxx Xxxxxx leaves
the Company's employment, provided that these restrictions shall apply only to
customers or prospects of the Company which have been customers or prospects
with whom Xxx Xxxxxx has had contacts on behalf of the Company.
Non-solicitation of Employees. Xxx Xxxxxx agrees that during the term of
his employment hereunder and for a period of one (1) years thereafter, Xxx
Xxxxxx will not directly or indirectly solicit or in any other manner encourage
employees of the Company to leave its employ for an engagement in any capacity
with any other company or entity.
Limitations. Notwithstanding the foregoing, the covenants of
XxxxxXxxxx.xxx Inc. pursuant to this paragraph 10 shall terminate upon the
termination of Xxx Xxxxxx employment by the Company without cause or by reason
of the Company's breach of its obligations hereunder.
Dispute Resolution. Any dispute regarding the interpretation, breach,
damages or otherwise related to the interpretation or construction of this
Agreement shall be resolved by binding arbitration before one or more
arbitrators appointed by the American Arbitration Association ("AAA") in the
city of Nashville, Tennessee, pursuant to the AAA's Commercial Arbitration
Rules. Either party may institute the action by notice to the AAA and to the
other party. Prior to the filing of any complaint with the AAA, the parties
shall meet and attempt to resolve the dispute. The cost of such arbitration
shall be borne equally by the parties. Any decision or award by said
arbitrators) shall be binding on the parties. Notwithstanding the foregoing, any
party hereto may apply to any court for a temporary or permanent injunction or
restraining order to specifically enforce any provision hereof.
Binding Effect. This Agreement shall inure to the benefit of and be
binding upon Xxx Xxxxxx and his estate and personal representatives and upon the
Company and its successors and assigns. This Agreement may not be assigned,
pledged or otherwise hypothecated by Xxx Xxxxxx.
Successors and Assigns. The Company shall cause any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the assets or outstanding securities of the Company, by
written agreement in form and substance reasonably satisfactory to counsel to
Xxx Xxxxxx to perform the obligations of the Company pursuant to this Agreement
in the same manner and to the same extent that the Company would be required to
perform if no such succession had taken place. In the event the Company has a
parent, the parent shall guaranty the obligations of the Company hereunder. The
rights and obligations of the Company under this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the Company
regardless of whether such successor or assign consents in writing thereto. The
rights of Xxx Xxxxxx hereunder shall inure to the benefit of and be enforceable
by Xxx Xxxxxx and his estate and legal representative.
Severability. In the event of the invalidity, in whole or in part, of any
term or provision of this Agreement, the parties agree that such invalidity
shall not affect the validity of any other term or provision of this Agreement
and that such provision shall be subject to partial enforcement to the extent
permitted under applicable law.
Entire Agreement. This Agreement constitutes the entire understandings of
the parties with respect to the employment of Xxx Xxxxxx by the Company and
supersedes all prior agreements and understandings, oral or written.
Amendments. This Agreement may not be amended or modified except in a
writing signed by both parties.
Waiver. The failure by a party to insist upon strict performance of any
provision hereof shall not constitute a waiver of such provision. All waivers
must be in writing to be enforceable hereunder.
Governing Law. This Agreement shall be made and in all respects shall be
interpreted, construed and governed by and in accordance with the laws of the
State of Nevada, without giving effect to the rules governing conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
COLORSMART INC.
By: /s/ Xxxxx Xxxxxxx Xx. /s/ Xxxxx Xxxxxxx Xx.
Chief Executive Officer ---------------------
9-21-99
/s/ Xxx Xxxxxx
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9/21/99
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