Exhibit 10.7
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of
January _1_, 2007, is entered into between Challenger Powerboats, Inc., a Nevada
corporation (the "Company" or "Xtreme"), and Xxxx Xxxxxxx (the "Employee").
WHEREAS, the parties are entering into this Agreement to set forth their
respective rights and obligations with respect to the Employee's employment by
the Company;
WHEREAS, the parties anticipate the Company's purchase of IMAR Group LLC,
on which this Agreement is contingent;
NOW THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT. The Company shall employ the Employee and the Employee
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hereby accepts such employment with the Company, upon the terms and conditions
hereinafter set forth for the period beginning on January _1_, 2007 (the
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"Effective Date") and ending on the Termination Date determined pursuant to
Section 4 (the "Employment Term").
2. POSITION AND DUTIES.
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(a) During the Employment Term, the Employee shall serve as the
Marketing Director of Challenger Powerboats and Challenger subsidiary
companies, Marine Holdings, Inc. d/b/a Challenger Powerboats
("Marine") and IMAR Group, LLC, d/b/a Sugar Sand and Gekko. The
Employee shall report to the Company's CEO and perform such duties as
are assigned to him by the CEO. The Employee acknowledges and agrees
that he owes a fiduciary duty of loyalty to the Company and he will,
at all times, discharge his duties and otherwise act in a manner
consistent with the best interests of the Company by faithfully and
diligently executing all duties assigned to him.
(b) During the Employment Term, the Employee shall devote his best
efforts and his full time, attention and energies to the performance
of his duties and responsibilities under this Agreement. During the
Employment Term and as set forth in section 8, below, the Employee
shall not engage in any business activity, which conflicts with the
duties of Employee hereunder.
(c) Employee shall not hire any employees or officers without the
approval of the Company's CEO and Board of Directors.
3. COMPENSATION AND BENEFITS. As compensation in full for the services
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to be rendered by the Employee under this Agreement, the Company agrees to
compensate the Employee as follows:
(a) During the Employment Term, the Company shall pay Employee an
annual salary of one-hundred thousand dollars ($100,000) ("Base
Salary"), which shall be paid semi-monthly, which may be increased at
the discretion of the CEO of the Company.
(b) The Employee shall also be entitled to receive a quarterly cash
bonus ("Cash Bonus") of up to five percent (5%) of the Base Salary.
The Cash Bonus shall be calculated based on actual performance applied
to performance metrics ("the Metrics"), as well as a discretionary
portion to be determined by the CEO and the Company's Board of
Directors. The Metrics shall be mutually agreed upon by the Company's
Board of Directors, the CEO and the Employee.
(c) Employee shall be eligible to participate in those non-salary
benefits and programs generally made available to employees of the
Company, as are in effect from time to time, including, but not
limited to, any health, dental, life or disability insurance plan,
401(k) or other retirement savings plan, and any other employee
benefit plan, subject to any and all terms, conditions, and
eligibility requirements of said plans or benefits, as may from time
to time be prescribed by the Company. Full family health insurance,
individual life and disability insurance (short-term and long-term)
coverage shall be provided for Employee at the Company's expense
immediately upon execution of this Employment Agreement and throughout
the Employment Term. The life insurance policy shall be for $20,000
per the Company policy currently in place.
(d) Employee shall be entitled to a vacation period or periods each
year during the Employment Term in accordance with the Company's
vacation policy for officers.
(e) Upon submission of proper vouchers and evidence, the Company will
promptly pay or reimburse Employee for reasonable transportation,
hotel, travel and related expenses incurred by Employee on business
trips away from Employee's principal office, and for other business
expenses reasonably incurred by Employee in connection with the
business of the Company during the Employment Term, all subject to
such limitations and procedures as may from time to time be prescribed
by the Board of Directors of the Company or the CEO.
4. TERMINATION.
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(a) The Employee's employment under this Agreement shall terminate
upon the earliest to occur of (the date of such occurrence being the
"Termination Date") (1) two (2) years of employment under this
Agreement, unless the parties mutually agree to extend Employee's
employment, (2) the Employee's resignation, (3) the Employee's death
or a Disability (an "Involuntary Termination"), or (4) the termination
of the Employee by theCompany's Board of Directors. The effective date
of a resignation by Employee or termination without "Cause," as such
term is defined below, shall be thirty (30) days after the date of a
written or oral resignation by the Employee which is received by the
Company's CEO in the case of resignation, or the Employee, in the case
of termination without Cause. The effective date of an Involuntary
Termination shall be the date of death or, in the event of a
Disability, the date specified in a notice delivered to the Employee
by the Company. The effective date of a Termination for Cause shall be
the date specified in a notice delivered to the Employee by the
Company.
(b) For purposes of this Agreement, "Cause" shall mean those
instances in which Employee actually, or the Board of Directors
(excluding the Employee if the Employee is a member of the Board at
such time) determines in good faith that Employee has (i)
intentionally furnished materially false or misleading information to
the Company's CEO or Board of Directors that results or could
reasonably be expected to result in detriment to the Company, (ii)
willfully refused or failed to follow the material instructions of the
CEO with respect to any matter related to the operation or management
of the Company, (iii) engaged in the use of alcohol or drugs to an
extent that, in the good faith determination of the CEO or Board of
Directors (excluding the Employee if the Employee is a member of the
Board at such time), such use interferes with performance of the
Employee's duties and responsibilities, (iv) committed or engaged in
any felony or gross misdemeanor under applicable law, or (v) breached
his obligations under this Agreement in any material respect.
(c) For purposes of this Agreement, the term "Disability" shall mean
the physical or mental inability of the Employee to substantially
perform all of his duties under this Agreement for a period of ninety
(90) consecutive days or longer or for any 90 days in any consecutive
twelve (12) month period as determined by the Company's CEO or Board
of Directors.
5. EFFECT OF TERMINATION.
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(a) In the event the Company terminates this Agreement without Cause,
the Employee shall only have the right to receive the following:
(i) the continuation of the Employee's Base Salary for the time
remaining under this Agreement as set forth in Section 4(a)(1).
(ii) a pro-rated portion of the Cash Bonus set forth in Section
3, provided that the Employee has been employed for not less than
18 months under this Agreement and the Metrics have been achieved
as provided for in Section 3(b)(i) and 3(b)(ii); and
(iii) reimbursement of any expenses incurred prior to the
Termination Date for which the Employee shall not have been
previously reimbursed in accordance with the provisions of
Section 3(e), above.
(b) In the event this Agreement is terminated for any other reason
other than without Cause, including the additional reasons set forth
in Section 4, above, the Employee shall only be entitled to
reimbursement of expenses as set forth above at Section 3(e).
(c) Upon any Termination of this Agreement, neither the Employee nor
his beneficiaries or estate shall have any further rights under this
Agreement or any rights arising out of this Agreement other than as
provided in this Section 5. The rights of the Employee set forth in
this Section 5 are intended to be the Employee's exclusive remedy for
termination and, to the greatest extent permitted by applicable law,
the Employee waives all other remedies.
(d) Following any termination, Employee shall fully cooperate with
Company in all matters relating to the winding up of the Employee's
work on behalf of Company and the orderly transfer of any such pending
work and of Employee's duties and responsibilities for Company to such
other person or persons as may be designated by the Company in its
sole discretion. Employee shall not be entitled to any additional pay
or severance in connection with such cooperation.
6. NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION. The Employee
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will not disclose, disseminate or use at any time, either during the Employment
Term or thereafter, any Confidential Information of which the Employee is or
becomes aware, whether or not such information is or was developed by him,
except to the extent that such disclosure or use is directly related to and
required by the Employee's performance of duties assigned to the Employee by the
Company. For purposes of this Agreement, the term "Confidential Information"
shall mean information that is not generally known to the public and that is
used, developed or obtained by the Company in connection with the Business,
including, without limitation (a) information, observations, procedures and data
obtained by the Employee while employed by the Company concerning the business
or affairs of the Company; (b) planned or actual products or services; (c) costs
and pricing structures, customer, supplier or employee lists; (d) analyses,
drawings, photographs and reports; (d) computer software and hardware, including
operating systems, applications and program listings; (e) data bases; (f)
accounting and business methods; (g) research and development, and (h)
inventions, devices, new developments, method and processes, technology and
trade secrets (including, without limitation all Work Product).
7. INVENTIONS AND PATENTS. The Employee agrees that all Work Product
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belongs to the Company (including any and all Work Product developed by the
Company prior to the date of this Agreement). The Employee will promptly
disclose such Work Product to the Board of Directors and perform all actions
reasonably requested by the Board (whether during or after the Employment Term)
to establish and confirm such ownership (including, without limitation, the
execution and delivery of assignments, consents, powers of attorney and other
instruments) and to provide reasonable assistance to the Company in connection
with the prosecution of any application for patents, trademarks, trade names,
service marks or reissues thereof or in the prosecution or defense of any claims
by or against the Company relating in any way to Work Product. For purposes of
this Agreement, the term "Work Product" shall mean all inventions, innovations,
improvements, technical information, systems, software or equipment
developments, methods, designs, analyses, drawings, reports, service marks,
trademarks, trade names, logos and all similar or related information (whether
patentable or unpatentable) which relates to the Company's actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by the Employee (whether or not
during usual business hours and whether or not alone or in conjunction with any
other person, group or entity) while employed by the Company, together with all
patent applications, letters patent, trademark, trade name and service xxxx
applications or registrations, copyrights and reissues thereof that may be
granted for or upon the foregoing. The Employee and the Company specifically
intend that this Section shall apply, without limitation, to the "Gekko Assets
and Technology" as such term is defined and referred to in the Asset and
Technology Acquisition Agreement between IMAR Group, LLC and Employee dated
January _1_, 2007.
8. NON-COMPETE, NON-SOLICITATION, NON-DISPARAGEMENT. The Employee
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acknowledges and agrees with the Company that during the course of the
Employee's employment with the Company, the Employee will have the opportunity
to develop relationships with existing employees, customers and other business
associates of the Company which relationships constitute goodwill of the
Company, and the Company would be irreparably damaged if the Employee were to
take actions that would damage or misappropriate such goodwill. Accordingly,
the Employee agrees as follows:
(a) The Employee acknowledges that the Business is operated in the
United States and markets for the Company's products and services are
located in the United States. Accordingly, during the Employment Term
until the sixth (6) month anniversary of the Termination Date (the
"Non-Compete Period"), the Employee shall not, directly or indirectly,
enter into, engage in, assist, give or lend funds to or otherwise
finance, be employed by or consult with, or have a financial or other
interest in, any business which is similar to or competitive with the
Business, whether for himself or as an independent contractor, agent,
stockholder, partner, or joint venture for any other person, group or
entity. To the extent that the covenant provided in this Section 8 (a)
may later be deemed by a court to be too broad to be enforced with
respect to its duration or with respect to any particular activity or
geographic area, the court making such determination shall have the
power to reduce the duration or scope of the provision, and add or
delete specific words or phrases to or from the provision. The
provision, as modified, shall then be enforced.
(b) The Employee covenants and agrees that during the term of his
employment and for six (6) months following the Termination Date, the
Employee will not, directly or indirectly, either for himself or for
any other person, group or entity (i) solicit any employee,
independent contractor or service provider of the Company to terminate
or modify his, her or its employment or other relationship with the
Company or employ or retain any person or entity, (ii) solicit any
customer, licensee, or licensor, of the Company or any service
provider to the Company to purchase or provide products or services on
behalf of the Employee or such other person, group or entity that are
competitive with the products or services provided by the Company, or
(iii) disparage the business reputation of the Company or its
management team.
(c) Employee acknowledges that the restrictions placed upon Employee
by this Section 8 are reasonable given the Employee's position with
the Company, the geographic area in which the Company markets its
products and services, and the consideration furnished in this
Agreement. Further, Employee also agrees that the provisions of this
section are fair and necessary to protect the Company and its business
interests and, that such provisions do not preclude the Employee from
utilizing unprotected information or from engaging in occupations in
unrelated fields or in a manner consistent with the requirements of
this Agreement.
9. RETURN OF COMPANY'S PROPERTY UPON TERMINATION. The Employee shall
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immediately deliver to the Company at the termination of the Employment Term or
at any time the Board of Directors may request, all Company property (including
but not limited to all documents, electronic files/records, keys, records,
computer disks, or other tangible or intangible things that may or may not
relate to or otherwise constitute Confidential Information, Work Product, or
trade secrets (as defined by applicable law) that Employee created, used,
possessed, or maintained while in the employ of the Company, from whatever
source.
10. ENFORCEMENT. Because the Employee's services are unique and
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because the Employee has access to Confidential Information and Work Product,
the parties hereto agree that money damages would be an inadequate remedy for
any breach of this Agreement. Therefore, in the event of a breach or threatened
breach of this agreement, the Company or its successors or assigns may, in
addition to other rights and remedies existing in their favor, apply to any
court of competent jurisdiction for specific performance and/or injunctive or
other relief in order to enforce, or prevent any violation of, the provisions
hereof (without posting a bond or other security).
11. MISCELLANEOUS.
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(a) This Agreement shall be binding upon and inure to the benefit of
Employee and his heirs and personal representatives, and the Company
and its successors, assigns and legal representatives. This Agreement
and the responsibilities/benefits hereunder are personal to Employee
and are not assignable or transferable by Employee.
(b) The Company shall have the right to offset against amounts due to
Employee hereunder by any amounts owed by Employee to Company,
including any advances.
(c) This Agreement constitutes the entire agreement between the
Company and Employee with respect to the subject matter hereof and
supersedes any and all previous agreements or understandings between
Employee and the Company concerning the subject matter hereof. This
Agreement may not be changed or amended without the prior written
consent of both of the parties hereto.
(d) All notices hereunder shall be in writing unless otherwise
specified and shall be deemed given on the third day after mailing
through the United States mail, certified mail, return receipt
requested, postage prepaid, or by overnight delivery to the persons
listed below or to such other person(s) and/or addresses as may be
designated from time to time in writing.
If to the Company:
Challenger Powerboats, Inc.
C/O Dutchess Capital Management LLC
00 Xxxxxxxxxxxx Xxx.
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Chairman
Fax: (000) 000-0000
If to Employee:
Xxxx Xxxxxxx
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
With a copy to:
Xxxxxxx X. Xxxxx
Xxxxxxxx & Weinstine, P.A.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
Fax 000-000-0000
(e) This Agreement shall be governed by and construed in accordance
with the laws of the State of Missouri.
(f) Any waiver by either party of any breach of any of the terms of
this Agreement shall not be considered a waiver of any subsequent
breach.
(g) In the event that any provision of this Agreement is held to be
unenforceable, then such enforceability shall in no way affect the
other terms and provisions of this Agreement which shall remain in
full force and effect.
(h) The captions herein are for the convenience of the parties and
are not to be construed as part of the terms of this Agreement.
(i) This Agreement may be amended, modified or supplemented only by
written agreement of the parties hereto, which agreement shall have
been duly authorized and approved by the CEO or Board of Directors of
the Company.
(j) The failure of the Company at any time or from time to time to
require performance of any of the Employee's obligations under this
Agreement shall in no manner affect the Company's right to enforce any
provision of this Agreement at any subsequent time, and the waiver by
the Company of any right arising out of any breach shall not be
construed as a waiver of any right arising out of any subsequent
breach.
(k) Any dispute or controversy arising under or in connection with
this Agreement, other than for injunctive relief sought by the Company
under Sections 6 and or 8 shall be settled exclusively by arbitration,
conducted before a panel of one arbitrator in the State of Missouri,
County of St. Louis in accordance with the rules of the American
Arbitration Association then in effect, and judgment may be entered on
the arbitrator's award in any court having jurisdiction. The decision
of the arbitrator shall be final and binding on the parties. Each
party shall bear its own legal fees in any dispute.
IN WITNESS WHEREOF, the parties hereto have signed and sealed this
Agreement as of the day and year first above written.
COMPANY:
CHALLENGER POWERBOATS, INC.
By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx, President and CEO
EMPLOYEE:
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
