Exhibit 10.18
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the 16
day of September, 1999 by and between XxxxxXxxxx.xxx Inc. ("Company") and Xxxxx
Xxxxxxx.
WHEREAS, the Company desires to employ Xxxxx Xxxxxxx as the "Vice President of
Marketing" of the Company;
WHEREAS, Xxxxx Xxxxxxx has agreed to provide such services in accordance with
the terms and conditions of this Agreement;
NOW THEREFORE, in consideration of the mutual promises herein made and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Employment. Company shall employ Xxxxx Xxxxxxx as Vice President during
the term of this Agreement and Xxxxx Xxxxxxx hereby accepts such employment.
Xxxxx Xxxxxxx shall be responsible for US marketing operations on a daily basis,
and shall have such other duties regarding the Company as shall be determined
from time to time by the Board of Directors of the Company ("Board")..
Term of Employment. The term of employment of Xxxxx Xxxxxxx shall be for a
term of 2 years from the date of this Agreement ("Initial Term") and shall
automatically extend for additional terms of 2 year(s)("Renewal Term") unless
this Agreement is terminated as of the last day of the Initial Term or as of the
last day of any Renewal Term upon not less than ninety (90) days prior written
notice by either party to the other, subject to earlier termination as provided
in paragraphs 4, 5, and 6 hereof.
Compensation. Base Salary. Xxxxx Xxxxxxx shall be paid a base salary of
$48,000.00 at the annual rate of %10% in the 1st year of this Agreement;
increases for the second and third year are contingent upon review by the
compensation committee, which will be established by the Board of Directors,
commencing on the date that the Company completes full funding of the 23-27
million dollar offering of its common stock, which offering is being made
pursuant to the Company's Registration Statement on Form SB-2 to be filed under
the Securities Act of 1933, as amended, with the Securities and Exchange
Commission on or about November 1999 (the "Offering"). As deferred payment Xxxxx
Xxxxxxx shall receive 15,000 shares of common stock after the offering.
Cash Bonus. Xxxxx Xxxxxxx shall be paid a cash bonus, if any, within the
sole discretion of the Board of Directors of the Company. Such bonus shall be
paid within a reasonable period of time after the Board of Directors in its
discretion awards such cash bonus.
(c) Stock Bonus. Xxxxx Xxxxxxx shall receive a stock bonus, if any, within the
sole discretion of the Board of Directors of the Company. Such stock bonus shall
be implemented within a reasonable period of time after the Board of Directors
in its discretion awards such stock bonus.
(d) Vacation. Xxxxx Xxxxxxx shall be entitled to paid vacation and paid Federal
and state holidays in accordance with the vacation policy of the Company then in
effect, but no less than one (1) weeks of vacation the first year.
Every year thereafter the employee will receive two (2) weeks of vacation every
year up to five years.
(e) Other Benefits. Xxxxx Xxxxxxx shall be entitled to participate in all
benefit programs made generally available to other management employees of the
Company, on the same terms and conditions as they are offered to others,
including but not limited to medical, dental, and term life insurance benefits.
Xxxxx Xxxxxxx shall also be provided, at Company expense, with a vehicle for
business use, including all transportation and insurance costs associated
therewith.
(f) Severance Payment. In the event of the termination of Xxxxx Xxxxxxx
employment hereunder prior to the end of the Initial Term, or any Renewal Term,
by the Company without cause (except termination upon death or total and
permanent disability) including any deemed termination by the Company as set
forth in paragraph 4(b) hereof, the Company shall pay one lump-sum severance
benefits equal to ninety (90) days of base compensation ("Severance Payment"),
which Severance Payment shall be made to Xxxxx Xxxxxxx within fifteen (15) days
of the notice of termination of employment.
(g) Stock Option Grants/Employee Stock Ownership Plan. Xxxxx Xxxxxxx shall be
entitled to participate and receive stock option grants from the Company's
Employee Stock Option Plan ("ESOP") during his employment with the Company, at
the discretion of the Board of Directors or committee of the Board responsible
to administer the ESOP, in amounts which are proportional to and at the same
time as option grants are made to other members of the Company's senior
management and according to terms and conditions which are comparable to such
ESOP option grants received by other members of the Company's senior management.
Termination of Employment.
Termination For Cause. The Company may terminate the employment of Xxxxx Xxxxxxx
at any time for cause (as hereinafter defined) upon written notice. The term
"for cause" shall mean: the continued failure by Xxxxx Xxxxxxx to substantially
perform his primary duties as Xxxxx Xxxxxxx of the Company in a reasonable
professional manner other than due to temporary or total disability or death,
after a written demand for such substantial performance is delivered to Xxxxx
Xxxxxxx by the Board of Directors of the Company; the unauthorized dissemination
of significant trade secrets or other proprietary property of the Company; the
commission of a felony or commission of a crime involving dishonesty or moral
turpitude; the commission of any act or acts of dishonesty which acts are
intended to result or do result directly or indirectly in gain or personal
enrichment of Xxxxx Xxxxxxx or a related person or affiliated company or when
such acts are intended to cause harm or damages to the Company;
the continued use of alcohol so as to have an adverse effect on the
performance of his duties;
the misappropriation or embezzlement of Company assets;
the knowingly furnishing of material false reports or information to the
directors or officers of the Company; or the making of serious disparaging
remarks regarding the Company publicly or to suppliers and/or customers or
potential customers of the Company.
Default. Either party may terminate this Agreement upon the breach of any
material provision of this Agreement by the other party upon thirty (30) days
prior written notice; provided, however, that such termination notice shall not
be effective if the defaulting party corrects such default prior to the date of
termination. Termination by Xxxxx Xxxxxxx of his employment hereunder by reason
of the default of the Company shall be deemed for all purposes of this Agreement
a termination by the Company without cause.
Disability. The Company may terminate the employment of Xxxxx Xxxxxxx
under this Agreement by written notice upon the total and permanent disability
of Xxxxx Xxxxxxx. Total and permanent disability shall mean the inability of
Xxxxx Xxxxxxx to substantially perform the essential functions of his position,
with or without reasonable accommodations, due to sickness or other physical or
mental disability, for thirty (30) days in any thirty (30) day period or a
period of time which exceeds the time for medical leave provided by law,
whichever period is longer. The Company shall give Xxxxx Xxxxxxx written notice
of any termination hereunder.
Death. The employment of Xxxxx Xxxxxxx under this Agreement automatically
terminates upon the death of Xxxxx Xxxxxxx.
Expense Reimbursement. Xxxxx Xxxxxxx shall be reimbursed, upon a proper
accounting, for all expenses reasonably incurred in connection with this
employment hereunder, including all reasonable travel and entertainment expenses
pursuant to Company policy.
Confidential Information. During the Initial Term or any Renewal Term of
this Agreement, Xxxxx Xxxxxxx shall not use or disclose to others, without the
prior written consent of the Company, any customer lists, trade secrets, secret
know-how, or other confidential information relative to the business of the
Company obtained by Xxxxx Xxxxxxx in the course of rendering services pursuant
to this Agreement. The obligation of Xxxxx Xxxxxxx with respect to any item of
such information shall terminate if that item of information becomes disclosed
in published literature or otherwise becomes publicly available, provided that
such public disclosure did not result, directly or indirectly, from any act or
omission of Xxxxx Xxxxxxx. Upon the leaving the employ of the Company for any
reason, Xxxxx Xxxxxxx shall continue to be bound by this Paragraph 8 for a
period of one (1) years, and shall not take with him any customer lists,
confidential data, or other documents and instruments which are the property of
the Company. All such data, documents and instruments and all copies thereof
shall be surrendered by Xxxxx Xxxxxxx to the Company on or prior to the
termination of his employment.
Notices. All notices, requests, demands and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been
given when delivered by hand or upon delivery to the address set forth below, if
delivered by any other means, addressed to the party and delivered to the
address set forth below or to such other address as such party gives written
notice in substitution therefor:
Limitations.
Non-Compete. Xxxxx Xxxxxxx agrees that during the term of his employment
with the Company hereunder and for a period of one (1) years thereafter he shall
refrain, directly and indirectly, jointly and severally, from managing,
operating, financing, participating in the ownership, management or operation of
or be employed by, consult with, advise or be otherwise engaged in any manner
with, any business engaged in the providing of services or products competitive
to those provided by the Company in any geographic area in which the Company
operates as of the date that Xxxxx Xxxxxxx leaves the Company's employment.
Ownership of less than 5% of companies whose securities are publicly traded is
not prohibited by this Agreement.
Non-solicitation of Customers. Xxxxx Xxxxxxx agrees that during the term
of his employment with the Company hereunder and for a period of one (1) years
thereafter he shall not, on his own behalf, or on behalf of another, directly or
indirectly, solicit, contact, call upon, communicate with or attempt to
communicate with any customer or prospective customer of the Company with a view
to the providing of services or products which are competitive with those that
are marketed or provided by the Company as of the date that Xxxxx Xxxxxxx leaves
the Company's employment, provided that these restrictions shall apply only to
customers or prospects of the Company which have been customers or prospects
with whom Xxxxx Xxxxxxx has had contacts on behalf of the Company.
Non-solicitation of Employees. Xxxxx Xxxxxxx agrees that during the term
of his employment hereunder and for a period of one (1) years thereafter, Xxxxx
Xxxxxxx will not directly or indirectly solicit or in any other manner encourage
employees of the Company to leave its employ for an engagement in any capacity
with any other company or entity.
Limitations. Notwithstanding the foregoing, the covenants of
XxxxxXxxxx.xxx Inc. pursuant to this paragraph 10 shall terminate upon the
termination of Xxxxx Xxxxxxx employment by the Company without cause or by
reason of the Company's breach of its obligations hereunder.
Dispute Resolution. Any dispute regarding the interpretation, breach,
damages or otherwise related to the interpretation or construction of this
Agreement shall be resolved by binding arbitration before one or more
arbitrators appointed by the American Arbitration Association ("AAA") in the
city of Nashville, Tennessee, pursuant to the AAA's Commercial Arbitration
Rules. Either party may institute the action by notice to the AAA and to the
other party. Prior to the filing of any complaint with the AAA, the parties
shall meet and attempt to resolve the dispute. The cost of such arbitration
shall be borne equally by the parties. Any decision or award by said
arbitrator(s) shall be binding on the parties. Notwithstanding the foregoing,
any party hereto may apply to any court for a temporary or permanent injunction
or restraining order to specifically enforce any provision hereof.
Binding Effect. This Agreement shall inure to the benefit of and be
binding upon Xxxxx Xxxxxxx and his estate and personal representatives and upon
the Company and its successors and assigns. This Agreement may not be assigned,
pledged or otherwise hypothecated by Xxxxx Xxxxxxx.
Successors and Assigns. The Company shall cause any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the assets or outstanding securities of the Company, by
written agreement in form and substance reasonably satisfactory to counsel to
Xxxxx Xxxxxxx to perform the obligations of the Company pursuant to this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. In the event the
Company has a parent, the parent shall guaranty the obligations of the Company
hereunder. The rights and obligations of the Company under this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of the
Company regardless of whether such successor or assign consents in writing
thereto. The rights of Xxxxx Xxxxxxx hereunder shall inure to the benefit of and
be enforceable by Xxxxx Xxxxxxx and his estate and legal representative.
Severability. In the event of the invalidity, in whole or in part, of any
term or provision of this Agreement, the parties agree that such invalidity
shall not affect the validity of any other term or provision of this Agreement
and that such provision shall be subject to partial enforcement to the extent
permitted under applicable law.
Entire Agreement. This Agreement constitutes the entire understandings of
the parties with respect to the employment of Xxxxx Xxxxxxx by the Company and
supersedes all prior agreements and understandings, oral or written.
Amendments. This Agreement may not be amended or modified except in a
writing signed by both parties.
Waiver. The failure by a party to insist upon strict performance of any
provision hereof shall not constitute a waiver of such provision. All waivers
must be in writing to be enforceable hereunder.
Governing Law. This Agreement shall be made and in all respects shall be
interpreted, construed and governed by and in accordance with the laws of the
State of Nevada, without giving effect to the rules governing conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
COLORSMART INC.
By: /s/ Xxxxx Xxxxxxx Xx.
Chief Executive Officer ------------------
/s/ Xxxxx Xxxxxxx
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9/20/99
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