Exhibit 10.10
Form 10-SB
Xx. Xxxxxxxxxxx'x Original Formulas Inc.
File No.:
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is effective as
of July 1, 2000 by and between XXXXX X. XXXXXXX, a resident of
Utah (the "Employee") residing at 0000 Xxxx 000 Xxxxx, Xxxxxx,
Xxxx 00000, and XX. XXXXXXXXXXX'X ORIGINAL FORMULAS, INC., a New
Jersey corporation having its principal place of business at 0000
Xxxxxx Xxxxx Xxxxx, Xxxxxxxxxxx, Xxxx 00000 ("DCOF").
RECITALS:
WHEREAS, DCOF is engaged in the business of marketing herbal
and natural products; and
WHEREAS, the Employee has been the Vice President and Chief
Operating Officer of DCOF since its organization and possesses
knowledge, experience and contacts of substantial value to DCOF's
continued operations and expansion; and
WHEREAS, DCOF desires to establish its right to the services
of the Employee in the capacity described below, on the terms and
conditions and subject to the rights of termination hereinafter
set forth, and the Employee is willing to accept such employment
on such terms and conditions.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
mutually acknowledged, the Employee and DCOF have agreed and do
hereby agree as follows:
1. Employment as Vice President and Chief Operating Officer.
DCOF does hereby employ, engage and hire the Employee as Vice
President and Chief Operating Officer of DCOF, and the Employee
does hereby accept and agree to such hiring, engagement, and
employment. The Employee's duties during the Employment Period (as
that term is defined in Section 2 below) shall include such duties
as are reasonably related to the Employee's skills and experience,
as DCOF's Board of Directors shall from time to time prescribe or
as provided in DCOF's Bylaws or policies, and DCOF's Board of
Directors, in its sole and absolute discretion, shall determine
the Employee's duties and responsibilities and may assign or
reassign the Employee to such duties, responsibilities or
positions as it deems in DCOF's best interest; provided, however,
that any such duties, responsibilities or position shall be
reasonably related to the Employee's skills and experience. The
Employee shall devote a reasonable portion of his time, his skills
and efforts to the performance of his duties hereunder. The
Employee shall also exercise due diligence and care in the
performance of his duties under this Agreement.
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2. Employment Period.
2.1 Initial Term. The Employee shall be employed by the
Company for the duties as set forth in Section 1 above for a
twenty four (24) month period commencing on the date hereof and
ending twenty four (24) months from the date hereof (the "Initial
Term"), unless earlier terminated in accordance with the
provisions of this Agreement.
2.2 Renewal; Employment Period Defined. No later than sixty
(60) days prior to the expiration of the Initial Term, the parties
hereto agree to meet and discuss in good faith the possibility of
extending the term of this Agreement, on terms and conditions
mutually acceptable to the parties. If the parties agree to extend
this Agreement at the expiration of the Initial Term, each such
extension term is referred to herein as a "Renewal Term" and,
collectively, as the "Renewal Terms," Neither DCOF nor the
Employee shall be under any obligation to agree to any such
extension or extensions and may refuse to extend or renew this
Agreement for any or no reason whatsoever. The period of time
commencing as of the date hereof and ending on the effective date
of the termination of employment of the Employee under this or any
successor Agreement is referred to herein as the "Employment
Period."
3. Compensation.
3.1 Compensation Package. DCOF shall pay the Employee, and
the Employee agrees to accept from DCOF in full payment for his
services and promises to DCOF (specifically including the
Employee's Covenant Not to Compete as set forth in Section 9
below) an annual compensation package as set forth below, payable
in equal semi-monthly installments or at such other time or times
as the Employee and DCOF shall agree. The Employee's annual
compensation package need not be renegotiated in the event this
Agreement is extended or renewed pursuant to Section 2 above.
The Employee's annual compensation package shall consist of
the following:
(a) Salary:
$96,000
(b) Housing, including utilities:
$-0-
(c) Automobile, including insurance, gasoline and
maintenance: $20,000
(d) Life insurance coverage with a death benefit of
$3,000,000 $8,000
(e) Medical and dental insurance
$4,000
(f) Retirement benefits (monthly) as follows:
$2,000
TOTAL
$130,000
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Unless the Employer notifies the Employee to the contrary
based on alleged inadequate job performance, the Employee shall
have the right to reallocate, in the Employees full discretion,
the amounts set forth in categories (b) and (c).
3.2 Performance Bonuses. DCOF may, but shall not be obligated
to, pay to the Employee from time to time such additional sums as
performance bonuses as the Board of Directors deems justified in
terms of the overall performance of the Company, based on the
increase in gross sales, respectively, by the Company during the
Initial Term and each renewal term hereunder.
4. Fringe Benefits. The Employee shall be entitled to the
following fringe benefits:
4.1 Benefit Plans. The Employee will have the option to
participate, at his election and expense, in any benefit plans
available to other Company employees, including, but not limited
to, health and dental insurance, subject to any restrictions
(including waiting periods) specified in or otherwise applicable
to said plans.
4.2 Vacation. The Employee is entitled to four (4) weeks of
paid vacation per year, with such vacation to be scheduled and
taken in accordance with DCOF's standard vacation policies.
5. Business Expenses. The Employee will be entitled to
reimbursement for all routine expenses incurred by the Employee in
the normal course of his employment for and on behalf of DCOF All
extraordinary expenses for which the Employee desires to receive
reimbursement shall be approved in writing by DCOF
6. Death or Disability.
6.1 Termination of Employment. If the Employee becomes
physically or mentally disabled while employed by DCOF, and as a
result thereof becomes unable to continue the proper performance
of his duties hereunder, the Employee's employment hereunder shall
automatically continue for one year. Except where the Company has
provided disability income insurance for the Employee, in which
case the Employee shall be entitled to such benefits actually paid
under said policy, DCOF's obligation to pay any component of the
Employee's compensation package pursuant to Section 3.1 above
shall cease as of the date of the Employee's death, or, in the
case of disability, the Employee's last day of active employment
with DCOF.
6.2 Definition of Disabled. The Employee shall be considered
to be "disabled" for purposes of this Section 6, if, in the
judgment of two (2) licensed physicians (one of whom shall be
selected by the Board of Directors of DCOF and the other selected
by the Employee (or him personal representative)), the Employee is
unable to perform his customary duties under this Agreement
because of a physical or mental impairment or if the Employee is
unable to perform his customary duties and responsibilities under
this Agreement for one hundred twenty (120) days in any twelve
(12) month period for any reason whatsoever; provided, however,
that DCOF shall only pay the Employee his compensation package as
provided by Section 3.1 above up to thirty (30) days during said
disability period. The determination by such physicians shall be
binding and
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conclusive for all purposes. Upon the expiration of the one
hundred twenty (120) days, DCOF may, in its sole discretion,
terminate this Agreement.
7. Termination by DCOF.
7.1 Termination for Reasonable Cause. DCOF may terminate this
Agreement at any time before the last day of the Initial Term, or
before the last day of any Renewal Term if this Agreement is
renewed on the mutual agreement of the parties, for "reasonable
cause," as determined by the Board of Directors in the exercise of
its reasonable business judgment. The term "reasonable cause" as
used herein shall mean:
(a) The failure of the Employee to discharge or perform
his duties and obligations promptly and in good faith under this
Agreement and with due diligence and care;
(b) The refusal of the Employee to implement or adhere
to lawful or reasonable policies or directives of DCOF's Board of
Directors;
(c) Conduct of a criminal nature having an adverse
impact on DCOF's reputation and standing in the community;
(d) Conduct in violation of the Employee's common law
duty of loyalty and fiduciary duty owed to DCOF;
(e) Fraudulent conduct in connection with the business
or affairs of DCOF, regardless of whether such conduct is designed
to defraud DCOF or others; or
(f) Conduct in violation of any provision of this
Agreement or any other agreement or contract with DCOF.
The existence of reasonable cause shall be conclusively determined
by DCOF's Board of Directors. If the Employee's employment is
terminated for any of the reasons specified in subparagraphs (c),
(d), or (e) above, the Employee's employment may be terminated
immediately without any advance notice whatsoever. The Employee's
employment may be terminated for any of the reasons specified in
subparagraphs (a), (b) or (f) above, the Employee shall be
entitled to receive ten (10) days advance written notice of
termination. If the Employee's employment is terminated pursuant
to this Section 7. 1, DCOF's obligation to pay the Employee's
compensation package as determined pursuant to Section 3.1 above
shall cease as of the Employee's last day of work.
7.2 Normal Termination. This Employment Agreement shall
automatically terminate on the expiration of the Initial Term
without any notice from either party hereto, unless the parties
mutually agree in writing in advance to extend or renew this
Agreement for an additional Renewal Term. If the parties agree to
extend or renew this Agreement, this Agreement, as extended or
renewed, shall automatically terminate as of the last day of each
Renewal Term,
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without any notice from either party hereto, unless the parties
mutually agree in writing in advance to extend this Agreement for
an additional Renewal Term as provided herein.
7.3 Discontinuance of Operations. DCOF may terminate this
Agreement at anytime if DCOF discontinues its operations and
liquidates, becomes insolvent, voluntarily files for protection
under the Bankruptcy Code, files any petition or action in
bankruptcy or insolvency or files for the appointment of a
receiver or trustee or for the assignment of its assets for the
benefit of its creditors. DCOF specifically reserves the right to
discontinue its operations at any time and for any reason
whatsoever in the exercise of the reasonable business judgment of
its Board of Directors.
7.4 Final Compensation Payments. DCOF's obligation to pay the
Employee's compensation package pursuant to Section 3.1 above
shall terminate as of the last day of the Initial Term, or as of
the last day of any Renewal Term if this Agreement is extended or
renewed by the mutual written agreement of the parties hereto, or
on the day properly specified in any notice of termination issued
pursuant to any of the preceding paragraphs of this Section 7.
8. Termination by the Employee. The Employee may terminate
this Agreement at any time before the last day of the Initial
Term, or before the last day of any Renewal Term if this Agreement
is renewed by the mutual agreement of the parties, if DCOF
materially breaches this Agreement, which breach is not cured
within thirty (30) days of receipt of written notice of the breach
hereof.
9. Effect of Terminations Survival. Upon the proper
termination of this Agreement by DCOF or by the Employee as
provided herein, this Agreement shall thereupon be and become void
and of no further force or effect, except that the Covenant Not to
Compete set forth in Section 10 below and the Proprietary
Information provision set forth in Section 11 below shall survive
any said termination and shall continue to bind the Employee for
the period of time stated therein, and, in addition, the dispute
resolution procedures set forth in Section 17 below shall continue
to govern all disputes arising hereunder (except as set forth
therein), the representations and warranties set forth in Section
19 below shall continue in full force and effect. Any payments due
pursuant to the terms of this Agreement for services rendered
prior to the termination of this Agreement shall be made as
otherwise provided herein.
10. Employee's Covenant Not to Compete. The Employee
acknowledges that he will serve as the President and Chief
Executive Officer of DCOF and in such capacity the Employee will
be DCOF's representative with clients, customers, borrowers,
suppliers, investors and the potential clients, customers,
borrowers, suppliers, and investors in, of, to and from DCOF The
Employee also acknowledges that he will have access to
confidential information about DCOF and its clients, customers,
borrowers, suppliers, and investors and that he will have access
to other "Proprietary Information" (as that term is defined in
Section 11.3 below) acquired by DCOF at the expense of DCOF for
use in its business. The Employee has substantial contacts and
experience in and possesses special, unique and extraordinary
skills and knowledge related to all aspects of DCOF's business.
The Employee's contact base and professional skills and services
to
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DCOF are special, unique and extraordinary, and the continued
success of DCOF is highly dependent upon the Employee's discharge
of his duties and responsibilities as provided herein.
Accordingly, by execution of this Agreement:
10.1 Duration of Covenant. The Employee agrees that during
the Employment Period and for a period of twenty four (24) months
following Employee's termination of employment with DCOF for any
reason whatsoever (whether such termination shall be voluntary or
involuntary), unless such termination is the direct result of or a
response to a material breach of the Agreement by DCOF, the
Employee shall not violate the provisions of Section 10.2 below.
The Employee agrees that the twenty four (24) month period
referred to in the immediately preceding sentence shall be
extended by the number of days included in any period of time
during which the Employee is or was engaged in activities
constituting a breach of Section 10.2 below.
10.2 Prohibited Competitive Activities. During the time
period specified in Section 10.1 above, the Employee shall not:
(a) Directly or indirectly solicit any client,
customer, borrower, supplier, or investor in, of, to and from DCOF
for any company, corporation, partnership, entity or person other
than for and on behalf of DCOF in connection with the executive
and managerial duties delegated to the Employee pursuant to this
Agreement.
10.3 Need for Covenant and Legal Remedies. The Employee
expresses, agrees, and acknowledges that the Covenant Not to
Compete contained in this Section 10 is necessary for DCOF's
protection because of the nature and scope of DCOF's business and
the Employee's position with and the scope of the duties and
responsibilities delegated to the Employee by DCOF. Further, the
Employee acknowledges that, in the event of his breach of this
Covenant Not to Compete, money damages will not sufficiently
compensate DCOF for its injury caused thereby, and the Employee
accordingly agrees that in addition to such money damages, the
Employee may be restrained and enjoined from any continuing breach
of this Covenant Not to Compete without any bond or other security
being required by any court. The Employee acknowledges that any
breach of this Covenant Not to Compete will result in irreparable
damage, harm, and injury to DCOF.
10.4 Acknowledgements by the Employee. The Employee expressly
agrees and
(a) This Covenant Not to Compete is reasonable as to
time and geographical scope and area, and does not place any
unreasonable burden on the Employee.
(b) The general public will not be harmed as a result
of enforcement of this
Covenant Not to Compete.
(c) The Employee has requested or has had the
opportunity to request that his personal legal counsel review this
Covenant Not to Compete.
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(d) The Employee understands and hereby agrees to each
and every term and condition of this Covenant Not to Compete.
11. Proprietary Information.
11.1 Return of Proprietary Information. Upon the termination
of this Agreement for any reason whatsoever, the Employee shall
immediately turn over to DCOF any and all Proprietary Information
(as that term is defined in Section 11.3 below). The Employee
shall have no right to retain any copies of any material
qualifying as Proprietary Information for any reason whatsoever
after the termination of his employment hereunder without the
express written consent of DCOF.
11.2 Non-Disclosure. It is understood and agreed that, in the
course of his employment hereunder and through his activities for
and on behalf of DCOF, the Employee will receive, deal with, and
have access to DCOF's Proprietary Information and that the
Employee holds said DCOF's Proprietary Information in trust and
confidence for DCOF. The Employee agrees that he will not, during
the term of this Agreement or thereafter, in any fashion, form or
manner, directly or indirectly, retain, make copies of, divulge,
disclose or communicate to any person, company, partnership or
entity, in any manner whatsoever, except when necessary or
required in the normal course of the Employee's employment
hereunder and for the benefit of DCOF or with the express written
consent of DCOF, any of DCOF's Proprietary Information or any
information of any kind, nature, or description whatsoever
concerning any matters affecting or relating to DCOF's business or
affairs.
12. Termination of Prior Agreements. This Agreement
terminates and supersedes any and all prior agreements and
understandings between the parties hereto with respect to
employment or with respect to any form of direct or indirect
compensation of the Employee by DCOF.
13. Assignment. This Agreement is personal in nature and
neither of the parties hereto shall, without the prior written
consent of the other, assign or transfer this Agreement or any of
the rights or obligations hereunder; provided, however, that in
the event of the merger, consolidation, or sale of all or
substantially all of the assets of DCOF with or to any other
company, corporation, partnership, entity or person, this
Agreement shall, subject to the provisions hereof, be binding upon
and inure to the benefit of such successor and such successor
shall discharge and perform all of the promises, covenants,
duties, and obligations of DCOF hereunder.
14. Governing Law. Except as provided in Section 17.3 below,
this Agreement shall be governed in all respects, whether as to
validity, construction, capacity, performance or otherwise, by the
laws of the State of Utah, and no action involving this Agreement
or the enforcement of any mediation or arbitration award
thereunder may be brought in any judicial forum except in the
Second District Court of Utah or in the Federal District Court for
the District of Utah.
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15. Entire Agreement. This Agreement embodies the entire
agreement of the parties hereto respecting the matters within its
scope and may be modified only in a writing signed by both
parties.
16. Waiver. Failure to insist upon strict compliance with any
of the terms, covenants, or conditions hereof shall not be deemed
a waiver of any such term, covenant or condition, nor shall any
waiver or relinquishment of, or failure to insist upon strict
compliance with, any right or power hereunder at any one or more
times be deemed to constitute a waiver or relinquishment of such
right or power at any other time or times.
17. Dispute Resolution Procedures.
17.1 Consultation. Any dispute to be resolved pursuant to the
employment relationship created by this Agreement shall be
resolved as follows:
(a) The complaining party shall write a description of
the facts giving rise to the dispute and shall send it to the
other party as provided in this Agreement for the delivery of
notices. This description shall explain the nature of the problem
and refer to the relevant Sections of this Agreement on which the
complaint is based. The complaining party shall also set forth a
proposed solution to the problem, including a specific time frame
within which the parties must act.
(b) The party receiving the description must respond in
writing within fifteen (15) days after receipt of the description
with an explanation, including references to the relevant Sections
of this Agreement and a response to the proposed solution.
(c) Not more than ten (10) days after receipt of the
response referenced in Section 17.1(b) above, the parties must
meet and discuss options for resolving the dispute. The
complaining party must initiate the scheduling of this meeting.
17.2 Mediation. If the meeting does not resolve the dispute,
then a settlement conference shall be held in Utah County, Utah
not more than thirty (30) days after the unsuccessful meeting. The
complaining party must initiate the scheduling of the conference.
The parties shall try to agree on a retired judge of the District
Court, in and for Utah County, State of Utah, to mediate the
conference. If the parties are unable to agree on a retired judge,
they shall ask Judicial Arbitration & Mediation Services, Inc.
("JAMS") to provide a list of three such retired judges who are
available and each party shall strike one (1) of such retired
judges. The remaining retired judge shall serve as the mediator at
the settlement conference.
17.3 Arbitration. Any dispute not resolved pursuant to
Section 17.1 or 17.2 above shall, if demanded by either party, be
finally resolved and determined by binding arbitration in the
County of Utah, State of Utah, under the administration of JAMS in
accordance with the law of the State of Utah and the JAMS Rules of
Practice and Procedure for the Arbitration of Commercial Disputes
(collectively, the "Rules").
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(a) Proceedings. Subject to appropriate protective
orders, the parties to the arbitration shall facilitate the
arbitration by: (1) making available to one another and to the
arbitrator for inspection, copying and extraction all documents,
books, records under the control of such party that are relevant
to the subject matter of the arbitration proceeding; (2)
conducting arbitration hearings to the greatest extent possible on
successive days; (3) observing strictly the periods established by
the Rules or by the arbitrator for the submission of evidence or
briefs; and (4) making reasonably available to one another in
arbitration discovery and to the arbitrator all personnel who are
under the control of such party or who control such party and who
have information relevant to the arbitration proceeding.
(b) In the arbitration proceeding, depositions may be
taken and discovery obtained in accordance with the Rules. The
arbitrator, in his or her discretion, may impose sanctions to
enforce discovery and may limit discovery.
(c) Until the arbitration award is rendered, neither
party to the arbitration proceeding shall have any right to apply
to or appeal to any court in connection with any question of law
arising in the course of the arbitration proceeding except to
enforce arbitration, provided that either such party may apply to
any court for (1) an injunction or other provisional or interim
relief in support of arbitration or pursuant to Section 17.3(b)
above, and any such application shall not be deemed incompatible
with or a waiver of the agreement to arbitrate, or (2) a temporary
restraining order, preliminary injunction or other interim relief
to enforce this Agreement, provided that the decision to award
permanent injunctive relief shall be determined by arbitration.
(d) Any award rendered by the arbitrator shall be final
and binding upon each party to the arbitration proceeding and
judgment on the award may be entered in any court of competent
jurisdiction in Utah County, State of Utah. The arbitration award,
where appropriate, may be enforced by such court through
injunctive or other equitable relief, as well as being enforced at
law, including the awarding of damages. The arbitrator also may
issue decisions for interim, interlocutory, provisional or partial
relief, including temporary restraining orders, preliminary
injunctions, orders to compel discovery, orders of attachment and
protective orders, any of which may be enforced as an arbitration
award by any court of competent jurisdiction. Any arbitration
award for money shall be made and shall be payable in U.S.
dollars. The arbitrator may award interest from the date of any
breach of this Agreement and shall fix the rate of interest on any
amount awarded from the date of the award to the date the award is
paid in full.
18. Interpretation; Severability. The headings and captions
used in this Agreement are for convenience only and shall not be
considered in interpreting this Agreement. Notwithstanding any
rule or maxim of construction to the contrary, any ambiguity or
uncertainty in this Agreement shall not be construed against
either of the parties hereto based upon authorship of any of the
provisions hereof. In the event that a court of competent
jurisdiction determines that any portion of this Agreement is in
violation of any statute, law, rule or public policy, then only
the portions
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of this Agreement that violate such statute, law, rule or public
policy shall be stricken. All portions of this Agreement that do
not violate any statute, law, rule or public policy shall continue
in full force and effect. Further, any court order striking any
portion of this Agreement shall modify the stricken terms as
narrowly as possible to give as much effect as possible to the
intentions of the parties under this Agreement.
19. Representations and Warranties.
19.1 As of the date hereof, the Employee represents and
warrants to DCOF as follows:
(a) The Employee has received all required approvals
and consents necessary to enter into and perform the services
required under this Agreement.
(b) There is no pending or threatened litigation or
proceedings against the Employee, except as previously disclosed
to the Company.
19.2 As of the date hereof, DCOF represents and warrants to
the Employee as follows:
(a) DCOF has received all required approvals and
consents necessary to enter into and perform under this Agreement.
To the best of DCOF's knowledge, there is no pending or threatened
litigation or proceedings against DCOF.
(b) DCOF is a corporation duly organized, validly
existing, and in good corporate standing under the laws of the
State of Nevada with all requisite corporate power and authority
to own its assets and carry on its business as now owned and as
now conducted, respectfully.
(c) There is no pending or threatened litigation or
proceedings against the Intellectual Property Rights (as that term
is defined below). For purposes of this Section 19.2,
"Intellectual Property Rights" shall include any information,
materials, technical data or know-how, including, but not limited
to, that which relates to research, development, market
demographics, products, formulas, services, inventions, processes,
formulations, extracts, techniques, strategies, hardware,
equipment, methods, designs, software, drawings, marketing
sources, information, investor, borrower, opportunities, and/or
contracts or trade secrets.
20. Attorney's Fees. If either party incurs any attorney's
fees in order to enforce the terms and conditions of this
Agreement, whether or not a legal action or an arbitration
proceeding is instituted, the party not in breach shall be
entitled to reimbursement for all attorney's fees and costs, in
addition to any other remedies such party may have at law or in
equity.
21. Notices. All notices, requests, consents, and other
communications hereunder will be in writing and will be deemed to
have been delivered on the date personally delivered, upon receipt
of a telecopy or telex, or three (3) days following the date
mailed first class, registered or certified mail, postage prepaid,
if addressed to the other party at the address first set forth
above
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or at such new address as may have previously been communicated to
the other party pursuant to this Section 21.
IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement effective as of the date first-above written.
DCOF: XX. XXXXXXXXXXX'X ORIGINAL FORMULAS, INC.
By: /s/ Xxxxxx Xxxxx
President
THE EMPLOYEE:
/s/ Xxxxx X. Xxxxxxx
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