EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into, and shall be
binding this 31 day of July, 2008, by and between Adrenalina, a Nevada
Corporation (“Employer”) and Xxxx Xxxxxx (“Executive”).
WITNESSETH:
WHEREAS,
Employer, is engaged in the retail business; and
WHEREAS,
Executive is experienced in the management and operation of such business and
is
professionally qualified to perform such services for the Employer, and has
been
employed by the Employer; and
WHEREAS,
Employer desires to retain the services of the Executive; and
WHEREAS,
Executive is desirous of continuing his employment with the Employer on the
terms and conditions set forth herein.
NOW,
THEREFORE, in considerations of the mutual promises set forth herein other
good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Employer and Executive agree as follows:
1.
Recitals,
Representations and Warranties.
The
foregoing recitals are true and correct and are incorporated herein by this
reference. Employer represents and warrants that the individual executing this
Agreement on behalf of Employer has authority to do so.
2.
Employment.
In
exchange for the Compensation (as hereinafter defined) and subject to the other
terms and conditions herein set forth, Employer hereby employs Executive, as
its
Chairman and CEO, to perform the Executive Duties (as hereinafter defined)
and
Executive hereby accepts such employment.
3. Duties.
The
Executive shall serve as Chairman and CEO of the Employer, with such duties,
responsibilities, and powers commensurate with his position as may from time
to
time be assigned to him by the Board of Directors of the Employer. During the
Term of Employment, the Executive shall devote his substantial business time,
energies, best efforts, attention, and ability to the business of the Employer,
shall faithfully and diligently perform the duties of his employment with the
Employer, and shall do everything reasonably in his power to promote, develop,
and extend the business of the Employer. The duties of the Executive shall
include, but not be limited to, the following:
3.01 The
Executive shall implement the decisions of and follow the direction given by
the
Board of Directors of the Employer.
4. Term.
The
term of Agreement shall commence on July 1, 2008 and shall expire on June 30,
2013, subject to termination in accordance with Section 6 hereof.
5.
Compensation.
In
consideration of and as compensation in full for Executive’s performance of the
Executive Duties hereunder, Employer agrees to compensate Executive as follows:
5.01
Salary.
During
the term of this Agreement, Employer shall pay Executive a gross annual salary
of Five Hundred Thousand Dollars ($500,000) (“Salary”). Such Salary shall be
paid by Employer in accordance with Employer’s regular payroll practices.
Employer shall be entitled to deduct or withhold from all Salary payable
hereunder all amounts required to be deducted or withheld from same pursuant
state or federal law. Notwithstanding the above, Employer and Executive agree
that Executive will accept a reduced gross annual salary of Twenty-Eight
Thousand ($28,000.00) Dollars, until such time that Executive notifies Employer
that he wants his gross annual salary restored to the Salary listed above.
Further, Executive gross annual salary shall automatically be restored to the
Salary listed above upon a Change of Control as that term is defined in Section
7 below.
5.02
Stock
Option Plan:
At the
discretion of the Compensation Committee, the Executive may be granted options
of Adrenalina at a price equal to the price of the stock at the close of the
market on the date immediately prior of such grant. Such options shall vest
in 3
annual installments beginning at the end of each twelve (12) month period from
date of grant and will be subject to Employer’s Stock Option Plan, once and if
created.
5.03
Annual
Review.
At the
discretion of the Compensation Committee, the Executive may be granted a bonus
based on performance. At a minimum, a yearly review shall be conducted to assess
eligibility.
5.04
Expense
Reimbursement.
The
Employer shall pay or reimburse the Executive for all ordinary and reasonable
out-of-pocket expenses actually incurred by the Executive during the Term of
Employment in connection with the performance of the Executive’s services
hereunder, provided that the Executive submits proof of such expenses, with
the
properly completed forms, as prescribed from time to time by the Employer and
that all expenses incurred will be reimbursed in accordance with the Employer’s
internal guidelines relating thereto.
5.04
Insurance.
The
Employer shall pay 100% for all health and dental insurance, including family
plans, long-term disability insurance and life insurance at the maximum coverage
contracted by the company.
5.05
Vacation.
Employee
shall be entitled to twenty (20) working days of vacation per twelve (12) month
period during the Term. Such vacations shall be taken at times which are
mutually convenient to the Employer and the Executive, provided that they do
not
materially interfere with the business and operations of the
Employer.
5.06 Phone
Allowance.
Executive shall be entitled to a monthly phone allowance covering regular
use.
5.07
Increases
in Salary.
On each
one-year anniversary of this agreement, Salary shall be increased by the higher
of 5% or the Consumer Price Index Rate.
6.
Termination
of Employment.
6.01 Termination
Due to Death.
If the
Executive dies during the Term of Employment, this Employment Agreement, and
all
obligations of the Employer hereunder to or with respect to the Executive,
shall
terminate immediately and in their entirety, except as otherwise provided in
this Section 6. Upon termination of the Executive’s employment due to his
death, the Executive’s spouse, (“Spouse”), if any, otherwise Executive’s
children (the “Dependents”)
shall
be entitled to receive the Executive’s monthly basic salary in accordance with
Section 5 hereof, until the last day of the month in which Executive’s death
occurs, as well as all arrearages of salary, expenses, pro-rata share of bonus
and other benefits earned and accrued as of the date of death; provided,
however,
that
during such time the Spouse or the Dependants, as applicable, will not be
entitled to receive payments deriving from the Executive’s Employer pension, if
any.
6.02 Termination
Due to Disability.
If the
Executive is unable, due to illness, physical or mental disability, or other
incapacity, to perform substantially and continuously the services required
of
him under this Employment Agreement for more than One Hundred (100) consecutive
or non-consecutive days out of any consecutive twelve-month period, the Employer
shall have the right, to the extent permitted by law, to terminate this
Employment Agreement, and the Executive’s employment hereunder, upon notice in
writing to the Executive. Upon termination of the Executive’s employment
pursuant to this Section 6.02, the Executive shall be entitled to receive all
arrearages of salary, expenses, and other benefits earned and accrued as of
the
date of termination, but he shall have no further rights hereunder.
6.03 Termination
for Cause.
The
Employer may, at its option, terminate this Employment Agreement, and the
Executive’s employment hereunder, for cause at any time upon notice in writing
to the Executive. For purposes of this Employment Agreement, cause shall be
(a)
conviction of a felony; (b) fraud, misappropriation, or embezzlement; or (c)
breach in any material respect of the terms and provisions of this Employment
Agreement. If the Employer terminates the Executive for cause pursuant to this
Section 6.03, the Executive shall have no right to receive any compensation
or
benefits hereunder on or after the effective date of the termination other
than
arrearages of salary, expenses, and benefits earned and accrued as of that
date.
6.04 Termination
without Cause. To
the
extent that the Employer shall decide to terminate this agreement prior to
contract Term (Section 4), Executive shall be entitled to compensation as
defined in Section 5 (including salary, stock plan, insurance coverage and
phone
allowance) for the greater of twelve (12) months or the remainder of the Term
of
the Agreement as if Executive was still employed and this Agreement was in
full
effect. A termination of this Agreement without cause shall be deemed to happen
upon a significant change in Executive’s duties and/or title and/or to the
extent that providing such services would require a move from South Florida.
The
Employer shall pay all reasonable legal fees and expenses incurred by the
Executive in contesting or disputing any such termination without cause or
in
seeking to obtain or enforce any right or benefit in this Agreement. No such
legal fees or expenses shall be payable if it is determined that the termination
was for cause.
7. Change
in Control.
7.01 Change
in Control.
For
purposes of this Agreement, a change in control means the occurrence of one
or
more of the following events (whether or not approved by the Board) : (i) an
event or series of events by which any person or other entity or group of
persons or other entities acting in concert as determined in accordance with
Section 13 (d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), whether or not applicable, together with its or their affiliates or
associates, shall, as a result of a tender offer or exchange offer, open market
purchases, privately negotiated purchases, merger or otherwise (including
pursuant to receipt of revocable proxies) (A) be or become directly or
indirectly the beneficial owner (within the meaning of Rule 13d-3 and Rule
13d-5
under the Exchange Act, whether or not applicable, except that a person shall
be
deemed to have beneficial ownership of all securities that such person has
right
to acquire whether such right is exercisable immediately or only after the
passage of time) of more than 50% of the combined voting power of the then
outstanding common stock of the Employer or (B) otherwise have the ability
to
elect, directly or indirectly a majority of the members of the Board.
7.02 In
the
event of a change in control of Employer, the Employer shall pay to Executive,
in a lump sum, a payment equal to three times the compensation as defined in
Section 5 (including salary, stock plan, insurance coverage and phone allowance)
at the highest rate in effect during the Term of this Agreement.
7.03 In
addition, in the event of a change in control of the Employer, the total number
of outstanding unexercised options granted to the Executive under this Agreement
or any previous employment or other agreements shall be doubled in quantity
while retaining the original exercise price, and any unvested options shall
immediately vest in the Executive at that time.
7.04 In
the
event of a change in control of the Employer, this Agreement shall remain in
full effect regardless of such change in control occurring, and the compensation
as defined in Section 5 (including salary, stock plan, insurance coverage and
phone allowance) shall continue for the full Term of this
Agreement.
8.
Severance.
If the
Executive employment is not renewed at the end of the contract and employment
is
terminated at any time thereafter, unless the termination is pursuant to
Sections 6.01, 6.02 or 6.03, severance shall be granted at the higher of 12
months or the equivalent to 2 months salary for every year of tenure, at then
current rates.
9. Non-Compete.
9.01 The
Executive acknowledges that:
(A) the
principal business of the Employer is the retail sale of clothing and the
operation of a “Flow Rider” in stores located in shopping malls throughout the
United States;
(B) the
Executive’s work for the Employer has given and will continue to give him access
to the confidential affairs and proprietary information of the
Employer;
(C) the
agreements and covenants of the Executive contained in this Section 9 are
essential to the successful operations of the Employer’s business and goodwill
of the Employer; and
(D) the
Employer would not have entered into this Employment Agreement but for the
covenants and agreements set forth in this Section 9.
9.02. Restriction.
(A)
Accordingly,
and in consideration of the salary and benefits to be provided by the Employer
hereunder, and further in consideration of the Executive’s exposure to the
proprietary information of the Employer, the Executive covenants and agrees
that, during the period commencing on the effective date hereof and ending
Six
(6) months following the date upon which the Executive ceases, for any reason,
to be an employee of the Employer or its subsidiaries (the “Restricted
Period”),
he
shall not, within a Fifty (50) mile radius of any store being operated by the
Employer or any location which Employer has executed a lease for a store, but
which has not yet been constructed, opened or commenced operating (the
Restricted Area”) (it being understood that Employer has area restrictions in
each of its leases), directly or indirectly, (i) engage in the retail sale
of
clothing or otherwise compete with Employer in the operation of a retail
clothing store within the Restricted Area; (ii) render any services to any
person, corporation, partnership, or other entity (other than the Employer)
engaged in the retail sale of clothing and/or the operation of a “Flow Rider”
ride (iii) become interested in any such person, corporation, partnership,
limited liability company or other entity (other than the Employer) as a
partner, shareholder, principal, agent, member, consultant, or in any other
relationship or capacity. The Executive may during the Restricted Period accept
employment with an entity that is a competitor of the Employer if, and only
if
he is to render services solely to a division or subsidiary of such competitor
that is not in any way in competition with the Employer’s business.
9.03. Rights
and Remedies Upon Breach of Restriction.
The
Executive acknowledges and agrees that any breach by him of any of the
provisions of Section 9, would result in irreparable injury and damage for
which
money damages would not provide an adequate remedy. Therefore, if the Executive
breaches, or threatens to commit a breach of, any of the provisions of Section
9, the Employer shall have the following rights and remedies, each of which
rights and remedies shall be independent of the other and severally enforceable,
and all of which rights and remedies shall be in addition to, and not in lieu
of, any other rights and remedies available to the Employer under law or in
equity (including, without limitation, the recovery of damages):
(A) The
right
and remedy to have the provisions of Section 9 specifically enforced (without
posting bond and without the need to prove damages) by any court having equity
jurisdiction, including, without limitation, the right to an entry against
the
Executive of restraining orders and injunctions (preliminary, mandatory,
temporary, and permanent) against violations, threatened or actual, and whether
or not then continuing, of such covenants;
(B) The
right
and remedy to require the Executive to account for and pay over to the Employer
all compensation, profits, monies, accruals, increments, or other benefits
(collectively, “Benefits”)
derived or received by him as the result of any transactions inconsistent with
or in violation of his undertakings under Section 9, and the Executive
shall account for and pay over such Benefits to the Employer and, if applicable,
its affected affiliates;
(C) Severability.
The
Executive acknowledges and agrees that (i) he has had an opportunity to seek
advice of counsel in connection with this Employment Agreement and (ii) the
provisions of Section 9 are reasonable in geographical and temporal scope and
in
all other respects. If it is determined that any of the provisions of this
Employment Agreement, including, without limitation, any of the provisions
of
Section 9, or any part thereof, is invalid or unenforceable, the remainder
of
the provisions of this Employment Agreement shall not thereby be affected and
shall be given full effect, without regard to the invalid portions;
9.04. Duration
and Scope of Covenants.
If any
court or other decision maker of competent jurisdiction determines that any
of
the provisions contained in Section 9, or any part thereof, is unenforceable
because of the duration or geographical scope of such provision, the duration
or
scope of such provision, as the case may be, shall be reduced so that such
provision becomes enforceable and, in its reduced form, such provision shall
then be enforceable and shall be enforced.
9.05 Non-Solicitation.
During
the Restricted Period, the Executive shall not, without the Employer’s prior
written consent, directly or indirectly, solicit or encourage to leave the
employment of the Employer or any of its affiliates, any employee thereof or,
subject to all applicable laws, hire any employee who has left the employment
of
the Employer or any of its affiliates after the effective date of this
Employment Agreement within one year of the termination of such employee’s
employment with the Employer or its affiliates. During the Restricted Period,
the Executive shall not, whether for his own account or for the account of
any
other person, firm, corporation limited liability company, or other business
organization, intentionally interfere with the Employer’s or any of its
affiliates’ relationship with, or endeavor to entice away from the Employer or
any of their affiliates, any person who during the Term of Employment was a
customer or client of the Employer or any of its affiliates.
9.06 Non-Disparagement.
During
the Restricted Period, the Executive shall not publish any statement or make
any
statement under circumstances reasonably likely to become public that is
critical of the Employer or any of its affiliates, or in any way adversely
affecting or otherwise maligning the business or reputation of the Employer
or
any of its affiliates; provided,
however,
that
such prohibition shall not apply to statements made in court proceedings or
pursuant to compulsory legal process.
10. Proprietary
and Confidential Information.
10.01 Confidential
Information.
The
Executive agrees that he shall not, during the Term of Employment or at any
time
thereafter, use for his own purposes, or disclose to or for the benefit of
any
third party, any trade secret or other confidential information of the Employer
or any of its affiliates (except as may be required by law or in the performance
of his duties hereunder consistent with the Employer’s practices). For purposes
of this Employment Agreement, confidential information shall be deemed not
to
include information which (a) is or becomes generally available to the public
other than as a result of a disclosure by the Executive or another person who
directly or indirectly receives such information from the Executive or at his
direction or (b) is or becomes available to the Executive on a non-confidential
basis from a source who is entitled to disclose it to the
Executive.
10.02 Ownership
of Work Product. The
Executive agrees promptly and fully to disclose to the Employer any and all
work
product now or hereafter conceived, developed, or made by him within the scope
of his employment with the Employer or relating to the existing or future
business of the Employer including, without limitation, any inventions,
discoveries, data, databases, documentation, software, enhancements,
modifications, know-how, improvements, creative works, pricing information,
customer lists, information, trademarks, trade names, techniques, procedures,
training aids, and instructional manuals, in whatever form, whether solely
or
jointly with others, and whether or not patentable or copyrightable, and whether
or not during regular hours of work or on the Employer’s premises, during his
employment by the Employer or during a period of six months after any
termination of his employment by the Employer (the “Work
Product”).
(A) All
right, title, and interest in and to the Work Product shall belong to the
Employer, and the Executive hereby assigns to the Employer all of his right,
title, and interest in and to the Work Product and in and to all patents,
copyrights, trade secrets, and other proprietary rights in or based upon the
Work Product.
(B) The
Executive and the Employer acknowledge and agree that if the Work Product or
any
portion thereof is copyrightable, it shall be deemed to be a “work made for
hire,” as such term is defined in the Federal Copyright Act, 17 U.S.C. Section
101 et
seq.,
and the
Employer shall own all of the exclusive rights to the Work Product under such
copyright law and all international copyright conventions, including the right
to copyright the Work Product and any renewals thereof in the name of the
Employer or its assignees.
(C) The
Executive agrees, with no additional compensation, to cooperate with the
Employer or its designees and to do everything the Employer deems reasonably
necessary to effect the rights described in this Section 10 or to perfect,
enforce, or defend any proprietary rights resulting from or related to this
Employment Agreement, including, without limitation, to execute any documents
of
assignment, oaths, declarations, and other documents, prepared on behalf of
the
Employer.
(D) The
Executive agrees to keep and maintain accurate records relating to the
conception, development and use of all Work Product, which records shall be
the
sole and exclusive property of the Employer.
10.03 Return
of Property.
All
documents, data, recordings, or other property, whether tangible or intangible,
including all information stored in electronic form, obtained or prepared by
or
for the Executive, and/or utilized by him in the course of his employment with
the Employer shall remain the exclusive property of the Employer. In the event
of the termination of the Executive’s employment for any reason, the Executive
shall promptly return to the Employer all such property which is or has been
in
his custody or control and, if requested, provide a written confirmation that
all such property has been returned.
11. Miscellaneous.
11.01
Notices.
All
notices, demands or other communications given hereunder shall be in writing
and
shall be deemed to have been duly given only upon hand delivery thereof or
upon
the first business day after mailing by United States registered or certified
mail, return receipt requested, postage paid, addressed as follows:
To
Employer: Adrenalina
00000
XX
00xx
Xxx
Xxxx
X-00
Xxxxx,
XX
00000
To
Executive: Xxxx
Xxxxxx
000
Xxxxxx Xxxxx Xxxxx
Xxxxxx
Xxxxx, XX 00000
Or
to
such other address or such other person as any party shall designate, in
writing, to the other for such purposes and in the manner hereinabove set forth.
11.02 Accuracy
of Statements.
No
representation or warranty contained in this Agreement, and no statement
delivered or information supplied to any party pursuant hereto, contains an
untrue statement of material fact or omits to state a material fact necessary
in
order to make the statements or information contained herein or therein not
misleading. The representations and warranties made in this Agreement will
be
continued and will remain true and complete in all material respects and will
survive the execution of transactions completed hereby.
11.03 Entire
Agreement.
This
Agreement sets forth all the promises, covenants, agreements, conditions, and
understandings between the parties hereto, and supersedes all prior and
contemporaneous agreements, understandings, inducements or conditions, expressed
or implied, oral or written, except as herein contained.
11.04 Binding
Effect; Survival & No Assignment.
This
Agreement shall be binding upon the parties hereto, their heirs, administrators,
successors and assigns. This Agreement shall survive and remain effective during
any bankruptcy of the Employer. Executive may not assign or transfer his
interest herein, or delegate his Executive Duties hereunder, without the written
consent of Employer. Any assignment or delegation of duties in violation of
this
provision shall be null and void.
11.05 Amendment.
The
parties hereby irrevocably agree that no attempted amendment, modification,
or
termination, discharge or change (collectively, “Amendment”) of this Agreement
shall be valid and effective, unless the parties shall agree in writing to
such
Amendment.
11.06 No
Waiver.
No
waiver of any provision of this Agreement shall be effective unless it is in
writing and signed by the party against whom it is asserted, any such written
waiver shall only be applicable to the specific instance to which it relates
and
shall not be deemed to be a continuing or future waiver.
11.07 Gender
and Use of Singular and Plural.
All
pronouns shall be deemed to refer to the masculine, feminine, neuter, singular
or plural, as the identity of the party or parties, or their personal
representatives, successors and assigns may require.
11.08 Signatures
and Counterparts.
This
Agreement may be executed by original or facsimile signatures and in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
11.09 Headings.
The
article and section headings contained this Agreement are inserted for
convenience only and shall not effect in any way the meaning or interpretation
of the Agreement.
11.10 Governing
Law.
This
Employment Agreement shall be exclusively governed by and construed in
accordance with the laws of the State of Florida.
11.11 Venue
and Jurisdiction.
The
parties hereto irrevocably and unconditionally consent to the jurisdiction
of
the United States District Court of the Southern District of Florida (to the
extent such Court is not otherwise precluded from exercising jurisdiction with
respect to a particular action arising under or relating to this Employment
Agreement, otherwise, the parties hereto submit to the jurisdiction of any
court
of competent jurisdiction in the Courts of Miami-Dade County, Florida), and
the
parties hereto hereby waive any objection relating to the basis for personal
or
in
rem jurisdiction,
any defense of forum
non conveniens
and any
objection to venue which might be asserted therein. Miami-Dade County, Florida
shall be the exclusive venue for resolving any controversy under or relative
to
this Employment Agreement. Delivery of service of process on a party at its
principal executive offices or residence, or mailing to such offices or
residence in accordance with the applicable procedural law, shall be given
the
same effect as personal service in the State of Florida.
11.12 Further
Assurances.
The
parties hereto will execute and deliver such further instruments and do such
further acts and things as may be reasonably required to carry out the intent
and purposes of this Agreement.
11.13 No
Third Party Beneficiary.
This
Agreement is made solely and specifically among and for the benefit of the
parties hereto, and their respective successors and assigns subject to the
express provisions hereof relating to successors and assigns, and no other
person shall have any rights, interests or claims hereunder or be entitled
to
any benefits under or on account of this Agreement as a third-party beneficiary
or otherwise.
11.14 Severability.
This
Agreement is intended to be performed in accordance with, and only to the extent
permitted by, all applicable laws, ordinances, rules, and regulations of the
jurisdiction with which the parties do business. If any provision of this
Agreement or application thereof to any person or circumstances shall, for
any
reason or to any extent, be invalid or unenforceable, to the remainder of this
Agreement and the application of such provision to other persons or
circumstances shall not be affected thereby, but rather shall be enforced to
the
greatest extent permitted by law.
SIGNATURE
PAGE TO FOLLOW
IN
WITNESS WHEREOF, Employer and Executive have executed this Agreement as of
the
date first above written.
WITNESSES:
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By:
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President
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EXECUTIVE:
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By:
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Xxxx
Xxxxxx
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Date:
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WITNESS:
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By:
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Xxxxxxx
Xxxxxxxx
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