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EXECUTIVE EMPLOYMENT AGREEMENT
This
EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is
made and entered into as of this 29th day of
October
2007, by and between Skins Inc., a Nevada corporation (the
“Company”), and DEBORAH A. GARGIULO, 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 Financial Officer and to have the benefits of her
expertise and knowledge;
WHEREAS,
the Executive desires to be employed by the Company as its
Chief Financial Officer; and
WHEREAS,
the parties desire to enter into this Agreement to establish
the terms and conditions of the Executive’s employment
as Chief Financial Officer 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 per the terms of this
agreement as the Chief Financial Officer of the Company and
Executive hereby accepts such terms of employment as of the date
hereof pursuant to the terms, covenants and conditions set forth
herein. Executive shall report to the Chief Executive Officer of
the Company and shall report directly to 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 Financial Officer, and, in such capacity,
shall perform the duties and functions and
have the authority that
is commensurate with such position and such other duties,
functions
,
and authority consistent
with her
status
as Chief
Financial 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 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 her best efforts, energies, skills and
attention to the business and affairs of the Company. Executive
shall also devote substantially all of her business time to her
duties hereunder and shall, to the best of her 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 her services
hereunder.
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 and 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
Thousand Dollars ($200,000) 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 of
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
performance bonus review for Executive shall occur at such times
consistent with the Company’s compensation policy and
procedures for executive officers. The annual performance bonus
shall be up to forty percent (40%) 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 forty 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. In
addition, Executive shall receive $500 per month for purposes of an
automobile allowance to be paid in accordance with the customary
payroll practices of the Company. The
Company shall pay reasonable legal fees actually incurred by
Executive in connection with the negotiation of this Agreement up
to One Thousand Dollars ($1,000) upon presentation of an invoice
for legal services.
3.4
Vacation .
Executive shall be entitled to receive four (4) weeks of paid
vacation each calendar year. Any unused vacation days shall be
carried over to the next calendar year, provided Executive shall be
entitled to no more than six (6) weeks of paid vacation in any
calendar year. 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 all 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 without limitation, medical, dental,
vision, life and disability insurance plans and coverage, and any
applicable 401k or other pension plans, to the extent they are
provided.
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.
Equity Compensation
.
4.1
Participation in Stock Option Plan .
Executive
has been granted a total of Two Hundred Thousand (200,000)
options exercisable at fair market value on the date of grant
(the “Options”) under the Company’s 2005
Incentive Plan (the “Plan”) subject to the terms
and conditions of the Plan and the Company’s standard
Stock Option Agreement.
4.2
Vesting Schedule .
All
Options outstanding on the date of a Change of Control, as
defined in the Plan, that have not previously vested or
terminated under the terms of the option agreement shall be
immediately and fully vested and exercisable upon the date of
a Change of Control.
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;
(ii)
Executive’s
conviction of, or plea of nolo contendere to, a felony or a
crime involving moral turpitude which, directly or indirectly,
has a material adverse effect on the Company;
(iii)
Executive’s
willful or gross misconduct in connection with her employment
duties which, directly or indirectly, has a material adverse
effect on the Company; or
(iv)
Executive’s
habitual failure or refusal to perform her 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 her 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 held, 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 her 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 her 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
extent of the Executive's rights under such plans, accrued vacation
pay and any appropriate business expenses incurred by
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