EXECUTIVE EMPLOYMENT AGREEMENT
This
EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of this
29th day of October
2007, by and between Skins Inc., a Nevada corporation (the “Company”), and
XXXXXXX X. XXXXXXXX, an individual (the “Executive”). Company or Executive are
sometimes referred to herein as a “party,” or collectively, as the “parties”.
WHEREAS,
the Company desires to employ the Executive in the position of Chief Financial
Officer and to have the benefits of her expertise and knowledge;
WHEREAS,
the Executive desires to be employed by the Company as its Chief Financial
Officer; and
WHEREAS,
the parties desire to enter into this Agreement to establish the terms and
conditions of the Executive’s employment as Chief Financial Officer of the
Company.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements hereinafter
contained, and for other good and valuable consideration, it is hereby agreed
by
and between the parties hereto as follows:
1. Employment,
Duties, and Authority.
1.1 Employment.
The
Company hereby employs Executive per the terms of this agreement as the Chief
Financial Officer of the Company and Executive hereby accepts such terms of
employment as of the date hereof pursuant to the terms, covenants and conditions
set forth herein. Executive shall report to the Chief Executive Officer of
the
Company and shall report directly to the Board of Directors of the
Company.
1.2 Duties
and Authority.
During
the Term of this Agreement, Executive shall serve as the Company’s Chief
Financial Officer, and, in such capacity, shall perform the duties and functions
and
have
the authority that
is
commensurate with such position and such other duties, functions,
and
authority
consistent with her
status
as
Chief
Financial Officer
of the
Company as may be assigned by the Company’s Chief Executive Officer and Board of
Directors. Executive’s level of authority shall at all times be subject to the
policies and directives of the Board of Directors as they may from time to
time
deem in the best interests of the Company.
1.3 Time
and Efforts.
Executive shall devote her best efforts, energies, skills and attention to
the
business and affairs of the Company. Executive shall also devote substantially
all of her business time to her duties hereunder and shall, to the best of
her
ability, perform such duties in a manner that will faithfully and diligently
further the business interests of the Company. Executive’s services shall be
exclusive to the Company, but does not limit Executive’s right to be involved in
other not-for-profit, civic or charitable activities, provided that such
activities do not materially interfere with the providing of her services
hereunder.
2. Term.
The
term
of employment under this Agreement shall be for a period of three (3) years
commencing on the date hereof (the “Term”), unless terminated earlier pursuant
to the provisions of Section 5 below. Thereafter, this Agreement shall
automatically be renewed for successive one-year terms unless either party
shall
give the other no less than one hundred and eighty (180) days prior written
notice of intent not to renew this Agreement.
3. Compensation
and Benefits.
As
the
total consideration for Executive’s services rendered hereunder, Executive shall
be entitled to the following:
3.1 Base
Salary.
Executive shall be paid an annual base salary of Two Hundred Thousand Dollars
($200,000) per year (“Base Salary”) beginning on the date hereof and payable in
regular installments in accordance with the customary payroll practices of
the
Company. The Base Salary shall be subject to all legally required deductions
and
withholdings. The Base Salary will be reviewed by the Board of the Directors
of
the Company annually in a manner that is consistent with Company’s compensation
policy. The Base Salary may be increased (but not decreased without Executive’s
written consent) from time to time by the Board of Directors in its absolute
discretion, the determination of which shall be based upon such standards,
guidelines and factual circumstances as the Board of Directors or its
Compensation Committee deems relevant, including, without limitation, the
operating results for the Company during such calendar year, the importance
of
the efforts of Executive in achieving such operating results and the achievement
by the Company and/or Executive of performance goals previously established
by
the Board of Directors for such year.
3.2 Annual
Incentive Bonus.
During
each calendar year, or part thereof, the Company may pay Executive an annual
performance bonus as determined by the Board of Directors or the Compensation
Committee of the Company, in their sole discretion, the determination of which
shall be based upon such standards, guidelines and factual circumstances as
the
Board of Directors or its Compensation Committee deems relevant, including,
without limitation, the operating results for the Company during such calendar
year, the importance of the efforts of Executive in achieving such operating
results and the achievement by the Company and/or Executive of performance
goals
previously established by the Board of Directors for such contract year. The
performance bonus review for Executive shall occur at such times consistent
with
the Company’s compensation policy and procedures for executive officers. The
annual performance bonus shall be up to forty percent (40%) of the Base Salary
and may be paid in cash and/or stock options, at the discretion of the Board
of
Directors; provided that, however, the value of any stock option granted shall
not be counted against the forty percent maximum limit. Bonuses granted to
Executive under this Section 3.2, if any, shall be paid no later than as is
consistent with the Company’s policies for payment of annual incentive bonuses
to its executive officers.
3.3 Expenses.
During
employment, Executive is entitled to reimbursement for reasonable and necessary
business expenses incurred by Executive in connection with the performance
of
Executive’s duties. Payments to Executive will be made upon presentation of
itemized statements of such business expenses in such detail as the Company
may
reasonably require and pursuant to applicable Company policy. In
addition, Executive shall receive $500 per month for purposes of an automobile
allowance to be paid in accordance with the customary payroll practices of
the
Company.
The
Company shall pay reasonable legal fees actually incurred by Executive in
connection with the negotiation of this Agreement up to One Thousand Dollars
($1,000) upon presentation of an invoice for legal services.
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3.4 Vacation.
Executive shall be entitled to receive four (4) weeks of paid vacation each
calendar year. Any unused vacation days shall be carried over to the next
calendar year, provided Executive shall be entitled to no more than six (6)
weeks of paid vacation in any calendar year. All vacation leave is subject
to
and in accordance with the vacation policies of the Company with respect to
senior executives as are in effect from time to time.
3.5 Benefits.
Executive shall be entitled to participate in and receive all other benefits
made available by the Company to its executives, subject to and on a basis
consistent with the terms, conditions, co-payments and overall administration
of
such plans and arrangements, including without limitation, medical, dental,
vision, life and disability insurance plans and coverage, and any applicable
401k or other pension plans, to the extent they are provided.
3.6 Insurance
and Indemnification.
Executive shall receive coverage under the Company’s director’s and officer’s
liability insurance policy and indemnification in accordance with the Company’s
Certificate of Incorporation.
4. Equity
Compensation.
4.1
Participation
in Stock Option Plan.
Executive
has been granted a total of Two Hundred Thousand (200,000) options exercisable
at fair market value on the date of grant (the “Options”) under the Company’s
2005 Incentive Plan (the “Plan”) subject to the terms and conditions of the Plan
and the Company’s standard Stock Option Agreement.
4.2 Vesting
Schedule.
All
Options outstanding on the date of a Change of Control, as defined in the Plan,
that have not previously vested or terminated under the terms of the option
agreement shall be immediately and fully vested and exercisable upon the date
of
a Change of Control.
5. Termination.
5.1 Termination
For Cause.
The
Company may terminate Executive’s employment for Cause if the Company determines
that Cause exists.
(a) For
purposes of this Agreement, “Cause” shall mean
(i) A
material act of dishonesty, fraud, embezzlement, or misappropriation of funds
or
proprietary information in connection with the Executive’s
responsibilities;
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(ii) Executive’s
conviction of, or plea of nolo contendere to, a felony or a crime involving
moral turpitude which, directly or indirectly, has a material adverse effect
on
the Company;
(iii) Executive’s
willful or gross misconduct in connection with her employment duties which,
directly or indirectly, has a material adverse effect on the Company;
or
(iv) Executive’s
habitual failure or refusal to perform her employment duties under this
Agreement, if such failure or refusal is not cured by Executive within ten
(10)
days after receiving written notice thereof from the Company.
(b)
In
the
event that Executive’s employment is terminated pursuant to this Section
5.1:
(i) The
Company shall pay to Executive, or her representatives, on the date of
termination of employment (the “Termination Date”) only that portion of the Base
Salary provided in Section 3.1 that has been earned to the Termination Date,
and
any accrued but unpaid Vacation pay provided in Section 3.4, and any expense
reimbursements due and owing to Executive as of the Termination Date;
and
(ii) Executive
shall not be entitled to (i) any other salary, compensation, or severance,
(ii)
any Bonus pursuant to Section 3.2, (iii) any further vesting of stock options
held, nor (iv) any Benefits pursuant to Section 3.5, except for benefit
continuation under COBRA or similar state or federal legislation, as permissible
by law.
5.2 Termination
Due to Disability.
Executive’s employment hereunder may be terminated by the Company, to the extent
permitted by law, in the event that Executive has been unable to perform her
duties under this Agreement due to injury or illness for an aggregate of 180
days (inclusive of weekends and holidays) within any 12-month period, or in
the
event Executive is unable to perform the essential functions of her job due
to a
physical or mental disability and after reasonable accommodation made by the
Company, by providing Executive with written notice of termination. In such
event, the Company shall provide notice to Executive and make payment to the
Executive of all accrued salary, bonus compensation to the extent fully earned
and vested, vested deferred compensation (other than pension plan or profit
sharing plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of the Company in which Executive is a
participant to the full extent of the Executive's rights under such plans,
accrued vacation pay and any appropriate business expenses incurred by the
Executive in connection with her duties hereunder, all to the date of
termination, with the exception of any medical and dental benefits which, if
applicable, shall continue through the expiration of this Agreement, but the
Executive shall not be paid any other compensation or reimbursement of any
kind,
including without limitation, Severance Pay or Continued Benefits as defined
in
Section 5.4(a).
5.3 Termination
Due to Death.
In the
event of the Executive’s death during the term of this Agreement, the
Executive's employment shall be deemed to have terminated as of the last day
of
the month during which her death occurs and the Company shall promptly pay
to
her estate or such beneficiaries as the Executive may from time to time
designate all accrued salary, bonus compensation to the extent earned, vested
deferred compensation (other than pension plan or profit sharing plan benefits
which will be paid in accordance with the applicable plan), any benefits under
any plans of the Corporation in which the Executive is a participant to the
full
extent of the Executive’s rights under such plans, accrued vacation pay and any
appropriate business expenses incurred by the Executive in connection with
her
duties hereunder, all to the date of termination, but the Executive's estate
shall not be paid any other compensation or reimbursement of any kind, including
without limitation, Severance Pay or Continued Benefits as defined in Section
5.4(a).
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5.4 Termination
Without Cause or for Good Reason.
(a) Executive
may voluntarily terminate employment for Good Reason. For purposes of this
Agreement, “Good Reason” shall mean the a material breach by the Company of this
Agreement, provided such breach is not cured by the Company within thirty (30)
days from the date the Executive delivers a written notice of termination for
Good Reason, where such notice shall include the specific section of this
Agreement which was relied upon and the reason that the Company's act or failure
to act has given rise to her termination for Good Reason. Company may terminate
Executive’s employment without Cause. In the event the Executive’s employment is
terminated by the Company without Cause, or by the Executive for Good Reason,
the Company shall continue to be responsible to Executive for the payment of
all
Base Salary Amount solely for the Severance Period, as defined below, payable
on
the Company’s usual paydays (“Severance Pay”); provided,
however,
that
(i) Executive shall perform her covenants, duties and obligations under Sections
6.1 and 6.2 and (ii) Executive executes a separation agreement that includes
a
general mutual release by the Company and Executive in favor of the other and
their successors, affiliates and estates to the fullest extent permitted by
law,
drafted by and in a form reasonably satisfactory to the Company and Executive,
and Executive does not revoke the mutual general release within any legally
required revocation period, if applicable. All legally required and authorized
deductions and tax withholdings shall be made from the Severance Pay, including
for wage garnishments, if applicable, to the extent required by law. Company
shall continue to provide Executive during the Severance Period continued
coverage under the medical and other health plans of Company, as permissible
under law, in which Executive was a participant immediately prior to the date
of
her termination, subject to timely payment by Executive of all premiums,
contributions and other co-payments required to be paid during such period
by
senior executives of Company under the terms of such plans as in effect from
time to time (“Continued Benefits”). For purposes of this Agreement, Severance
Period shall mean a period of Nine
(9)
months
where the termination of Executive’s employment occurs during the first year of
employment under this Agreement, (ii) a period of Ten (10)
months
where the termination of Executive’s employment occurs during the second year of
employment under this Agreement, and (iii) a period of Eleven
(11)
months
where the termination of Executive’s employment occurs during the third year of
employment under this Agreement.
(b) In
addition, Executive shall be paid all accrued salary, bonus compensation to
the
extent earned, vested deferred compensation (other than pension plan or profit
sharing plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of the Company in which the Executive is
a
participant to the full extent of the Executive’s rights under such plans
(including the immediate vesting of any unvested Options, notwithstanding any
provisions of the Option award agreement to the contrary), accrued vacation
pay
and any appropriate business expenses incurred by the Executive in connection
with her duties hereunder, all to the date of termination. The Company shall
take all actions necessary, including formal consent by the Compensation
Committee if necessary, to effect the terms of this Section 5.4
(b).
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(c) Neither
Severance Pay nor Continued Benefits awarded to the Executive hereunder shall
be
reduced by reason of any amounts that may be payable to Executive following
the
termination of Executive’s employment hereunder.
(d)
Any
delay
in payments to the Executive of up to 6 months to the extent (and only to the
extent) needed to avoid the application of Section 409A of the Internal Revenue
Code of 1986 shall not be considered a breach by the Company of its obligations
hereunder.
6. Confidentiality;
Non-Solicitation.
6.1 Confidentiality.
Executive agrees that she will not use or disclose to any third party any trade
secret, information, knowledge or data not generally known or available to
the
public which Executive may have learned, discovered, developed, conceived,
originated or prepared during or as a result of Executive’s employment by the
Company with respect to the operations, businesses, affairs, products, services,
technology, intellectual properties, operations, customers, clients, policies,
procedures, accounts, personnel, concepts, format, style, techniques or software
of the Company (collectively “Confidential Information”) during the Term and
thereafter. Executive agrees to execute and deliver, as requested by the
Company, reasonable confidentiality agreements with respect to the Confidential
Information and consistent with this Agreement. Immediately following the
termination of Executive’s employment with the Company, Executive will return to
the Company all materials, except for Executive’s rolodex or personal phone book
and other personal items provided to Executive by the Company during the Term
hereof, all works created by Executive or others in the course of her or their
employment duties during the term of Executive’s employment hereunder, and all
copies thereof. Notwithstanding the foregoing, the limitations imposed on
Executive pursuant to this Section 6.1 shall not apply to Executive’s (i)
compliance with legal process or subpoena, or (ii) statements in response to
inquiry from a court or regulatory body, provided that Executive gives the
Company reasonable prior written notice of such process, subpoena or
request.
6.2 Non-Solicitation.
Executive agrees that at all times during the Term of this Agreement and for
one
(1) year after the termination of Executive’s employment with the Company,
Executive, except on behalf of the Company, shall not, directly or indirectly,
and in any way as related to the Business (as defined below), as it may change
from time to time:
(a) Solicit
or attempt to solicit the business of any customer or client of the
Company;
(b) Induce
or
attempt to induce any client or customer of the Company to reduce its business
with the Company; or
(c) Induce
or
attempt to induce any employee of the Company to terminate her or her employment
with the Company or attempt to hire any such person.
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7. Developmental
Rights.
Executive
agrees that any developments by way of invention, design, copyright, trademark
or other matters which may be developed or perfected by her during the term
hereof, and which relate to the business of the Company or its subsidiaries
or
affiliates, shall be the property of the Company without any interest therein
by
Executive, and she will, at the request and expense of the Company, cooperate
with the Company in applying for and prosecuting letters patent thereon in
the
United States or in foreign countries if the Company so requests, and will
assign and transfer the same to the Company together with any letters patent,
copyrights, trademarks and applications therefore; provided, however, that
the
foregoing shall not apply to an invention that Executive develops entirely
on
her own time without using the Company’s equipment, supplies, facilities or
trade secret information except for those inventions that either (i) relate
at
the time of conception or reduction to practice of the invention to the
Company’s business, or actual or demonstrably anticipated research or
development of the Company; or (ii) result from any work performed by Executive
for the Company.
8. Notices.
All
notices and other communications required or permitted under this Agreement,
which are addressed as provided below (or otherwise provided in writing by
the
party to receive such notice) shall be delivered personally, or sent by
certified or registered mail with postage prepaid, or sent by Federal Express
or
similar courier service with courier fees paid by the sender, and, in either
case, shall be effective upon delivery.
|
If
to the Company:
|
|
|
0000
Xxxxxxxx, 00xx Xxxxx
|
|
|
Xxx
Xxxx, XX 00000
|
|
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If
to Executive:
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Xxxxxxx
Xxxxxxxx
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[PERSONAL
ADDRESS]
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9. Assignability.
This
Agreement is personal in nature, and neither this Agreement nor any part of
any
obligation herein shall be assignable by Executive. The Company shall be
entitled to assign this Agreement to any affiliate or successor of the Company
that assumes the ownership or control of the business of the Company, and the
Agreement shall inure to the benefit of any such successor or
assign.
10. Entire
Agreement.
This
Agreement contains the entire agreement between the Company and Executive with
respect to the subject matter hereof, and supersedes all prior oral and written
agreements between the Company and Executive with respect to the subject matter
hereof.
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11. Captions.
The
Section captions herein are inserted only as a matter of convenience and
reference and in no way define, limit or describe the scope of this Agreement
or
the intent of any provisions hereof.
12. Waivers
and Further Agreements.
Neither
this Agreement nor any term or condition hereof may be waived or modified in
whole or in part as against the Company or Executive except by a written
instrument executed by or on behalf of the party to be charged therewith. Each
of the parties agrees to execute all such further instruments and documents
and
to take all such further action as the other party may reasonably require in
order to effectuate the terms and purposes of this Agreement as stated herein.
13. Amendments.
This
Agreement may not be amended, nor shall any change, modification, consent or
discharge be effected, except by a written instrument executed by or on behalf
of the party against whom enforcement of any change, modification, consent
or
discharge is sought.
14. Applicable
Law; Severability.
This
Agreement shall be interpreted, construed and enforced in accordance with the
laws of the State of New York, without regard or effect being given to that
State’s choice of law or conflict of law provisions. If any provision of this
Agreement shall be held to be illegal, invalid, or unenforceable, such provision
shall be construed and enforced as if it had been more narrowly drawn so as
not
to be illegal, invalid or unenforceable, and such illegality, invalidity or
unenforceability shall have no effect upon and shall not impair the
enforceability or any other provision of this Agreement.
15. No
Conflicting Obligations.
Executive
represents and warrants to the Company that she is not now under any obligation
to any person other than the Company, which would prevent Executive’s
performance of any of the covenants or duties hereinabove set forth, and that
Executive is not subject to any restrictive covenant, restraint, or agreement
as
a result of any employment with a prior employer.
16. Resolution
of Disputes - Binding Arbitration.
Pursuant
to the Federal Arbitration Act and applicable state law, the parties mutually
agree that all disputes arising out of or relating to this Agreement, the
matters covered herein, and Executive's employment with the Company shall be
decided by final and binding arbitration pursuant to the American Arbitration
Association Rules and Procedures for Employment Disputes in effect at the time.
Among the disputes that must be submitted to arbitration are those concerning
the interpretation, enforcement or alleged breach of this Agreement, and the
termination of Executive’s employment, as well as those based on state and/or
federal civil rights and discrimination laws, and other state and/or federal
statutes, torts, and public policies, regardless of whether such disputes are
asserted against the Company or its related entities, employees or agents,
or
against the Executive. The arbitration shall be held in New York City. The
decision or award of the Arbitrator shall be issued in writing pursuant to
New
York law and shall be final and binding on all parties, subject only to such
limited review as may be permitted or required by New York law. The prevailing
party shall be entitled to recover all provable damages and other remedies
that
would otherwise be available at law or equity in a civil action, including
costs
and fees that may be awarded by any applicable statute. Executive and the
Company agree that the right to take limited discovery and the right to seek
injunctive or other equitable relief in court prior to the arbitration shall
be
available to either party pursuant to applicable New York law covering the
arbitration of disputes, but the right to pursue a civil action or seek a jury
trial is waived and shall not be available pursuant to this agreement to
arbitrate all disputes.
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17. Counterparts.
This
Agreement may be executed in one or more facsimile counterparts, and by the
parties hereto in separate facsimile counterparts, each of which when executed
shall be deemed to be an original while all of which taken together shall
constitute one and the same instrument.
[SIGNATURE
PAGE TO FOLLOW]
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IN
WITNESS WHEREOF, this Agreement is executed as of the day and year first above
written.
COMPANY:
/s/
Xxxx
Xxxxx
Xxxx
Xxxxx, Chief
Executive Officer
EXECUTIVE:
XXXXXXX
X.
XXXXXXXX
/s/
Xxxxxxx X.
Xxxxxxxx
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