EXECUTIVE EMPLOYMENT
AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT
(“Agreement”) is made and entered into as of this 13th
day of April 2007, by and between Skins Inc., a Nevada corporation
(the “Company”), and Antonio Pavan, 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 Operating Officer and Executive
Vice President and to have the benefits of his expertise and
knowledge;
WHEREAS, the Executive desires to be employed by
the Company as its Chief Operating Officer and Executive Vice
President; and
WHEREAS, the parties desire to enter into this
Agreement to establish the terms and conditions of the
Executive’s employment as Chief Operating Officer and
Executive Vice President 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 as the Chief Operating Officer and Executive Vice
President of the Company and Executive hereby accepts such
employment as of the date hereof pursuant to the terms, covenants
and conditions set forth herein. Executive shall report directly to
Chief Executive Officer and 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 Operating Officer and Executive Vice
President, and, in such capacities, shall perform the duties and
functions and have the authority that is commensurate with such
positions and such other duties, functions, and authority
consistent with his status as a senior executive 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 Chief Executive Officer and 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 his best efforts, energies, skills and attention to the
business and affairs of the Company. Executive shall also devote
substantially all of his business time to his duties hereunder and
shall, to the best of his 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 his services hereunder. Executive may also serve as a
non-employee member on the board of directors of other for-profit
companies if such service does not interfere with the providing of
his services hereunder as reasonably determined by the Board of
Directors of the Company.
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 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 Twenty-Five Thousand Dollars
($225,000.00) 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 or 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 first performance
bonus review for Executive shall occur approximately six (6) months
after the date of this Agreement, the second of such review shall
occur for Executive’s performance during the 2008 fiscal year
at such time consistent with the Company’s compensation
policy and procedures for executive officers, and such reviews
thereafter shall occur annually in accordance with the
Company’s compensation policy and procedures for executive
officers. The annual performance bonus shall be up to fifty percent
(50%) 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 fifty 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. As a one time benefit to
Executive, and following being provided a copy of the legal fee
invoices, the Company shall pay reasonable legal fees actually
incurred by Executive in connection with the negotiation of this
Agreement of up to Four Thousand Dollars ($4,000).
3.4 Vacation . Executive shall be
entitled to receive four (4) weeks of paid vacation each year. Any
accrued but unused vacation days may be rolled over to the next
12-month period, provided that the number of unused vacation days
for any period shall not exceed six (6) vacation weeks. 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 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
any applicable 401k or other pension plans, to the extent they are
provided. Notwithstanding the foregoing, Executive has opted not to
receive health benefits from the Company in lieu of extended
disability insurance coverage in an amount equal to the approximate
cost of the health benefits for Executive. In addition, the Company
shall furnish the Executive, without cost to him, with a
Company-owned or leased automobile of the make and model authorized
by the Company's policy.
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.
4.1 Participation in Stock Option Plan
.
Executive shall be granted a total of Five
Hundred Thousand (500,000) options exercisable at fair market value
(the “Options”) under the Company’s 2005
Incentive Plan (the “Plan”). The grant of Options to
Executive will be subject to the terms and conditions of the Plan
and the Company’s standard Stock Option Agreement, which will
be executed by Executive and is attached hereto as Exhibit A
.
Subject to the
terms and conditions of the Company’s standard Stock Option
Agreement, the shares underlying the options shall vest in six (6)
equal semi-annual installments over the course of three (3) years,
with the first installment vesting six months from the date of this
Agreement.
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 as an Executive;
(ii) Executive’s conviction of, or plea of
nolo contendere to, a felony or a crime involving moral
turpitude;
(iii) Executive’s willful or gross
misconduct in connection with his employment duties which, directly
or indirectly, has a material adverse effect on the Company;
or
(iv) Executive’s habitual failure or
refusal to perform his 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 his 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
pursuant to Section 4.2, 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 his 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 his 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
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