Exhibit 10.1
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of September 6,
2006, is entered into between Xtreme Companies, Inc., a Nevada corporation (the
"Company" or Xtreme"), and Xxxx Xxxxx (the "Employee").
WHEREAS, the parties are entering into this Agreement to set forth
their respective rights and obligations with respect to the Employee's
employment by the Company.
NOW THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT. The Company shall employ the Employee and the
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Employee hereby accepts such employment with the Company, upon the terms and
conditions hereinafter set forth for the period beginning on September 6, 2006
(the "Effective Date") and ending on the Termination Date determined pursuant to
Section 4 (the "Employment Term").
2. POSITION AND DUTIES.
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(a) During the Employment Term, the Employee shall serve as
the Chief Operating Officer of Xtreme and Xtreme's subsidiary company, Marine
Holdings, Inc. d/b/a Challenger Offshore ("Marine"). The Employee shall report
to the Company's CEO and perform such duties as are assigned to him by the CEO.
The Employee acknowledges and agrees that he owes a fiduciary duty of loyalty to
the Company and he will, at all times, discharge his duties and otherwise act in
a manner consistent with the best interests of the Company.
(b) During the Employment Term, the Employee shall devote his
best efforts and his full time, attention and energies to the performance of his
duties and responsibilities under this Agreement. During the Employment Term and
as set forth in section 8, below, the Employee shall not engage in any business
activity, which conflicts with the duties of Employee hereunder.
(c) Employee shall not hire any officers without the approval
of the Company's Board of Directors.
3. COMPENSATION AND BENEFITS. As compensation in full for the
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services to be rendered by the Employee under this Agreement, the Company agrees
to compensate the Employee as follows:
(a) During the Employment Term, the Company shall pay
Employee an annual salary of one-hundred and eight-thousand dollars ($108,000)
("Base Salary"), which shall be paid bi-monthly.
(b) The Employee shall also be entitled to:
(i) Receive an annual cash bonus ("Cash Bonus") of
up to forty percent (40%) of the Base Salary. The Cash Bonus shall be calculated
based on actual performance applied to performance metrics ("the Metrics"). The
Metrics shall be mutually agreed upon by the Company's Board of Directors, the
CEO and the Employee.
(ii) Receive a one-time bonus of up to ten percent
(10%) of the Company's outstanding shares of common stock ("Stock Bonus"). The
Stock Bonus shall be calculated based on actual performance applied to the
Metrics. Except as otherwise set forth herein, the Stock Bonus shall be earned
and vest only after the Employee completes two years of employment ("Vesting
Period"). Additionally, the Employee agrees to execute and be bound by a
Leak-Out Agreement (Exhibit A) governing future sales or dispositions of the
Company's common stock by the Employee.
(iii) Receive "Relocation Expenses" up to a maximum
of fifteen-thousand dollars ($15,000). Relocation Expenses shall include rent,
moving, travel and other costs associated with the Employee's relocation to the
Washington, MO region. Upon submission of proper vouchers and evidence, the
Company will promptly pay or reimburse Employee for the Relocation Expenses.
(c) Employee shall be eligible to participate in those
non-salary benefits and programs generally made available to employees of the
Company, as are in effect from time to time, including, but not limited to, any
health, dental, life or disability insurance plan, 401(k) or other retirement
savings plan, and any other employee benefit plan, subject to any and all terms,
conditions, and eligibility requirements of said plans or benefits, as may from
time to time be prescribed by the Company. Full family health insurance, life
and disability insurance (short-term and long-term) coverage shall be provided
for Employee immediately upon execution of this Employment Agreement. The life
insurance policy shall be for two times the Employee's base annual salary.
Employee acknowledges that non-salary benefits are discretionary with the
Company's Board and that such benefits may be modified or terminated without
notice to the Employee.
(d) Employee shall be entitled to a vacation period or
periods each year during the Employment Term in accordance with the Company's
vacation policy for officers.
(e) Upon submission of proper vouchers and evidence, the
Company will promptly pay or reimburse Employee for reasonable transportation,
hotel, travel and related expenses incurred by Employee on business trips away
from Employee's principal office, and for other business expenses reasonably
incurred by Employee in connection with the business of the Company during the
Employment Term, all subject to such limitations and procedures as may from time
to time be prescribed by the Board of Directors of the Company or the CEO.
4. TERMINATION.
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(a) The Employee's employment under this Agreement shall
terminate upon the earliest to occur of (the date of such occurrence being the
"Termination Date") (1) two (2) years of employment under this Agreement, (2)
the Employee's resignation, (3) the Employee's death or a Disability (an
"Involuntary Termination"), (4) the termination of Employee's employment for
Cause by the Board of Directors (a "Termination for Cause"), or (5) date of a
resignation shall be the date of a written or oral resignation by the Employee
which is received by the Company's CEO; the effective date of an Involuntary
Termination shall be the date of death or, in the event of a Disability, the
date specified in a notice delivered to the Employee by the Company; and the
effective date of a Termination for Cause or without Cause shall be the date
specified in a notice delivered to the Employee by the Company.
(b) For purposes of this Agreement, "Cause" shall mean those
instances in which Employee actually, or the Board of Directors (excluding the
Employee if the Employee is a member of the Board as such time) determines in
good faith that Employee has (i) intentionally furnished materially false or
misleading information to the Company's CEO or Board of Directors that results
or could reasonably be expected to result in detriment to the Company, (ii)
refused or failed to follow the instructions of the CEO with respect to any
matter related to the operation or management of the Company, (iii) engaged in
the use of alcohol or drugs to an extent that, in the good faith determination
of the CEO or Board of Directors (excluding the Employee if the Employee is a
member of the Board at such time), such use interferes with performance of the
Employee's duties and responsibilities, (iv) committed or engaged in any
unlawful act under applicable law, or (v) breached his obligation under this
Agreement in any material respect.
(c) For purposes of this Agreement, the term "Disability"
shall mean the physical or mental inability of the Employee to substantially
perform all of his duties under this Agreement for a period of ninety (90)
consecutive days or longer or for any 90 days in any consecutive twelve (12)
month period as determined by the Company's CEO or Board of Directors.
5. EFFECT OF TERMINATION.
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(a) In the event the Company terminates this Agreement
without Cause, the Employee shall only have the right to receive the following:
(i) the continuation of the Employee's Base Salary for
the time remaining under this Agreement as set forth in section 4(a)(1).
(ii) a pro-rated portion of the Stock Bonus and Cash
Bonus set forth in section 3, provided that the Employee has been employed for
not less than 18 months under this Agreement and the Metrics have been achieved
as provided for in section 3(b)(i) and 3(b)(ii).
(iii) reimbursement for any expenses incurred prior to
the Termination Date for which the Employee shall not have been previously
reimbursed in accordance with the provisions of Section 3(e), above.
(b) In the event this Agreement is terminated for any other
reason other than without Cause, including the additional reasons set forth in
section 4, above, the Employee shall only be entitled to reimbursement of
expenses as set forth above at sections 3(e).
(c) Upon any Termination of this Agreement, neither the
Employee nor his beneficiaries or estate shall have any further rights under
this Agreement or any rights arising out of this Agreement other than as
provided in this Section 5. The rights of the Employee set forth in this Section
5 are intended to be the Employee's exclusive remedy for termination and, to the
greatest extent permitted by applicable law, the Employee waives all other
remedies.
(d) Following any termination, Employee shall fully cooperate
with Company in all matters relating to the winding up of the Employee's work on
behalf of Company and the orderly transfer of any such pending work and of
Employee's duties and responsibilities for Company to such other person or
persons as may be designated by the Company in its sole discretion. Employee
shall not be entitled to any additional pay or severance in connection with such
cooperation.
6. NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION. The
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Employee will not disclose, disseminate or use at any time, either during the
Employment Term or thereafter, any Confidential Information of which the
Employee is or becomes aware, whether or not such information is developed by
him, except to the extent that such disclosure or use is directly related to an
required by the Employee's performance of duties assigned to the Employee by the
Company. For purposes of this Agreement, the term "Confidential Information"
shall mean information that is not generally known to the public and that is
used, developed or obtained by the Company in connection with the Business,
including, without limitation (a) information, observations, procedures and data
obtained by the Employee while employed by the Company concerning the business
or affairs of the Company; (b) planned or actual products or services; (c) costs
and pricing structures, customer, supplier or employee lists; (d) analyses,
drawings, photographs and reports; (d) computer software and hardware, including
operating systems, applications and program listings; (e) data bases; (f)
accounting and business methods; (g) research and development, and (h)
inventions, devices, new developments, method and processes, technology and
trade secrets (including, without limitation all Work Product).
7. INVENTIONS AND PATENTS. The Employee agrees that all Work
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Product belongs to the Company (including any and all Work Product developed by
the Company prior to the date of this Agreement). The Employee will promptly
disclose such Work Product to the Board of Directors and perform all actions
reasonably requested by the Board (whether during or after the Employment Term)
to establish and confirm such ownership (including, without limitation, the
execution and delivery of assignments, consents, powers of attorney and other
instruments) and to provide reasonable assistance to the Company in connection
with the prosecution of any application for patents, trademarks, trade names,
service marks or reissues thereof or in the prosecution or defense of any claims
by or against the Company relating in any way to Work Product. For purposes of
this Agreement, the term "Work Product" shall mean all inventions, innovations,
improvements, technical information, systems, software or equipment
developments, methods, designs, analyses, drawings, reports, service marks,
trademarks, trade names, logos and all similar or related information (whether
patentable or unpatentable) which relates to the Company's actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by the Employee (whether or not
during usual business hours and whether or not alone or in conjunction with any
other person, group or entity) while employed by the Company, together with all
patent applications, letters patent, trademark, trade name and service xxxx
applications or registrations, copyrights and reissues thereof that may be
granted for or upon the foregoing.
8. NON-COMPETE, NON-SOLICITATION, NON-DISPARAGEMENT. The
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Employee acknowledges and agrees with the Company that during the course of the
Employee's employment with the Company, the Employee will have the opportunity
to develop relationships with existing employees, customers and other business
associates of the Company which relationships constitute goodwill of the
Company, and the Company would be irreparably damaged if the Employee were to
take actions that would damage or misappropriate such goodwill. Accordingly, the
Employee agrees as follows:
(a) The Employee acknowledges that the Business is operated in the
United States and markets for the Company's products and services are located in
the United States. Accordingly, during the Employment Term until the twelve (12)
month anniversary of the Termination Date (the "Non-Compete Period"), the
Employee shall not, directly or indirectly, enter into, engage in, assist, give
or lend funds to or otherwise finance, be employed by or consult with, or have a
financial or other interest in, any business which is similar to or competitive
with the Business, whether for himself or as an independent contractor, agent,
stockholder, partner, or joint venture for any other person, group or entity. To
the extent that the covenant provided in this Section 8 (a) may later be deemed
by a court to be too broad to be enforced with respect to its duration or with
respect to any particular activity or geographic area, the court making such
determination shall have the power to reduce the duration or scope of the
provision, and add or delete specific words or phrases to or from the provision.
The provision, as modified, shall then be enforced.
(b) The Employee covenants and agrees that during the terms of his
employment and for twelve (12) months following the Termination Date, the
Employee will not, directly or indirectly, either for himself or for any other
person, group or entity (i) solicit any employee, independent contractor or
service provider of the Company to terminate or modify his, her or its
employment or other relationship with the Company or employ or retain any person
or entity, (ii) solicit any customer, licensee, or licensor, of the Company or
any service provider to the Company to purchase or provide products or services
on behalf of the
Employee or such other person, group or entity that are competitive with the
products or services provided by the Company, or (iii) disparage the business
reputation of the Company or its management team.
(c) Employee acknowledges that the restrictions placed upon
Employee by this Section 8 are reasonable given the Employee's position with the
Company, the geographic area in which the Company markets its products and
services, and the consideration furnished in this Agreement. Further, Employee
also agrees that the provisions of this section are fair and necessary to
protect the Company and its business interests and, that such provisions do not
preclude the Employee from utilizing unprotected information or from engaging in
occupations in unrelated fields or in a manner consistent with the requirements
of this Agreement.
9. RETURN OF COMPANY'S PROPERTY UPON TERMINATION. The Employee
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shall immediately deliver to the Company at the termination of the Employment
Term or at any time the Board of Directors may request, all Company property
(including but not limited to all documents, electronic files/records, keys,
records, computer disks, or other tangible or intangible things that may or may
not relate to or otherwise constitute Confidential Information, Work Product, or
trade secrets (as defined by applicable law) that Employee created, used,
possessed, or maintained while in the employ of the Company, from whatever
source.
10. ENFORCEMENT. Because the Employee's services are unique and
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because the Employee has access to Confidential Information and Work Product,
the parties hereto agree that money damages would be an inadequate remedy for
any breach of this Agreement. Therefore, in the event of a breach or threatened
breach of this agreement, the Company or its successors or assigns may, in
addition to other rights and remedies existing in their favor, apply to any
court of competent jurisdiction for specific performance and/or injunctive or
other relief in order to enforce, or prevent any violation of, the provisions
hereof (without posting a bond or other security).
11. MISCELLANEOUS.
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(a) This Agreement shall be binding upon and inure to the
benefit of Employee and his heirs and personal representatives, and the Company
and its successors, assigns and legal representatives. This Agreement and the
responsibilities/benefits hereunder are personal to Employee and are not
assignable or transferable by Employee.
(b) The Company shall have the right to offset against
amounts due to Employee hereunder by any amounts owed by Employee to Company,
including any advances.
(c) This Agreement constitutes the entire agreement between
the Company and Employee with respect to the subject matter hereof and
supersedes any and all previous agreements or understandings between Employee
and the Company concerning the subject matter hereof. Specifically, but without
limitation of the forgoing provisions in this section 11(c), the parties agree
that this Agreement supersedes the Consulting Agreement dated June 6, 2006
between the parties and that the Consulting Agreement no longer has any force
and effect. This Agreement may not be changed or amended without the prior
written consent of both of the parties hereto.
(d) All notices hereunder shall be in writing and shall be
deemed given on the third day after mailing through the United States mail,
certified mail, return receipt requested, postage prepaid, or by overnight
delivery to the persons listed below or to such other person(s) and/or addresses
as may be designated from time to time in writing.
If to the Company:
Xtreme Companies, Inc.
C/O Dutchess Capital Management LLC
00 Xxxxxxxxxxxx Xxx.
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Chairman
Fax: (000) 000-0000
If to Employee:
(e) This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri.
(f) Any waiver by either party of any breach of any of the
terms of this Agreement shall not be considered a waiver of any subsequent
breach.
(g) In the event that any provision of this Agreement is held
to be unenforceable, then such enforceability shall in no way affect the other
terms and provisions of this Agreement which shall remain in full force and
effect.
(h) The captions herein are for the convenience of the
parties and are not to be construed as part of the terms of this Agreement.
(i) This Agreement may be amended, modified or supplemented
only by written agreement of the parties hereto, which agreement shall have been
duly authorized and approved by the Board of Directors of the Company.
(j) The failure of the Company at any time or from time to
time to require performance of any of the Employee's obligations under this
Agreement shall in no manner affect the Company's right to enforce any provision
of this Agreement at any subsequent time, and the waiver by the Company of any
right arising out of any breach shall not be construed as a waiver of any right
arising out of any subsequent breach.
(k) Any dispute or controversy arising under or in connection
with this Agreement, other than for injunctive relief sought by the Company
under Sections 6 or 9, shall be settled exclusively by arbitration, conducted
before a panel of one arbitrator in the State of Missouri, County of St. Louis
in accordance with the rules of the American Arbitration Association then in
effect, and judgment may be entered on the arbitrator's award in any court
having jurisdiction. The decision of the arbitrator shall be final and binding
on the parties. Each party shall bear its own legal fees in any dispute.
IN WITNESS WHEREOF, the parties hereto have signed and sealed this
Agreement as of the day and year first above written.
COMPANY:
XTREME COMPANIES, INC.
By:/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx,
President and CEO
EMPLOYEE:
By:/s/ Xxxx Xxxxx
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Xxxx Xxxxx
