Exhibit 10.20
EMPLOYMENT
AGREEMENT
EMPLOYMENT AGREEMENT dated as of the first day of June 2005, by
and between Sweet Success Enterprises inc., a Nevada corporation (“Employer”),
and Xxxxxxx X Xxxxxxxxx (“Employee”).
WHEREAS, Employer desires to continue to employ Employee, and Employee
desires to accept such continued employment, upon the terms and conditions
contained herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth in this Agreement, the parties hereto agree as follows:
1. EMPLOYMENT.
Employer hereby employs Employee, and Employee hereby accepts such
employment, as Chairman and Chief Executive Officer of the Company and in such
other capacities and for such other duties and services as shall from time to time
be mutually agreed upon by Employer and Employee.
2. FULL TIME OCCUPATION.
Employee shall devote Employee’s entire business time, attention, and
efforts to the performance of Employee’s duties under this Agreement, shall
serve Employer faithfully and diligently, and shall not engage in any other
employment while employed by Employer. Notwithstanding the foregoing, Employee
may sit on boards of various For Profit and charitable/non profit organizations
3. COMPENSATION AND OTHER BENEFITS.
(a) SALARY. Employer shall pay to Employee, a base salary at an
annual rate of $160.000.00 during the period from Date of Funding in excess of
5 million dollars through December 31, 2005, $225.000.00 during the period
from January 1, 2006 through December 31, 2006, and $280.000.00
commencing on January 1, 2007, and $335.000.00 commencing on January 1
2008, and $400.000.00 commencing on January 1 2009 to be paid in equal
monthly installments, or in such other periodic installments upon which
Employer and Employee shall mutually agree.
(b) BONUS. Employee shall be eligible to receive an annual bonus
in such an amount, if any, to be determined by the Board of Directors of
Employer or such committee of the Board of Directors as may be designated by
the Board of Directors based upon such factors as may be deemed relevant by the
Board of Directors or committee thereof, including the performance of Employee.
(c) FRINGE BENEFITS. Employee shall be entitled to participate in
any group insurance, hospital, medical, dental, accident, disability, pension,
retirement, vacation,
expense reimbursement, and other plans, programs, or benefits approved
by the Board of Directors or a duly constituted committee of the Board of
Directors and made available from time to time to executive employees of
Employer generally during the term of Employee’s employment hereunder. The
foregoing shall not obligate Employer to adopt or maintain any particular plan,
program, or benefit.
(d) CAR ALLOWANCE. Employee shall be entitled to receive a monthly
car allowance of $1.200.00.
(e) VACATION. Employee shall be entitled to paid vacation in
accordance with Employer’s vacation policy for executive officers.
(f) REIMBURSEMENT. Employer shall reimburse Employee for all
travel and entertainment expenses and other ordinary and necessary business
expenses incurred by Employee in connection with the business of Employer and
Employee’s duties under this Agreement. The term “business expenses” shall not
include any item not deductible in whole or in part by Employer for federal
income tax purposes. To obtain reimbursement, Employee shall submit to Employer
receipts, bills or sales slips for the expenses incurred. Reimbursements shall
be made by Employer monthly within 10 days of presentation by Employee of evidence
of the expenses incurred.
(g) LIFE INSURANCE POLICIES. During the term of Employee’s
employment pursuant to this Agreement, Employer shall pay premiums for two life
insurance policies on the life of Employee, one of which policies shall name
Employer as the beneficiary and one of which policies shall name as beneficiary
a person or entity to be designated from time to time by Employee. The face
amount of the policy naming Employer as the beneficiary shall be $1.000.000.00 ,
and the face amount of the policy naming as beneficiary a person or entity to
be designated by Employee shall be $500.000.00.
(h) DISABILITY POLICY. During the term of Employee’s employment
under this Agreement, Employer shall reimburse Employee for premiums on a
disability policy providing for coverage at a rate equal to 50% of Employee’s
base salary in effect from time to time under this Agreement.
4. TERM OF EMPLOYMENT.
(a) EMPLOYMENT TERM. The term of this Agreement shall be for a
period of five years commencing as of the date hereof and from year to year
thereafter, unless and until terminated by either party giving written notice
to the other not less than 180 days prior to the end of the then-current term.
(b) TERMINATION UNDER CERTAIN CIRCUMSTANCES. Notwithstanding
anything to the contrary herein contained:
(i) DEATH. Employee’s employment shall be automatically
terminated, without notice, effective upon the date of Employee’s death.
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(ii) DISABILITY. If Employee shall fail, for a period of more than
90 consecutive days, or for 90 days within any 180 day period, to perform
Employee’s duties under this Agreement as the result of illness or other
incapacity, Employer may, at its option and upon notice to Employee, terminate
Employee’s employment effective on the date of that notice.
(iii) UNILATERAL DECISION OF EMPLOYER. Employer may, at its
option, upon notice to Employee, terminate Employee’s employment effective on
the date of that notice.
(iv) UNILATERAL DECISION BY EMPLOYEE. Employee may, at his option
and upon notice to Employer, terminate Employee’s employment effective on the
date of that notice.
(v) CERTAIN ACTS. If Employee is found by a court of competent
jurisdiction to have engaged in an act or acts, in connection with his
employment pursuant to this Agreement or his service as a member of the Board
of Directors of Employer, involving a crime, moral turpitude, fraud, or
dishonesty, Employer may, at its option and upon written notice to Employee,
terminate Employee’s employment effective on the date of that notice.
(vi) GOOD REASON. Employee may, at Employee’s option and upon
written notice to Employer specifying the reasons therefore, terminate Employee’s
employment effective on the date of that notice, for Good Reason. For purposes
of this Agreement, “Good Reason” shall mean and include each of the following
(unless Employee has expressly agreed to such event in a signed writing): (1) the
demotion of Employee by Employer, which shall be considered (a) an adverse
change in Employee’s title, office, or authority as in effect on the date of
this Agreement; or (b) a reduction by Employer in Employee’s salary
pursuant to
Section 3(a) of this Agreement.
(vii) CHANGE IN CONTROL. Employee may, at Employee’s option and
upon notice to Employer, terminate Employee’s employment effective on the date
of the notice in the event of a “Change of Control” of Employer, as defined
below.
(c) RESULT OF TERMINATION. In the event of the termination of
Employee’s employment pursuant to Sections 4(b)(i) or (ii) above,
Employee’s estate or Employee, as the case may be, shall be entitled to receive
an amount equal to Employee’s fixed salary as provided in Section 3(a)shall
receive 50% of base salary for remainder of the employment contract. In the event of the termination of
Employee’s employment pursuant to Section 4(b)(iii) or (vi) above,
Employee shall receive, within 10 days after the termination of employment,
Employee’s fixed compensation for the remainder of the employment term set
forth in Section 4(a) of this Agreement. In the event of the
termination of Employee pursuant to Section 4(b)(iv) or (v) above,
Employee shall receive no further compensation under this Agreement. In the
event of termination of Employee’s employment pursuant to Section 4(b)(vii) above,
Employer shall pay Employee his fixed salary for the longer of the remainder of
the employment term set forth in Section 4(a) of this Agreement or a
period of 18 months after such termination, any unpaid fringe benefits, and
such bonus as may have been earned prior to the Change in Control, all within
10 days after the termination of employment.
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(d) CHANGE IN CONTROL. The term “Change in Control” of Employer
shall mean a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934 as in effect on the date
of this Agreement or, if Item 6(e) is no longer in effect, any regulations
issued by the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934 which serve similar purposes; provided that, without
limitation, such a Change in Control shall be deemed to have occurred if and when
(i) any person (as such term is used in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934) directly or
indirectly of equity securities of Employer representing 20 percent or more of
the combined voting power of Employer’s then-outstanding equity securities,
except that this provision shall not apply to an acquisition which has been
approved by at least 75 percent of the members of the Board of Directors who
are not affiliates or associates of such person and by at least 80 percent of
the issued and outstanding shares of Employer’s Common Stock beneficially owned
by non-affiliates of such person;
(ii) during the period of this Agreement, individuals who, at the
beginning of such period, constituted the Board of Directors of Employer (the “Original
Directors”), cease for any reason to constitute at least a majority thereof
unless the election or nomination for election of each new director was approved
(an “Approved Director”) by the unanimous vote of a Board of Directors
constituted entirely of Existing Directors and/or Approved Directors; (iii) a
tender offer or exchange offer is made whereby the effect of such offer is to
take over and control Employer, and such offer is consummated for the equity
securities of Employer representing 20 percent or more of the combined voting
power of Employer’s then-outstanding voting securities; (iv) Employer is
merged, consolidated, or enters into a reorganization transaction with another
person and, as the result of such merger, consolidation, or reorganization,
less than 75 percent of the outstanding equity securities of the surviving or
resulting person shall then be owned in the aggregate by the former stockholders
of Employer; or (v) Employer transfers substantially all of its assets to
another person or entity that is not a wholly owned subsidiary of Employer.
Sales of Employer’s Common Stock beneficially owned or controlled by Employee
shall not be considered in determining whether a Change in Control has
occurred.
5. COMPETITION AND CONFIDENTIAL INFORMATION.
(a) INTERESTS TO BE PROTECTED. The parties acknowledge that
Employee will perform essential services for Employer, its employees, and its
stockholders during the term of Employee’s employment with Employer. Employee
will be exposed to, have access to, and work with, a considerable amount of
Confidential Information (as defined below). The parties also expressly
recognize and acknowledge that the personnel of Employer have been trained by,
and are valuable to, Employer and that Employer will incur substantial
recruiting and training expenses if Employer must hire new personnel or retrain
existing personnel to fill vacancies. The parties expressly recognize that it
could seriously impair the goodwill and diminish the value of Employer’s
business should Employee compete with Employer in any manner whatsoever. The
parties acknowledge that this covenant has an extended duration; however, they
agree that this covenant is reasonable and it is necessary for the protection
of Employer, its stockholders, and employees. For these and other reasons, and
the fact that there are many other employment opportunities available to
Employee if he should terminate his employment, the parties are in full and
complete agreement that the following restrictive covenants are fair and
reasonable and are entered into freely, voluntarily, and knowingly.
Furthermore, each party was given the opportunity to consult with independent legal
counsel before entering into this Agreement.
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(b) NON-COMPETITION. During the term of Employee’s employment with
Employer and for the period ending 18 months after the termination of Employee’s
employment with Employer, regardless of the reason therefore, Employee shall
not (whether directly or indirectly, as owner, principal, agent, stockholder,
director, officer, manager, employee, partner, participant, or in any other
capacity) engage or become financially interested in any competitive business
conducted within the Restricted Territory (as defined below). As used herein,
the term “competitive business” shall mean any business that sells or provides
or attempts to sell or provide products or services the same as or
substantially similar to the products or services sold or provided by Employer
during Employee’s employment hereunder, and the term “Restricted Territory”
shall mean any state in which Employer sells products or provides services
during Employee’s employment hereunder.
(c) NON-SOLICITATION OF EMPLOYEES. During the term of Employee’s
employment and for a period of 18 months after the termination of Employee’s
employment with Employee, regardless of the reason therefore, Employee shall
not directly or indirectly, for himself, or on behalf of, or in conjunction
with, any other person, company, partnership, corporation, or governmental
entity, seek to hire or hire any of Employer’s personnel or employees for the
purpose of having any such employee engage in services that are the same as or
similar or related to the services that such employee provided for Employer.
(d) CONFIDENTIAL INFORMATION. Employee shall maintain in strict
secrecy all confidential or trade secret information relating to the business
of Employer (the “Confidential Information”) obtained by Employee in the course
of Employee’s employment, and Employee shall not, unless first authorized in
writing by Employer, disclose to, or use for Employee’s benefit or for the
benefit of, any person, firm, or entity at any time either during or subsequent
to the term of Employee’s employment, any Confidential Information, except as
required in the performance of Employee’s duties on behalf of Employer. For
purposes hereof, Confidential Information shall include without limitation any
materials, trade secrets, knowledge, or information with respect to management,
operational, or investment policies and practices of Employer; any business
methods or forms; any names or addresses of customers or data on customers or
suppliers; and any business policies or other information relating to or
dealing with the management, operational, or investment policies or practices
of Employer.
(e) RETURN OF BOOKS AND PAPERS. Upon the termination of Employee’s
employment with Employer for any reason, Employee shall deliver promptly to
Employer all files, lists, books, records, manuals, memoranda, drawings, and
specifications; all cost, pricing, and other financial data; all other written
or printed materials that are the property of Employer (and any copies of
them); and all other materials that may contain Confidential Information
relating to the business of Employer, which Employee may then have in Employee’s
possession, whether prepared by Employee or not.
(f) DISCLOSURE OF INFORMATION. Employee shall disclose promptly to
Employer, or its nominee, any and all ideas, designs, processes, and
improvements of any kind relating to the business of Employer, whether
patentable or not, conceived or made by Employee, either alone or jointly with
others, during working hours or otherwise, during the entire period of Employee’s
employment with Employer or within six months thereafter.
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(g) ASSIGNMENT. Employee hereby assigns to Employer or its
nominee, the entire right, title, and interest in and to all inventions,
discoveries, and improvements, whether patentable or not, that Employee may
conceive or make during Employee’s employment with Employer, or within six
months thereafter, and which relate to the business of Employer.
(h) EQUITABLE RELIEF. In the event a violation of any of the
restrictions contained in this Section is established, Employer shall be
entitled to preliminary and permanent injunctive relief as well as damages and
an equitable accounting of all earnings, profits, and other benefits arising
from such violation, which right shall be cumulative and in addition to any
other rights or remedies to which Employer may be entitled. In the event of a
violation of any provision of subsection (b), (c), (f), or (g) of
this Section, the period for which those provisions would remain in effect
shall be extended for a period of time equal to that period beginning when such
violation commenced and ending when the activities constituting such violation
shall have been finally terminated in good faith.
(i) RESTRICTIONS SEPARABLE. If the scope of any provision of this
Agreement (whether in this Section 5 or otherwise) is found by a Court to
be too broad to permit enforcement to its full extent, then such provision
shall be enforced to the maximum extent permitted by law. The parties agree
that the scope of any provision of this Agreement may be modified by a judge in
any proceeding to enforce this Agreement, so that such provision can be
enforced to the maximum extent permitted by law. Each and every restriction set
forth in this Section 5 is independent and severable from the others, and
no such restriction shall be rendered unenforceable by virtue of the fact that,
for any reason, any other or others of them may be unenforceable in whole or in
part.
6. MISCELLANEOUS.
(a) NOTICES. All notices, requests, demands, and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made, and received (i) if
personally delivered, on the date of delivery, (ii) if mailed, three days
after deposit in the United States mail, registered or certified, return
receipt requested, postage prepaid, and addressed as provided below, or (iii) if
by a courier delivery service providing overnight or “next-day” delivery, on
the next business day after deposit with such service addressed as follows:
(1) If to Employer:
Sweet Success Enterprises Inc
0000 XX Xxxx 000 Xxxxx 000
Xxx Xxxxxxx Xxxxx 00000
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(2) If to Employee, to the address set forth in the records of
Employee.
Either party may alter the address to which communications or copies
are to be sent by giving notice of such change of address in conformity with
the provisions of this Section 6 for the giving of notice.
(b) INDULGENCES; WAIVERS. Neither any failure nor any delay on the
part of either party to exercise any right, remedy, power, or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power, or privilege preclude any other
or further exercise of the same or of any other right, remedy, power, or
privilege, nor shall any waiver of any right, remedy, power, or privilege with
respect to any occurrence be construed as a waiver of such right, remedy,
power, or privilege with respect to any other occurrence. No waiver shall be
binding unless executed in writing by the party making the waiver.
(c) CONTROLLING LAW. This Agreement and all questions relating to
its validity, interpretation, performance and enforcement, shall be governed by
and construed in accordance with the laws of the state of Nevada,
notwithstanding any Nevada or other conflict-of-interest provisions to the
contrary.
(d) BINDING NATURE OF AGREEMENT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors, and assigns, except that no party may
assign or transfer such party’s rights or obligations under this Agreement
without the prior written consent of the other party.
(e) EXECUTION IN COUNTERPART. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of the parties reflected hereon as the signatories.
(f) PROVISIONS SEPARABLE. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for
any reason any other or others of them may be invalid or unenforceable in whole
or in part.
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(g) ENTIRE AGREEMENT. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, inducements and conditions, express or implied, oral or
written, except as herein contained. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof. This Agreement may not be modified or amended other
than by an agreement in writing.
(h) PARAGRAPH HEADINGS. The paragraph headings in this Agreement
are for convenience only; they form no part of this Agreement and shall not
affect its interpretation.
(i) GENDER. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine, or neuter, as
the context requires.
(j) NUMBER OF DAYS. In computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays, Sundays, and
holidays; provided, however, that if the final day of any time period falls on
a Saturday, Sunday, or holiday, then the final day shall be deemed to be the
next day that is not a Saturday, Sunday, or holiday.
7. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the parties hereto; provided that because the
obligations of Employee hereunder involve the performance of personal services,
such obligations shall not be delegated by Employee. For purposes of this
Agreement successors and assigns shall include, but not be limited to, any
individual, corporation, trust, partnership, or other entity that acquires a
majority of the stock or assets of Employer by sale, merger, consolidation,
liquidation, or other form of transfer. Employer will require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
to all or substantially all of the business and/or assets of Employer to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that Employer would be required to perform it if no such
succession had taken place. Without limiting the foregoing, unless the context
otherwise requires, the term “Employer” includes all subsidiaries of Employer.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
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Sweet Success Enterprises Inc.
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By:
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Xxxxxxx
Xxxx Director
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By:
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Xxxxxxx
X Xxxxxxxxx
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