EMPLOYMENT AGREEMENT
Exhibit
10.35
This
Employment Agreement (this “Agreement”) is between XELR8, Inc. (the “Company”)
and Xxxx Xxxxxxx (“Employee”), and is executed effective as of June 1, 2009 (the
“Effective Date”) in connection with and consideration of the compensation set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
1. Previous
Employment Agreement.
A. Previous Employment
Agreement. The Company and Employee have previously entered
into that Employment Agreement dated effective February 1, 2008 (the “Previous
Employment Agreement”), pursuant to which Employee was employed as Chief
Executive and Chief Financial Officer of the Company for a term of two
years. The Company and Employee now desire to terminate the Previous
Employment Agreement, and to replace it with this Agreement.
B. Termination of Previous
Employment Agreement. The Previous Employment Agreement is
terminated on mutual agreement of the Company and Employee effective as of the
Effective Date. The Previous Employment Agreement shall be of no
further force or effect hereafter, and neither party shall have any further
obligations or duties with respect to each other under the Previous Employment
Agreement; however, this termination shall not extinguish Employee’s rights in
any stock options previously granted to Employee. It is expressly
agreed that Employee shall have no claims related to any accrued vacation under
the Previous Employment Agreement.
2. Services
to be Rendered by Employee. The Company hereby employs,
engages and hires Employee in the capacity of Chief Financial Officer, and
Employee hereby accepts and agrees to such hiring, engagement and
employment. Employee shall have those duties specified on Exhibit A hereto,
which is incorporated herein by this reference. In this position,
Employee shall report to both the Chief Executive Officer of the Company and the
Company’s Audit Committee. Employee will devote his reasonable
efforts, energy and skill to the performance of these duties and for the benefit
of the Company, and will exercise due diligence and care in the performance of
all duties performed for the Company under this Agreement. Employee
will devote the time necessary to fulfill Employee’s duties to the
Company. However, Employee shall not be required to devote his full
time efforts, energy and skill to the performance of these duties, nor will he
be required to fulfill these duties solely at the offices of the
Company. The Company expressly agrees that Employee will be entitled
to seek and engage in other employment and business activities, unless such
employment or activities would violate the non-competition covenant in Section 7
or any other provision of this Agreement.
3. Term;
Termination.
A. Term. Subject
to the terms and conditions of this Agreement, the Company will employ Employee,
and Employee will serve the Company, for one year from the Effective Date (the
“Term”).
B. Termination by the
Company. Employee’s employment may only be terminated by the
Company during the term of this Agreement for “Cause,” which termination may
occur without prior written notice to Employee. Termination for Cause shall be
defined as any of the following from and after the Effective Date:
(a) Any
willful breach of any material written policy of the Company that results in
material and demonstrable liability or loss to the Company or that continues
after written notice;
-1-
(b) Willful
failure to perform or gross negligence in connection with the performance of
Employee’s duties;
(c) The
engaging by Employee in conduct involving moral turpitude that causes material
and demonstrable injury, monetarily or otherwise, to the Company, including, but
not limited to, misappropriation or conversion of assets of the Company (other
than immaterial assets);
(d) Conviction
of or entry of a plea of nolo contendere to a felony;
(e) A
material breach of this Agreement, including by engaging in action in violation
of the restrictive covenants in this Agreement; or
(f) Any other
conduct or activity that the Chief Executive Officer determines in good faith
jeopardizes the proper conduct of the Company’s operations if such conduct or
activity continues to occur after written notice.
No act or failure to
act by the Employee shall be deemed “willful” if done, or omitted to be done, by
him in good faith and with the reasonable belief that his action or omission was
in the best interest of the Company.
C. Termination by
Employee. Employee may terminate his employment by the Company
at any time by giving 14 days prior written notice thereof to the
Company.
D. Effect of
Termination. Upon termination of Employee’s employment
pursuant to Section 3(B) or Section 3(C) or expiration of the Term, the
Company’s obligations under this Agreement will terminate.
4. Compensation;
Benefits.
A. Base
Salary. During the term of this Agreement, the Company will
pay to Employee base salary (“Base Salary”) at the rate of $112,500 (One Hundred
Twelve Thousand Five Hundred and No/100 dollars) per annum, it being recognized
that the sum of $12,500 represents payment for accrued but unpaid vacation time
due and payable Employee.
B. Additional
Bonus. Employee will be eligible to participate in any bonus
program established by the Compensation Committee of the Board of Directors of
the Company (the “Compensation Committee”), provided that Employee is eligible
by the terms thereof to participate therein.
C. Benefit
Plans. Employee will be entitled to participate in all formal
retirement, insurance, hospitalization, disability and other employee benefit
plans that are in existence or may be adopted by the Company or in which
employees of the Company are eligible to participate, provided that Employee is
eligible by the terms thereof and applicable law to participate
therein.
-2-
D. Company Laptop Computer,
Cellular Telephone, and Home Internet Connection. During the Term, the
Company will provide Employee with a laptop computer, a cellular telephone, and
a high speed Internet connection at Employee’s home, for use by Employee in the
performance of his duties hereunder. The Company will pay all costs
associated with acquiring these items and services, and will pay any ongoing
charges and expenses related to these items and services during the
Term. The laptop computer and cellular telephone provided to Employee
by the Company shall remain the property of the Company and shall be returned to
the Company upon termination of Employee’s employment with the
Company. The high speed Internet connection at Employee’s home may be
terminated by the Company upon termination of Employee’s employment with the
Company.
E. General. All
payments under this Agreement will be subject to applicable withholding and
similar taxes and will, if applicable, be prorated for the applicable
period. Employee’s Base Salary and other compensation will be paid to
Employee in accordance with the Company’s regular policy. The
Compensation Committee will, in its sole discretion, periodically review
Employee’s Base Salary and other compensation.
5. Protection
of Trade Secrets and Confidential Information.
A. Definition of “Confidential
Information. “Confidential Information” means all nonpublic
information concerning or arising from the Company’s business, including
particularly but not by way of limitation trade secrets used, developed or
acquired by the Company in connection with its business; information concerning
the manner and details of the Company’s operation, organization and management;
financial information and/or documents and nonpublic policies, procedures and
other printed or written material generated or used in connection with the
Company’s business; the Company’s business plans and strategies; the identities
of the Company’s customers and the specific individual customer representatives
with whom the Company works; the details of the Company’s relationship with such
customers and customer representatives; the identities of distributors,
contractors and vendors utilized in the Company’s business; the details of the
Company’s relationship with such distributors, contractors and vendors; the
nature of fees and charges made to the Company’s customers; nonpublic forms,
contracts and other documents used in the Company’s business; the nature and
content of computer software used in the Company’s business, whether proprietary
to the Company or used by the Company under license from a third party; and all
other information concerning the Company’s concepts, prospects, customers,
employees, contractors, earnings, products, services, equipment, systems and/or
prospective and executed contracts and other business arrangements.
B. Employee’s Use of
Confidential Information. Except in connection with and in
furtherance of Employee’s work on the Company’s behalf, Employee shall not,
without the Company’s prior written consent, at any time, directly or
indirectly, use, disclose or otherwise communicate any Confidential Information
to any person or entity.
C. Acknowledgments. Employee
acknowledges that during the term of his employment, Employee will have access
to Confidential Information, all of which shall be made accessible to Employee
only in strict confidence; that unauthorized disclosure of Confidential
Information will damage the Company’s business; that Confidential Information
would be susceptible to immediate competitive application by a competitor of the
Company; that the Company’s business is substantially dependent on access to and
the continuing secrecy of Confidential Information; that Confidential
Information is unique to the Company and known only to Employee, the Company and
certain key employees and contractors of the Company; that the Company shall at
all times retain ownership and control of all Confidential Information; and that
the restrictions contained in this paragraph are reasonable and necessary for
the protection of the Company’s business.
-3-
D. Records Containing
Confidential Information. All documents or other records
containing or reflecting Confidential Information (“Confidential Documents”)
prepared by or provided to Employee are and shall remain the Company’s
property. Except with the Company’s prior written consent, Employee
shall not copy or use any Confidential Document for any purpose not relating
directly to Employee’s work on the Company’s behalf, or use, disclose or sell
any Confidential Document to any party. Upon the termination of
Employee’s employment or upon the Company’s request, Employee shall immediately
deliver to the Company or its designee (and shall not keep in Employee’s
possession or deliver to anyone else) all Confidential Documents and all other
property belonging to the Company. This paragraph shall not bar
Employee from complying with any subpoena or court order, provided that Employee
shall at the earliest practicable date provide a copy of the subpoena or court
order to the Chief Executive Officer of the Company.
E. Employee’s Former Employers’
Confidential Information. Employee shall not, during
Employee’s employment with the Company, improperly use or disclose to the
Company any proprietary information or trade secrets belonging to any other
current or former employer or any third party as to whom Employee owes a duty of
nondisclosure.
6. Non-Solicitation. During
the term of Employee’s employment, Employee shall not, without the Company’s
prior written consent, directly or indirectly:
A. Cause or
attempt to cause any employee, agent, distributor, endorser or contractor of the
Company to terminate his or her employment, agency, distributor, endorser or
contractor relationship with the Company; interfere or attempt to interfere with
the relationship between the Company and any employee, agent, distributor,
endorser or contractor of the Company or hire or attempt to hire any employee,
agent, distributor, endorser or contractor of the Company; or
B. Solicit
business from any customer or client served by the Company at any point during
the term of Employee’s employment; or interfere or attempt to interfere with any
transaction, agreement or business relationship in which the Company was
involved at any point during the term of Employee’s employment.
7. Non-Competition. During
the Term, Employee shall not, without the Company’s prior written consent,
directly or indirectly engage in any business that is in competition with the
business conducted by the Company anywhere in the United States, whether as
proprietor, partner, joint venturer, employer, agent, employee, consultant,
officer, or beneficial or record owner of more than 2% of the stock of a
corporation, business, or association. For purposes of this Section,
a business is “in competition” with the Company if it engages in business in the
nutritional product network marketing field. However, Employee will
not be prohibited from owning securities in a business in competition with the
Company if the securities are listed on a stock exchange or traded on the
over-the-counter market and represent 2% or less of that class of securities
issued and outstanding. Employee specifically acknowledges and agrees
that the Company’s business covers the market area identified above, and agrees
that the restrictions contained in this Section are reasonable in scope under
Colorado law.
-4-
8. Inventions.
A. Disclosure. Upon
the Company’s request, Employee shall promptly disclose to the Company, in a
manner specified by the Company in its sole discretion, all ideas (including new
products), processes, trademarks and service marks, inventions, discoveries and
improvements to any of the foregoing, that Employee learns of, conceives,
develops or creates alone or with others during the term of Employee’s
employment (whether or not conceived, developed or created during working hours)
that directly or indirectly arises from or relates to: (i) the Company’s
business; (ii) work performed for the Company by Employee or any other Company
employee; (iii) the use of the Company’s property or time; or (iv) access to the
Company’s Confidential Information and/or Confidential Documents.
B. Assignment. Employee
assigns to the Company, without further consideration, Employee’s entire right
to any concept, idea or invention described in the preceding paragraph, which
shall be the sole and exclusive property of the Company whether or not subject
to patent, copyright, trademark or trade secret protection under applicable
law. Employee also acknowledges that all original works of authorship
that are made by Employee (solely or jointly with others), within the scope of
Employee’s employment, and that are protectable by copyright, are “works made
for hire,” as that term is defined in the United States Copyright Act (17 U.S.C.
§ 101). To the extent that any such works, by operation of law,
cannot be “works made for hire,” Employee assigns to the Company all right,
title and interest in and to such works and to any related
copyrights.
C. Additional
Instruments. Employee shall promptly execute, acknowledge and
deliver to the Company all additional instruments or documents deemed at any
time by the Company in its sole discretion to be necessary to carry out the
intentions of this paragraph.
9. Survival. Employee’s
obligations under this Agreement shall survive the termination of Employee’s
employment and shall thereafter be enforceable whether or not such termination
is later claimed or found to be wrongful or to constitute or result in a breach
of any contract or of any other duty owed or claimed to be owed by the Company
to Employee.
10. Remedies. Employee
acknowledges that upon a breach of any obligation under this Agreement, the
Company will suffer immediate and irreparable harm and damage for which money
alone cannot fully compensate the Company. Employee therefore agrees
that upon such breach or threat of imminent breach of any obligation under this
Agreement, the Company shall be entitled to, and Employee shall not oppose entry
of, a temporary restraining order, preliminary injunction, permanent injunction
or other injunctive relief, without posting any bond or other security, barring
Employee from violating any such provision. This paragraph shall not be
construed as an election of any remedy, or as a waiver of any right available to
the Company under this Agreement or the law, including the right to seek damages
from Employee for a breach of any provision of this Agreement, nor shall this
paragraph be construed to limit the rights or remedies available under Colorado
law for any violation of any provision of this Agreement.
11. Miscellaneous.
A. Entire
Agreement. This Agreement constitutes the entire agreement
between the Company and Employee and supersedes all prior oral or written
agreements and understandings with respect to the subject matter
hereof.
B. Heirs and
Assigns. This Agreement shall be binding upon Employee’s
heirs, executors, administrators or other legal representatives, shall inure to
the benefit of the Company, its successors or assigns, and shall be freely
assignable by the Company, but not by Employee.
-5-
C. Governing
Law. This Agreement and all other disputes or issues arising
from or relating in any way to the Company’s relationship with Employee, shall
be governed by the internal laws of the State of Colorado, irrespective of the
choice of law rules of any jurisdiction.
D. Severability. If
any court of competent jurisdiction declares any provision of this Agreement
invalid or unenforceable, the remainder of the Agreement shall remain fully
enforceable. To the extent that any court concludes that any
provision of this Agreement is void or voidable, the court shall reform such
provision(s) to render the provision(s) enforceable, but only to the extent
absolutely necessary to render the provision(s) enforceable and only in view of
the parties’ express desire that the Company be protected to the greatest extent
possible under applicable law from improper competition and/or the misuse or
disclosure of trade secrets, Confidential Documents and/or Confidential
Information.
E. Disputes. Any
action arising from or relating any way to this Agreement, or otherwise arising
from or relating to Employee’s employment with the Company, shall be tried only
in the state or federal courts situated in Denver, Colorado. The
parties consent to jurisdiction and venue in those courts to the greatest extent
possible under law. The prevailing party in any action to enforce any
provision of this Agreement shall recover all costs and attorneys’ fees incurred
in connection with the action.
F. Prior Agreements.
This agreement supersedes all prior agreements between Employee and the Company
relating to the subject of Employee’s employment with the Company and may only
be amended by written instrument signed by Employee and the Chairman of the
Board of the Company.
IN
WITNESS WHEREOF, the undersigned has executed this Employment Agreement to be
effective as of the Effective Date.
EXECUTED
this 1st day of
June, 2009, to be effective as of the Effective Date.
|
EMPLOYEE:
By:
_/s/ Xxxx X.
Xxxxxxx
Name:
Xxxx Xxxxxxx
Title:
Chief Financial Officer
|
COMPANY:
XELR8, INC.
By: /s/
Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X.
Xxxxxxxxx
Title: Chairman of the
Board of Directors
By: /s/ Xxxx X.
XxXxxxxxxx
Name:
Xxxx X. XxXxxxxxxx
Title:
Lead Director
|
-6-
EXHIBIT
A
JOB
RESPONSIBILITIES
|
·
|
Treasury
Management
|
|
o
|
Banking
|
|
o
|
Budgets
|
|
o
|
Projections
|
|
o
|
Assist
in raising new funds
|
|
·
|
Financial
Reporting
|
|
o
|
Preparing,
Q’s, K’s, Proxy, Registration
Statements
|
|
o
|
SOX
preparation
|
|
·
|
Accounting
Functions
|
|
o
|
Daily
oversight
|
|
o
|
Monthly
close
|
|
o
|
Commissions
|
|
o
|
Expense
approval
|
|
·
|
Tax
|
|
o
|
Sales
|
|
o
|
Income
|
|
o
|
Deferred
preparation & analysis
|
|
·
|
Compliance
|
|
o
|
Working
with outside counsel on contracts
|
|
o
|
SEC
/ OTC
|
|
o
|
Distributor
compliance
|
|
o
|
Foreign
country laws & filings
|
|
·
|
Human
Resources
|
|
o
|
Payroll
|
|
o
|
Regulatory
compliance
|
|
o
|
Taxes
|
|
·
|
Risk
Management
|
|
o
|
Insurance
management (Product, D&O, EPL,
WC)
|
|
o
|
Analyzing
transactions and
events.
|
