Exhibit 10.18
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made effective as of JUNE 1, 2003 (the "Effective
Date") by and between CHAMPIONLYTE HOLDINGS, INC., a Florida Corporation
("Company" or "the company") and XXXX XXXXXXXX ("Executive").
WITNESSETH:
WHEREAS, Company desires to employ the Executive upon and subject to the terms
and conditions set forth herein and the Executive desires lo accept such
employment; and
WHEREAS the parties wish to set forth the terms and conditions upon which the
Executive is to be employed;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. NATURE OF EMPLOYMENT The Company hereby agrees to employ the Executive,
and the Executive hereby agrees to be employed by Company, as its President and
Chief Executive Officer. In such capacity, Executive shall perform such duties
and have such responsibilities as may be assigned by the Board from time to lime
that are normally inherent in such capacities in companies of similar size and
character. In addition, during the Employment Term, the Company shall appoint
Executive to serve as Chairman of the Board; provided the Company agrees that
Executive shall be indemnified for serving in such capacity on a basis no less
favorable than is provided by the Company's By-laws and to other members of the
Board.
2. BEST EFFORTS The Executive shall s serve Company faithfully, devoting as
much of his lime as is needed and his attention, energy, effort, technical
knowledge, know-how and skill to best promote the business and interests of
Company. The Executive shall at all times use his best efforts to preserve and
maintain the business relationships between Company and its Executives, clients
and suppliers. During the Term of this Agreement, the Executive shall not engage
in any other business, profession or occupation for compensation or otherwise
which would conflict with the rendition of such services either directly or
indirectly, without the prior written consent of the Board.
3. TERM OF EMPLOYMENT The initial term of employment shall be two (2) years
(the "Term"), beginning on the Effective Date unless sooner terminated in
accordance with Section 5 below. After the initial two (2) year agreement, the
agreement shall automatically renew on the anniversary of its expiration unless
one party notifies the other in writing, certified mail, return receipt
requested, no later than thirty days (30) prior to the anniversary date of the
Agreement, of the intention to not renew the Agreement.
4.0 COMPENSATION
4.1 BASE SALARY -The Company shall pay the Executive $3,500 per month in
the Company's common stock for the first year and $4,000 per month in the
Company's common stock in the second year. Should the agreement be renewed,
the executive shall receive an increase of 10% per annum for each year that
the agreement is
renewed. Company agrees t0 issue to Executive shares of its common stock
that are fully paid and nonassessable and unrestricted. In the event the
Company does not have unrestricted shares available to issue lo Executive
it shall issue restricted shares and grant Executive a `piggyback'
registration right with respect to the shares. In addition, for as long as
Executive is a member of the board of directors of the Company he shall
receive compensation equal to that given to all other members of the board
of directors.
4.2 WARRANT BONUS. In consideration of his entry into this Agreement,
Executive shall be entitled to receive 100,000 warrants to purchase the
Parent Company's common stock for a term of two years at a price equal to
$.25 per share. These options to be evidenced by a written form to issued
within 30 days following the execution of this Agreement. In addition
should the Executive be employed by the Company 90 days from the Effective
Date herein, the Executive will receive a Warrant pursuant to purchase an
additional 100,000 shares of the Parent Company's stock in 90 days from the
Effective Date and each 90 day period through the term of this agreement at
and exercise prim equal to 100% of the Parent Company's closing stock price
as of that date. These warrants shall carry a term of two years. Parent
Company agrees to grant to Executive 'piggyback' registration rights for
any warrants issued to Executive prior to the Parent Company filing any
registration statement for the Parent Company's common shares.
4.4 BONUS. The Executive shall be entitled to a bonus as follows: Personal
Performance Commission based on sales made as a direct result of
Executive's own efforts, equal to 1% of Gross Sales, payable on a quarterly
basis. Executive shall continue to receive commissions on sales made as a
direct result of Executive's own efforts for a period of one (1) year
following his employment separation from the Company regardless of the
reason for the employment separation. This clause shall be null and void
should the executive be terminated pursuant to Section 5.4 hereunder
(termination for cause).
4.5 BENEFITS The Executive shall be entitled to four (4) weeks paid
vacation and Five (5) personal days and eleven (11) holidays to be agreed
upon by the executive and the Board of Directors in each twelvemonth period
beginning with the Effective Date of this Agreement, in accordance with the
Company's policies regarding accrual and use of vacation for the Company's
similarly situated executives. There shall be no carryover of unused
vacation and personal days from year to year. The Executive shall be
entitled to participate in all benefit plans maintained by Company,
specifically including but not limited to health insurance, life insurance,
travel insurance, and group disability insurance, in accordance with the
terms of the plans. As shall be determined by the Board of Directors the
Executive shall be entitled to personal leave.
4.6 EXPENSES DURING THE TERM. The Executive shall be reimbursed by Company
for expenses reasonably and necessarily incurred by him in connection with
her duties on behalf of Company, subject to appropriate documentation in
accordance with Company's expense reimbursement policy: provided that
expenses in excess of $1,000 shall require the prior approval of the Board
of Directors. Payment for expenses shall be provided to Executive at the
end of each month for expenses mewed the previous month. The Executive
shall be reimbursed for reasonable travel and business entertainment
expenses.
2
5.0 TERMINATION
5.1 TERMINATION UPON DISABILITY It Executive becomes totally or partially
physically or mentally disabled, such that HE is unable with or without a
reasonable accommodation to perform her duties hereunder for a period of 60
days in any 120 consecutive calendar day period or for an aggregate of 120
days within any 12 consecutive month period, the Company shall have the
right to terminate the Executive's employment hereunder by giving the
Executive thirty (30) days Written notice to that effect. In the event of
Executive's termination pursuant to this Section 5.1, the Company shall pay
Executive, in full satisfaction of all of its obligations hereunder, all
compensation and benefits to which is entitled through the date of
termination, but shall be entitled to a credit against this obligation in
the amount of any disability insurance benefits received by Executive
during such period from a disability insurance policy paid for by the
Company, or from the Social Security disability program.
5.1.1. DETERMINATION OF DISABILITY Any question as to the existence of
the disability of the Executive as to which the Executive and the Company
cannot agree shall be determined in writing by a qualified independent
physician mutually acceptable to the Executive and the Company. If the
Executive and the Company cannot agree as to a qualified independent
physician. Each shall appoint such a physician and those two physicians
shall select a third who shall make such determination in writing. The
determination of disability made in writing to the Company and the
Executive shall be final and conclusive for all purposes of the Agreement.
Notwithstanding the foregoing, the receipt of long-term disability benefits
by the Executive shall constitute conclusive proof of the Executive's
disability for purposes of this Agreement.
5.2. TERMINATION UPON DEATH If the Executive dies, his employment and the
Company's obligation to pay the Base Salary and Bonus, if any, shall
terminate as of the date of Executive's death; provided, however, that
Executive's estate shall be entitled to receive any unpaid amounts of the
Annual Salary, and any Bonus earned up to the date on which Executive's
death occurs, which payments shall be made at such times as they would have
been paid to Executive.
5.3 TERMINATION BY MUTUAL AGREEMENT Executive's employment under this
Agreement may be terminated by the mutual agreement of the parties to this
Agreement, on such terms as may be agreed.
5.4 TERMINATION BY THE COMPANY FOR CAUSE
5.4.1 The Company may terminate Executive's employment hereunder for
Cause.
5.4.2 For purposes of this Section 5, "Cause" shall mean: (i)
commission of a willful act of dishonesty in the course of the Executive's
duties hereunder, (ii) conviction by a Court of competent jurisdiction of a
crime constituting a felony or conviction in respect of any act involving
fraud, dishonesty or moral turpitude, (iii) the Executive's continued,
habitual intoxication or performance under the influence of controlled
substances during working hours, after the Company shall have provided
written notice to the Executive
3
and gave the Executive thirty (30) days within which to commence
rehabilitation with respect thereto, and the Executive shall have failed to
commence such rehabilitation, (iv) frequent or extended, and unjustifiable
(not as a result of incapacity or disability) absenteeism, (v) engaging in
any act which has the potential for material injury to the Company, (vi)
the Executive's willful personal misconduct, action or inaction, inability
or refusal to perform duties and responsibilities described in Section 1
above, or to carry out directives of the Board, inability or refusal to
perform duties and responsibilities described in Section 1 above or to
carry out directives of the Board or (vii) material non- compliance with
the terms of this Agreement.
5.4.3 In the event the Company terminates Executive's employment
hereunder for Cause, the Company shall pay him all compensation, prorated
bonus, and benefits due to him pursuant to this Agreement through the date
of termination in full satisfaction d all of the Company's obligations to
Executive.
5.5 TERMINATION FOR OTHER REASONS The Company may in its sole discretion,
terminate the Executive's employment for any reason within the first 90
days of the Effective Date of this Agreement. In the event the Company
terminates under this clause, the Company shall pay to Executive the sum of
three months severance, payable in three equal monthly amounts and with no
further obligation on the part of the Company. After 90 days of employment,
in the event the Company terminates the Executive's employment for reasons
other than for Cause or pursuant to the provisions outlined in sections
5.1. 5.2, or 5.3, the Company shall continue to pay to Executive his Base
Salary, BENEFITS, COMMISSIONS, AND PRORATED BONUS, for a period of three
months following the date he receives notice of such termination.
5.6 Release. Notwithstanding any other provision of this Agreement to the
contrary, the Executive acknowledges and agrees that any and all payments
to which the Executive is entitled under this Section are conditioned upon
and subject to the Executive's execution of a general waiver and release,
in such reasonable form as shall be prepared by the Company, of a11 claims
the Executive may have against the Company.
6.0 PROTECTION OF CONFIDENTIAL INFORMATION.
6.1 DEFINITION The Company and its affiliates has acquired and will develop
certain trade secrets and other confidential and proprietary information,
including without limitation methods of operation, financial information,
strategic planning, operational budgets and strategies, software (including
specifications, programs and documentation), marketing information and
strategies, merger and acquisition strategies, payroll data, management
systems, client and vendor lists and client and vendor information
(collectively the "Confidential Information"), to which the Executive will
have access as a result of her employment. Confidential information does
not include information generally known in the industry or which has become
part of the public domain other than by reason of the Executive's breach of
this Agreement. Confidential Information does not include any and all
information which the Executive has brought to the Company as a result of
hat years of experience iii the beverage industry. Such information shall
include, but not be limited to, the information that Executive brings to
the Company in terms of her contacts in the industry and her knowledge
about pricing and vendors.
4
6.2 RETURN Upon termination of his employment for any reason, Executive
will immediately deliver to Company all papers, books, manuals, lists,
software, computer discs and data, correspondence and documents (in any
medium whether in writing, on magnetic tape or in electronic or other form)
containing or relating to the Confidential Information, and he will neither
copy nor take any such material with his upon leaving Company's employ.
6.3 NONDISCLOSURE Executive will not at any time either while employed by
Company or after the termination of his employment reveal any Confidential
Information to any other person or business entity, except as required by
his duties for Company or by law.
6.4 REMEDIES Executive acknowledges and agrees that (a) Company is engaged
in a highly competitive business, (b) the Confidential Information of
Company would be valuable to Company's competitors by virtue of the fact
that it is not generally known to the public or in the industry; (c) the
provisions of this Section are fair and reasonable to protect Company's
business interests and competitive position and are of vital concern to
Company, and, (d) breach of this Section by Executive would cause Company
irreparable harm, for which monetary damages would not adequately
compensate Company. Therefore, the Executive agrees that the, restrictions
set forth in this Section may be enforced by injunction, without the
requirement of any bond, in addition to whatever other rights or remedies
are available to Company.
8.0 NON-COMPETITION AND NON-SOLICITATION
8.1 NON-SOLICITATION; NON-INTERFERENCE. During the Term and for a period of
ONE year(s) after the termination of Executive's employment with Company,
Executive will not directly or indirectly, on HIS own behalf or on behalf
of any other person or business entity, (i) induce, entice, solicit, hire
or attempt to hire, or assist in the inducement, enticement, Solicitation,
hiring, or attempted hiring of, any of Company's or its affiliates'
employees to work for any other person or business entity, in any other
capacity or (ii) influence or attempt to influence any person that is a
contracting party with Company or its affiliates as of the xxxx of this
Agreement or at any time during the Term of this Agreement, to terminate
any written or oral agreement with Company or its affiliates.
9. ARBITRATION Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, with The exception (at Company's option)
of sections 6,7 and 8, shall be settled by binding arbitration in the
county of Dade, State of Florida, in accordance with the then-existing
Employment Dispute Resolution Rule of the American Arbitration Association
(AAA), and judgment upon the award rendered may be entered in any court
having jurisdiction thereof. If the parties cannot agree upon an
arbitrator(s), the arbitration shall be administered by the AAA. All
applicable statutes bf limitation shall apply to any controversy or claim.
The Company shall bear all costs incurred by the Executive pursuant to this
Arbitration provision, such as attorney's fees, travel expenses, and the
arbitrator's fees.
10. ENTIRE AGREEMENT This Agreement (including any Schedules attached)
supersedes any and all prior Agreements or understandings with respect to
the employment of the Executive. Any modification, termination or waiver of
any provision of this Agreement
5
shall be effective only if contained in a writing signed by the party to be
charged, and no such waiver in one instance shall operate as a Waiver of
ally other provision or of any subsequent breach of the provision waived.
11. SEVERABILITY OF PROVISIONS The provisions of this Agreement are
separate and severable, and if any of them is declared invalid and/or
unenforceable by a court of competent jurisdiction or an arbitrator, the
remaining Provisions shall not be affected.
12. BLUE-PENCILLING If an arbitrator or a court of competent jurisdiction
determines that any of the restrictions against disclosure of Confidential
Information, Competition and/or solicitation contained in this Agreement
are invalid in whole or in pail due to overbreadth, whether geographically,
temporally, or otherwise, such arbitrator or cortt is specifically
authorized and requested to reform such provision by modifying it to the
smallest extent necessary to render it valid and enforceable, and to
enforce the provision as modified.
13. ASSIGNMENT This Agreement is a personal contract and may not be sold,
transferred or assigned by the Executive, except with respect to
Compensation to be received hereunder, which may be assigned by written
notice to Company. It shall be assignable by Company to any party that
acquires a substantial portion of the assets, stock or business of Company,
provided that the assignee assumes this Agreement.
14. Benefit The rights and covenants of this Agreement shall inure and
extend to the parties hereto, their respective personal representatives,
heirs, successors, corporate parents, subsidiaries, and affiliates, and
permitted assigns.
15. MISCELLANEOUS
(a) The section and paragraph headings in this Agreement are included
for convenience only.
(b) By signing this Agreement, the Company warrants (1) that it is a
corporation duly organized, validly existing and in good standing
under the laws of all jurisdictions in which it is incorporated and/or
licensed to conduct business; (2) that it has full authority to enter
into and perform its obligations under this Agreement, and that the
corporate officer signing on its behalf has authority 10 do so; and
(3) that to the best of its knowledge there exists no actual or
threatened proceeding or investigation of any kind against the Company
or to which the Company might become a party which might affect the
validity or enforceability of this Agreement.
(c) This Agreement is the joint product of the Company and the
Executive and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of the Company and the
Executive and shall not be construed for or against either party
hereto.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of FLORIDA without reference to its
principles of conflict of laws, or to the principles of conflict of
laws of any other jurisdiction which would cause the application of
the law of any jurisdiction other than the Slate of FLORIDA
6
(e) This Agreement may be signed in counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of
the xxxx first above written.
COMPANY
BY: /s/ Xxxx Xxxxxxxx
-----------------
Pres.
---------------------
Executive:
