EXHIBIT 10.10
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EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made and entered
into as of the 1st day of May, 2003 by and among
Vitalstate Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Xxxxxx, (the "Corporation")
and
Xxxxx Xxxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX
00000
(the "Executive")
WHEREAS the Corporation is engaged in the business of the creation,
production, sale and marketing of nutraceuticals (hereinafter the "Business");
WHEREAS the Corporation wishes to employ the Executive as its chief
operating officer and president of a corporate subsidiary named Vitalstate US,
Inc. (the "Subsidiary"), and the Executive agrees to be so employed, in
accordance with terms, covenants and conditions hereinafter set forth;
NOW, THEREFORE, FOR THE REASONS SET FORTH ABOVE, AND IN CONSIDERATION OF
THE MUTUAL PREMISES AND AGREEMENTS HEREINAFTER SET FORTH, THE PARTIES HERETO
ACKNOWLEDGE AND AGREE AS FOLLOWS:
1. NATURE AND TERM OF SERVICES
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1.1 The Corporation hereby employs, engages and hires the Executive as chief
operating officer of Vitalstate Inc. and president of the Subsidiary, and the
Executive hereby accepts and agrees to such hiring, engagement and employment.
Hereinafter, where context requires, reference to the Corporation includes
reference to the Subsidiary.
1.2 NATURE OF SERVICES. The Executive agrees that he shall provide his services
to the Corporation on a full-time basis, the whole according to the terms and
conditions hereinafter set forth, as an Executive to the Corporation, and his
duties as such an Executive shall include, but not be limited to, those set
forth from time to time by the Corporation's board of directors. The services to
be performed by the Executive hereunder shall be principally performed from the
Corporation's Florida facility (hereinafter the "Services").
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1.3 TERM. The term of this Agreement (the "Term") shall commence May 1, 2003 and
shall continue for a 3 year term ending on April 30, 2006. The Term shall be
renewable, at the option of the Executive, for up to 2 successive 1 year
periods, by Executive's giving written notice to the Corporation of his intent
to extend the Term for an additional year, not less than sixty (60) days prior
to the end of the existing Term. The Term, including any extensions thereof, is
subject to earlier termination as provided herein.
2. COMPENSATION
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2.1 SALARY. In consideration for the Services to be rendered pursuant to this
Agreement, and in further consideration for the confidentiality, non-competition
and non-solicitation covenants described in Article 3 hereof, the Corporation
shall pay the Executive an initial base annual salary of USD$200,000 per annum
(hereinafter the "Salary") subject to the normal deductions at source, payable
in semi-weekly installments. During the Term, the annual base Salary shall be
reviewed periodically by the Corporation for possible increase.
2.2 BONUSES. Executive will be eligible to receive an annual bonus payable in
cash an amount representing five percent (5%) of the net profits of the
Corporation and options of Vitalstate Inc. at the Executive 1 level.
2.3 SIGNING BONUS. In connection with this Agreement, the Corporation agrees to
issue 250,000 restricted shares of Vitalstate Inc. common stock (the
"Compensation Shares") to the Executive as a signing bonus, 83,334 of which will
be issuable upon the execution of this Agreement, 83,333 of which will be
issuable upon the first anniversary of this Agreement, and 83,333 of which shall
be payable upon the second anniversary of this Agreement.
2.4 OTHER BENEFITS. Executive shall also be eligible to participate in any
benefit programs of the Corporation, including but not limited to life,
disability or health insurance, pension, retirement or other benefit plans
adopted by the Corporation for the general and overall benefit of all executive
and key employees of the Corporation. In this regard, health and life insurance
policies, if any, covering all such executive officers and key employees will be
paid for at the sole expense of the Corporation. An additional life insurance
policy in the name of Xxxxx Xxxxx and in the amount of USD$1,000,000 will be
paid for by the Corporation.
2.5 EXPENSE REIMBURSEMENT. The Corporation will reimburse the Executive for all
documented and approved expenses incurred by the Executive in the performance of
his duties under this Agreement, to be paid in accordance with the Corporation's
practices in effect from time to time.
3. CONFIDENTIAL INFORMATION AND NON-COMPETITION
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3.1 DEFINITION OF CONFIDENTIAL INFORMATION. For the purposes of this Agreement,
the term "Confidential Information" shall mean, but shall not be limited to, any
technical or non-technical data, formulae, patterns, compilations, programs,
patents, trade secrets, devices, methods, techniques, drawings, designs,
processes, procedures, improvements, models, experimental work, manuals,
financial data, financial information, business forecast information, cash
requirement information, organization information, valuation information,
technical information, scientific information, research information, lists of
actual or potential customers or suppliers, of the
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Corporation and any information regarding any of the Corporation's marketing,
sales or dealer network, which is not generally known to the public through
legitimate origins. The Corporation and the Executive acknowledge and agree that
such Confidential Information is extremely valuable to the Corporation. In the
event that any part of the Confidential Information becomes generally known to
the public through legitimate origins (other than by breach of this Agreement by
the Executive), that part of the Confidential Information shall no longer be
deemed Confidential Information for the purposes of this Agreement, but the
Executive shall continue to be bound by the terms of this Agreement as to all
other Confidential Information.
3.2 NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Unless otherwise required by law
or expressly authorized in writing by the Corporation, the Executive shall not,
at any time during or after the Term, directly or indirectly, in any capacity
whatsoever, except in connection with services to be performed hereunder,
divulge, disclose or communicate to any person, moral or physical, entity, firm
or any other third party, or utilize for the Executive's personal benefit or for
the benefit of any competitor of the Corporation, any Confidential Information.
3.3 DELIVERY UPON TERMINATION. Confidential Information and all embodiments
thereof (including any information on computer disk and any reproductions) shall
remain the sole property of the Corporation, and immediately upon request to
this effect or immediately upon termination of this Agreement for any reason,
the Executive shall promptly deliver to the Corporation all correspondence,
drawings, manuals, letters, notes, notebooks, reports, programs, plans,
proposals, financial documents, or any other documents concerning the
Corporation's customers, dealer network, marketing strategies, products and/or
processes which contain Confidential Information.
3.4 COVENANT NOT TO COMPETE. During the Term (as previously defined in 1.3), and
for a period of twelve (12) months after the termination of the Agreement (as
per section 4.3), the Executive shall not, on his own behalf or on behalf of
another, either alone or in combination with others, directly or indirectly, in
any capacity whatsoever (including, without limitation, as an employee,
employer, principal, agent, joint venture, partner, shareholder or other
equityholder, independent contractor, licensor, licensee, franchisor,
franchisee, distributor, consultant, supplier or trustee):
(i) engage anywhere in Canada and the United States of America
(hereinafter the "Territory") in any aspect of the Business for
purposes which are competitive with the Business as conducted by the
Corporation;
(ii) have any ownership or equity interest in any business, firm,
corporation, joint venture, partnership or other entity engaged in any
aspect of the Business in the Territory (other than 5% or less of a
publicly traded company); or
(iii) consult with or assist any person, moral or physical (other than the
Corporation) who or which is engaged in any aspect of the Business in
the Territory for purposes which are competitive with the Business as
conducted by the Corporation.
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3.5 COVENANT OF NON-SOLICITATION. During the Term (as previously defined in
1.3), and for a period of twelve (12) months after the termination of the
Agreement (as per section 4.3), the Executive shall not, on his own behalf or on
behalf of another, either alone or in combination with others, directly or
indirectly, in any capacity whatsoever (including, without limitation, as an
employee, employer, principal, agent, joint venturer, partner, shareholder, or
other equityholder, independent contractor, licensor, licensee, franchisor,
franchisee, distributor, consultant, supplier or trustee):
(i) solicit or assist any third party to solicit any employees of the
Corporation to become an officer, director, employee or agent of the
Corporation or such third party, or otherwise entice away from the
employment of the Corporation any employee of the Corporation; or
(ii) (a) canvass or solicit (or procure or assist the canvassing or the
soliciting of) any customer of the Corporation for purposes which
are competitive with the Business as conducted by the
Corporation; or
(b) accept (or procure or assist the acceptance of) any business from
any customer of the Corporation for purposes which are
competitive with the Business as conducted by the Corporation.
3.6 ASSIGNMENT OF CONSULTATION INVENTIONS. The Executive shall disclose and
assign to the Corporation any and all materials of a proprietary nature,
including, but not limited to, material subject to protection as Confidential
Information, trade secrets or as patentable or copyrightable ideas, which the
Executive may conceive, invent, create or discover, either solely or jointly
with another or others, during the Term, in connection with the rendering of
Services hereunder and which relates to or is capable of use in connection with
the business of the Corporation or any services or products offered, performed,
produced, used, sold or being developed by the Corporation at the time said
material is developed as it pertains to Vitalstate.
3.7 ADDITIONAL DOCUMENTATION. The Executive will, upon request of the
Corporation, either during or at any time after the termination of this
Agreement, execute and deliver all papers, including applications for patents or
copyrights, and do such other acts (solely at the Corporation `s expense) as may
be necessary to obtain and to maintain proprietary rights in the Confidential
Information specified in Section 3.6 above and the materials specified in
Section 3.6 above, in any and all countries and to vest title thereto in the
Corporation.
3.8 OTHER REMEDIES. In the event that the Executive breaches any of the terms
contained in this Section 3, the Executive stipulates that said breach will
result in immediate and irreparable harm to the business and goodwill of the
Corporation and that damages, if any, and remedies at law for such breach would
be inadequate. In addition to any and all such remedies available to the
Corporation, the Corporation shall therefore be entitled to apply for and
receive from any court of competent jurisdiction an injunction to restrain any
violation of this Agreement and for such further relief as the court may deem
just and proper.
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3.9 CONTINUING OBLIGATIONS. The obligations, duties and liabilities of the
Executive pursuant to Section 3 of this Agreement are continuing, absolute and
unconditional and shall remain in full force and effect as provided therein
despite any termination of this Agreement for any reason whatsoever, including,
but not limited to, the expiration of the Term.
4. TERMINATION
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4.1 TERMINATION FOR CAUSE; DEATH OR DISABILITY OF EXECUTIVE. In the event of a
material breach by the Executive under this Agreement, or upon his death or
permanent disability such that the Executive cannot perform the Services
hereunder, this Agreement may be terminated by the Corporation without notice or
penalty. Notwithstanding the foregoing, any Salary earned by the Executive prior
to such termination, death or disability shall remain payable by the Corporation
to the Executive or his estate. For purposes of this Agreement, permanent
disability means the Executive has been unable, for three consecutive months, to
perform the Executive's duties under this Agreement, as a result of physical or
mental illness or injury. Further, in the event this Agreement is terminated by
the Corporation for cause or is voluntarily terminated by the Executive pursuant
to Section 4.2 below, at any time during the initial three (3) year Term of this
Agreement, Executive shall have to return or forego a proportionate amount of
the 250,000 shares signing bonus provided for in Section 2.3 hereof. By way of
example, if Executive voluntarily terminates this Agreement after two (2) years,
he would have to return or forego 83,333 shares.
4.2 TERMINATION BY EXECUTIVE. This Agreement may be terminated at any time by
Executive upon three (3) months prior written notice to Corporation.
4.3 TERMINATION BY CORPORATION WITHOUT CAUSE OR RESIGNATION WITH GOOD REASON.
Employee will be deemed to have "good reason" to resign in the event: (A) A
reduction in employee's responsibilities or duties. (B) A material breech by the
Corporation of its obligations, under Section 2 of this agreement occurs (C)
Change in control as defined in Section 4.4 of this agreement. In the event this
Executive's employment is voluntarily terminated by the Corporation without
cause, for any reason whatsoever or by the Executive's resignation with good
reason during the Term, the Corporation shall (i) continue to pay Executive an
amount equivalent to his base salary, payable bi-monthly for the duration of the
Term. In the event that termination without cause occurs in the final twelve
months of the Term, payments shall continue until the end of the Term, plus an
additional twelve months (ii) Corporation will continue to pay commissions /
bonuses as defined in Section 2.2 of this agreement (iii) Corporation will
continue to provide executive with benefits as defined in Section 2.3 of the
agreement with all shares of Vitalstate Inc. stock being 100% vested at the
termination date.
4.4 TERMINATION FOLLOWING A CHANGE IN CONTROL. In the event this Agreement is
terminated by the Corporation pursuant to a change in control of Vitalstate
Inc., the Corporation shall (i) continue to pay Executive an amount equivalent
to 2 years of his base salary, payable bi-monthly for the duration of the Term.
In the event that termination without cause occurs in the final twelve months of
the Term, payments shall continue until the end of the Term, plus an additional
twelve months (ii) Corporation will continue to pay commissions / bonuses as
defined in Section 2.2 of this agreement (iii) Corporation will continue to
provide executive with benefits as defined in Section 2.3 of the agreement with
all shares of Vitalstate Inc. stock being 100% vested at the termination date.
For purposes of this Agreement, a change in control shall be deemed to have
occurred when
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any person and all other persons who constitute a group (within the meaning of
Section 13(d)(3) of the Securities Exchange Act or 1934) have acquired direct or
indirect beneficial ownership of 50% or more of Vitalstate Inc.'s outstanding
voting securities. If any circumstance where Sections 4.3 and 4.4 of this
Agreement can both be deemed to be applicable, only this Section 4.4 shall
apply.
5. MISCELLANEOUS
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5.1 ASSIGNMENT. Except as provided in this Section 5.1, the Executive and the
Corporation acknowledge and agree that the covenants, terms and provisions
contained in this Agreement and the rights of the parties hereunder cannot be
transferred, sold, assigned, pledged, or hypothecated; provided, however that
this Agreement shall be binding upon and shall enure to the benefit of the
Corporation and any successor to or assignee of all or substantially all of the
business and property of the Corporation. In addition, the Corporation may
assign its rights hereunder to a direct or indirect subsidiary, affiliated
company, or division of the Corporation without the consent of the Executive.
5.2 CAPACITY. The Executive hereby represents and warrants that, in entering
into this Agreement, he is not in violation of any contract or agreement,
whether written or oral, with any other person, moral or physical, firm,
partnership, corporation or any other entity to which he is a party or by which
he is bound and will not violate or interfere with the rights of any other
person, firm, partnership, corporation or other entity.
5.3 ENTIRE AGREEMENT. This Agreement contains the entire agreement between the
parties and shall not be modified except in writing by the parties hereto.
Furthermore, the parties hereto specifically agree that all prior agreements,
whether written or oral, relating to the Services to the Corporation shall be of
no further force or effect from and after the date hereof.
5.4 SEVERABILITY. If any phrase, clause or provision of this Agreement is
declared invalid or unenforceable by a court of competent jurisdiction, such
phrase, clause or provision shall be deemed severable from this Agreement, but
will not effect any other provisions of this Agreement, which otherwise shall
remain in full force and effect. If any restriction or limitation in this
Agreement is deemed to be unreasonable, onerous and unduly restrictive by a
court of competent jurisdiction, it shall not be stricken in its entirety and
held totally void and unenforceable, but shall remain effective to the maximum
extent permissible within reasonable bounds.
5.5 WAIVER. The waiver by the Corporation or the Executive of any breach of any
term or condition of this Agreement shall not be deemed to constitute the waiver
of any other breach of the same or any other term or condition hereof.
5.6 GOVERNING LAW. The parties hereto agree that this Agreement shall be
construed as to both validity and performance and shall be enforced in
accordance with and governed by the laws of New York applicable therein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
VITALSTATE INC.
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: President and Chief Executive Officer
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
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