**Exhibit 10.10**

 

**EMPLOYMENT AGREEMENT**

 

This Agreementis made this 2nd day of March, 2005 (the “Effective Date”), by and between**VITACUBE SYSTEMS HOLDINGS, INC.**, a Nevadacorporation (“Employer” or the “Company”), and**EARNEST MATHIS, JR.**(“Employee”). This Agreement supersedes and replaces all prior employment agreementsbetween the parties whether written or oral.

 

***BACKGROUND***

 

A.                                   TheCompany desires to employ Employee as the Chief Executive Officer andPresident.

 

B.                                     Employeedesires employment with the Company as the Chief Executive Officer andPresident.

 

THEREFORE, inconsideration of the Background, the mutual promises contained herein, andother good and valuable consideration, the parties agree as follows:

 

1.                                       **Employment Duties.**

 

1.1.                              Employment.  Company agrees to employ Employee as ChiefExecutive Officer and President until terminated as herein provided.  The Company’s board of directors may amendEmployee’s job title and description from time to time.  Employee hereby accepts employment by theCompany and agrees diligently and faithfully to perform his duties pursuant tothis Agreement. EMPLOYEE ACKNOWLEDGES AND THE PARTIES AGREE THAT EMPLOYEE ISONE OF THE COMPANY’S EXECUTIVE AND MANAGEMENT PERSONNEL AND THAT ALLCONFIDENTIALITY, NON-COMPETE AND NON-SOLICITATION COVENANTS AND PROVISIONSCONTAINED IN THIS AGREEMENT ARE FULLY ENFORCEABLE AGAINST EMPLOYEE.

 

1.2.                              TimeDevoted. Employee will devote approximately 80% of his time and energies tothe business of the Company to accomplish all duties reasonably assigned, andwill devote his best efforts to advance the interests of the Company.  During the term of this Agreement, Employeemay be engaged in other business activity provided that, without the priorapproval of the Company’s board of directors, Employee shall not be engaged inany Competitive Business (as defined in Section 8.6).

 

1.3.                              Duties.  Employee’s duties shall include: managementof the day-to-day operations of the Company, general administration of theCompany’s business including

 

 

1

----

 

sales,marketing, and strategic planning for the Company, supervision and direction ofemployees and other corporate officers, and all other duties necessary toperform the foregoing responsibilities or assigned to Employee by the board ofdirectors.  Employee will have theauthority to perform and execute the necessary actions to implement theoperational initiatives set by the Company acting through its board ofdirectors.

 

2.                                       **Term.** The term of Employee’s employment hereunder shall commence on theEffective Date and shall continue for a period of two years (the “Initial Term”).  Employee’s employment shall terminate at theend of the Initial Term unless extended by mutual agreement of the partiesunless earlier terminated as provided below.

 

3.                                       **Compensation.**

 

3.1.                              Salary.  Employee will receive as compensation for allresponsibilities a base salary (“Base Salary”) of $150,000 per year, payableaccording to the salary schedule of Employer. In addition to the Base Salary and the Plan Bonus described below,Employee may receive a bonus in such amount as the board of directors in itssole discretion shall determine.

 

3.2.                              StockOptions. Employee also shall receive nonqualified stock options (the “Options”)to purchase, at a price of $3.00 per share, an aggregate of 275,000 shares ofEmployer’s common stock.  The Optionswill be in the form of Option Agreement attached to this Agreement as Annex 2.

 

3.3.                              Bonuses**. **Employer intends to initiate anincentive executive bonus plan (the “Plan Bonus”) for all executives of theCompany.  Employee will be eligible forinclusion for the Plan Bonus if and when it is instituted by the Company, butonly on the same basis as other executives may participate and as approved bythe compensation committee of the Board of Directors, or such equivalent Boardbody.

 

3.4.                              Withholding/Deductions.  Allcompensation the Company pays Employee, including commissions, is subject toall federal, state, and municipal withholding requirements, any applicableoccupational privilege tax and any court ordered deductions such asgarnishments.  Compensation may also bereduced by deductions Employee authorizes for insurance, 401(k) contributions,and other similar purposes.

 

3.5.                              Final Salary. Employee’s final paycheck will be reduced by the amount of any lawfulcharge or indebtedness Employee owes the Company.

 

4.                                       **Benefits.**

 

4.1.                              Voluntary Benefits. Employee shall receive all benefits generally available to seniorexecutive employees of the Company from time to time.  The Company does not promise to provide anyfringe benefits but agrees that, if provided, Employee shall have the

 

2

----

 

right to participate.  Suchparticipation shall be subject to all qualification, vesting and otherrequirements of the plans.

 

4.2.                              Additional Benefits.  Inaddition to the benefits set forth in Section 4.1,

 

4.2.1.                     Employershall provide Employee with an auto allowance of $1,000 per month.

 

4.2.2.                     Employeeshall be entitled to four weeks of paid vacation each year, with such vacationto be scheduled and taken in accordance with the Company’s standard vacationpolicies applicable to such personnel. In addition, Employee shall be entitled to such sick leave and holidaysat full pay in accordance with the Company’s policies established and in effectfrom time to time.

 

4.2.3.                     TheCompany shall pay the expenses reasonably incurred by Employee in connectionwith a cellular telephone and a home high-speed digital telephone/internet connection.

 

4.2.4.                     TheCompany shall maintain director and officer liability insurance at all timesduring the term of Employee’s employment and for a period of three years afterEmployee’s termination of employment.

 

4.2.5.                     TheCompany shall reimburse the Employee for the cost of health insurance for theEmployee and his family.

 

4.3.                              Expense Reimbursement. Employee shall be entitled to reimbursement from the Company of allexpenses incurred in performing duties hereunder, including without limitation,meals, lodging, travel, and business entertainment, subject to the rules andregulations adopted by the Company for handling of such business expenses.

 

5.                                       **Best Efforts of Employee.** Employee shall at all times faithfully, with diligence and to the bestof Employee’s ability, experience and talents, perform all duties required ofand from Employee pursuant to the express and implicit terms hereof to thereasonable satisfaction of the Company.

 

6.                                       **Termination.**  Employee’s employment hereunder may beterminated under the circumstances set forth below.

 

6.1.                              Death.  Employee’s employment hereunder shallterminate immediately upon his death.

 

6.2.                              Disability.** **Employee’semployment hereunder shall terminate if Employee becomes physically or mentallydisabled so as to become unable, for a period of more than 90 consecutiveworking days, or for more than 90 working days in the aggregate during any

 

3

----

 

12-monthperiod, to perform his duties hereunder, to the same extent he performed themprior to the onset of such disability.

 

6.3.                              Cause.  The Company may terminate Employee’semployment immediately for “just cause.” “Just cause” shall mean the occurrence of any of the following:

 

6.3.1.                     Employeematerially breaches or fails to perform his obligations in accordance with theterms and conditions of this Agreement, provided that the Company shall havedelivered to Employee written notice setting forth Employee’s deficiencies andEmployee shall have not taken reasonable steps to cure such deficiency withinfive business days of such notice.

 

6.3.2.                     Employeecommits a felony or any other act abhorrent to the community which a reasonableperson would consider materially damaging to the reputation of the Company orits successors or assigns.

 

6.3.3.                     Employeecommits an act of fraud, misappropriation, or personal dishonesty in connectionwith his employment hereunder.

 

6.3.4.                     Employeecommits a material and willful violation of a federal or state law orregulation applicable to the business of the Company or its status as a publiccompany.

 

6.4.                              GoodReason.  Employee may terminate hisemployment for “good reason” after giving the Company detailed written noticethereof, if the Company shall have failed to cure the event or circumstancesconstituting “good reason” within five business days after receiving suchnotice.  Good reason shall mean theoccurrence of any of the following without the written consent of Employee:

 

6.4.1.                     Anymaterial breach by the Company of this Agreement.

 

6.4.2.                     Anymaterial reduction in Employee’s duties or responsibilities.

 

6.4.3.                     TheCompany relocates its offices outside the Denver metropolitan area.

 

6.4.4.                     TheCompany is the subject of a regulatory action brought by the Securities andExchange Commission or a state securities administrator that results in afinding that the Company committed a material violation of a securities lawarising out of actions by the Company prior to the date of this Agreement.

 

6.4.5.                     Achange in control.  A “change in control”means (a) the acquisition, directly or indirectly by any person or group(within the meaning of Sections 13(d) and 14(d)(2) of the Securities ExchangeAct of 1934, as amended) other than a trustee or other fiduciary holdingsecurities under an employee benefit plan of the

 

4

----

 

Company, ofbeneficial ownership (within the meaning of Rule 13d-3 of the SecuritiesExchange Act of 1934, as amended) of securities possessing more than 30% of thetotal combined voting power in the election of directors of the Company’sthen-outstanding securities or (b) a change in a majority of the board ofdirectors in a period of less than one year.

 

6.5.                              WithoutCause.  The Company shall have theright to terminate Employee’s employment hereunder without cause by providingEmployee with at least 30 days prior written notice of such termination.

 

6.6.                              WithoutGood Reason.  Employee shall have theright to terminate his employment without good reason by providing the Companywith at least 30 days advance written notice of such termination.

 

7.                                       **Compensation Upon Termination.**

 

7.1.                              IfEmployee’s employment is terminated because of disability, for cause by theCompany, or without good reason by Employee, the Company shall only be obligatedto pay Employee the salary and bonuses earned as of the date of termination,and reimbursement of all outstanding business expenses for which reimbursementis due.

 

7.2.                              Ifthe Company terminates this Agreement without cause, or if Employee resigns forgood reason*,* Employee shallreceive from the Company, as long as Employee does not violate the provisionsof Section 8 hereof, severance pay equal to one year’s Base Salary, payable inequal monthly installments, for a period of 12 months from the date of terminationof employment, and all of Employee’s unvested options will vest and will beexercisable as provided in the Option Agreement.  Employee is also entitled to all salary andbonuses earned as of the date of termination and reimbursement of all outstandingbusiness expenses for which reimbursement is due.  At the option of the Company, the paymentsdue hereunder may be paid in a lump sum rather than in installments.

 

7.3.                              IfEmployee’s employment is terminated as a result of his death, the Company shallpay Employee’s spouse or estate, all salary and bonuses earned as of the dateof termination and reimbursement of all outstanding business expenses for whichreimbursement is due.

 

8.                                       **Covenants and Conditions.**

 

8.1.                              Confidentiality.  Employeeacknowledges that during the course of Employee’s employment with the Company,Employee will be exposed to and have access to confidential and proprietaryinformation including trade secrets concerning the business and affairs of theCompany.  Employee acknowledges that suchconfidential and proprietary information has been and will continue to be ofcentral importance to the Company and that disclosure of it to or its use byothers could cause substantial loss to the Company.  Employee acknowledges that the Company developedsuch confidential and proprietary information for

 

5

----

 

its exclusiveuse and benefit and it is an exclusive, confidential, and proprietary asset ofthe Company.  Accordingly, Employeeagrees as follows:

 

Employee,except with the prior written consent of the Company or as may be required bylaw or any legal process, will not, at any time during or after employment, use(except in connection with employment by the Company) or disclose to any personor entity any confidential or proprietary information of the Company which wasobtained by Employee as a result of Employee’s employment with the Company, andshall hold all of the same confidential. For purposes of this Agreement, “confidential or proprietary information”means information, whether written or otherwise, which has a business purposeand is not known or generally available from sources outside the Company,concerning, among other things, (a) the Company’s business operations, internalstructure, and financial affairs, including, but not limited to, itsdistributors, products, services, employees, forecasts, sales and marketingmethods, costs, inventories, and sources of supply; (b) the current,prospective, or past distributors or customers of the Company, their buyinghabits, and the prices at which products are offered or sold to them; (c) past, present, or future contracts heldby the Company respecting the business or operations of the Company or distributorsor customers, or suppliers of the Company; (d) the work performed by Employeefor the Company; and (e) all other compilations of information which relate tothe business of the Company.

 

Therestrictions and obligations in this Section 8.1 shall survive in perpetuitythe termination of this Agreement and the termination of Employee’s employmentby the Company.

 

8.2.                              Company Property.  Allcontracts, agreements, financial books, records, instruments and documents;distributor lists, customer lists, memoranda, data, reports, programs, software,tapes; rolodexes; telephone and address books; research; bids; proposals;drawings; print-outs; graphs; listings; programming; and any other instruments,records, or documents relating or pertaining to (a) distributors or customersof the Company; (b) any employee or independent contractor of the Company; (c)suppliers of the Company; or (d) the services rendered by Employee to theCompany, or in connection with the Company business (collectively the “Records”),shall at all times be and remain the property of the Company.  Except as authorized by the Company, Employeeagrees not to retain or carry away from the premises of the Company anyRecords, copies of Records, equipment, or any other materials or matter of anykind which are the property of the Company. Upon the termination for any reason of employment with the Company,Employee shall immediately turnover to the Company all Records, copies of anyRecords, equipment, and other materials or matter which are in Employee’spossession or control and which are the property of the Company.

 

8.3.                              Developments.  Employee acknowledges that all designs,drawings, graphs, sketches, print-outs, formulas, software, inventions,discoveries, innovations, new technology, or other developments (collectivelycalled “Developments”) conceived or developed by Employee during the term ofemployment, which Developments are related in

 

6

----

 

any way to the business of the Company then being conducted or proposedto be conducted by the Company or to the business of any distributor orcustomer or prospective distributor or customer of the Company, are and will bethe exclusive property of the Company, and shall be subject to the provisionsof Section 8.1 of this Agreement.  Employeewill promptly notify the Company of any such Developments.  Employee shall, when appropriate and uponrequest of the Company, actively assist the Company in executing all papers andperforming all other lawful acts which the Company deems necessary or advisablefor the securing of legal protection for any such Developments, whether throughpatent, copyright, or any other means. Employee further agrees that, upon request of the Company, and at nocharge, Employee will assign any rights arising out of such Developments to theCompany.

 

8.4.                              Papers, Drawings, andOther Documents.  Employee agrees not to make or permit to bemade, except in the pursuance of employment duties under the terms of thisAgreement and for the sole use and account of the Company, any copies,abstracts, or summaries of any designs, papers, drawings, or any otherdocuments of any kind which may come into Employee’s possession and whichrelate or refer to the Company or its business. Employee grants to the Company all rights to possession and all title inand to any such designs, papers, drawings, or other documents, or copies,abstracts, or summaries thereof, which come into the possession of Employeewithin the period of employment by the Company and which relate or refer to theCompany’s business.  Notwithstandinganything herein to the contrary, Employee may retain any course materialsEmployee obtains from attending private or college courses or seminars.  If the Company desires a copy of suchmaterials, Employee shall provide it to the Company for copying, at the Company’sexpense, upon reasonable notice to Employee.

 

8.5.                              Security Regulations.  Employeeagrees to abide by the Company’s personnel policies and all securityregulations and rules of employment adopted by the Company from time to time.

 

8.6.                              Covenant Not toCompete.  Employee agrees that duringthe term of this Agreement and for a period of 12 months following terminationof this Agreement, he will not (except through the ownership of not more than5% of the securities of an entity listed on the NASDAQ Stock Market or anational securities exchange), directly or indirectly, as a proprietor,director, officer, employee, partner, stockholder, consultant, owner orotherwise, render services to or participate in the affairs of any CompetitiveBusiness.  A “Competitive Business” shallmean any business that engages in the manufacturing, selling, marketing,developing, packaging, or distributing of vitamins, nutritional supplements orany other product being manufactured, sold, developed, marketed or distributedby the Company, in any geographic area in which the Company has business ordistributor operations at the time of Employee’s termination of employment.

 

8.7.                              Nonsolicitation ofEmployees.  Employee agrees thatduring the term of this Employment and for a period of 12 months followingtermination of this Agreement, Employee will not (except on behalf of theownership of not more than 5% of the securities

 

7

----

 

of any entity listed on the NASDAQ Stock Market or a nationalsecurities exchange), directly or indirectly, as proprietor, director, officer,employee, partner, stockholder, consultant, owner or otherwise, solicit orattempt to solicit the employment of, hire, or assist or participate in anymanner in the hiring or recruitment of any employee or independent contractoremployed or retained by the Company, or any former employee or independentcontractor whose employment or retention by the Company has ceased within sixmonths prior to the date of such solicitation, hire or other involvement in thehiring or recruitment or such persons.

 

8.8.                              Scope andReasonableness.  The parties to this Agreement expressly agreeand contract that it is not their intention to violate any policy, statute orcommon law.   The parties to thisAgreement agree that the limitations contained in Section 8 with respect totime, geographical area, and scope of activity are reasonable.  However, if any court shall determine thatthe time, geographical area, or scope of activity of any restriction containedin Section 8 is unenforceable, it is the intention of the parties that suchrestrictive covenant set forth herein shall not thereby be terminated but shallbe deemed amended to the extent required to render it valid and enforceable.

 

8.9.                              Remedies for Breach.  Theparties acknowledge that breach of Section 8 of this Agreement by Employee willresult in immediate, substantial, and irreparable harm to the Company.  The parties therefore agree that the Companyshall have, in addition to any remedy available to it at law or in equity, theright to enforce the terms of Section 8 of this Agreement by the remedy ofspecific performance or injunction upon proper application to a court ofcompetent jurisdiction.  Employee agreesthat the Company does not need to post a bond to obtain an injunction andwaives Employee’s rights to require such a bond.

 

9.                                       **Representations of Employee.**  Employeehereby represents and warrants that as of the date hereof, Employee is not aparty to any agreement, contract, or understanding, and that no facts orcircumstances exist that would in any way restrict or prohibit Employee fromundertaking or performing any of Employee’s obligations under thisAgreement.  Furthermore, Employee understandsand acknowledges that Employee may have confidentiality obligations to prioremployers under common law, statute, or contract.  Employee represents and warrants that in thecourse of rendering services to the Company, Employee will not use or otherwisedisclose any confidential or proprietary information obtained by Employee inconnection with any prior employment. Employee shall indemnify and hold the Company harmless from any claims,demands, costs, or liabilities (including attorneys’ fees and disbursements)incurred by the Company in connection with or resulting from Employee’s breachof the representations set forth in this Section 9.

 

10.                                 **Assignment.**  Employee’sobligations and duties under this Agreement are personal in nature.  Employee shall not, without the consent ofthe Company, assign or transfer this Agreement or any rights or obligationshereunder.  The Company may assign thisAgreement, or any benefit, duty, or obligation under this Agreement.

 

8

----

 

11.                                 **Construction.**  The titlesappearing herein are used for purposes of convenience only and shall in no waychange the meaning of this Agreement.

 

12.                                 **Notices.**   All notices,requests, demands, consents, and other communications which are required or maybe given under this Agreement (collectively, the “Notices”) shall be in writingand shall be deemed received (a) if given by facsimile, when transmitted, andconfirmation received, if transmitted on a business day before 5:00 p.m. localtime and, otherwise, on the next business day following transmission; (b) ifgiven by email, when transmitted, if transmitted on a business day before 5:00p.m. local time and, otherwise, on the next business day followingtransmission; (c) if given by certified mail, return receipt requested, postagepre-paid, three business days after being deposited in the United States mail;(d) if given by a nationally recognized overnight courier service, one businessday after being so deposited; and (e) if personally delivered, when received orpersonally delivered.  The mailingaddress, facsimile number, and email address of the parties are as follows:

 

If toEmployee, address to:

 

EarnestMathis, Jr.

At his homeaddress, email address or fax number

most recentlyon file with the Company

 

If to Company,address to:

 

VitacubeSystems Holdings, Inc.

408 S. HollyStreet

Denver,CO  80246

Facsimile:  303-316-4116

Email:  marypat@v3s.com

 

Any party may, from time to time, specify a differentaddress or facsimile number by giving Notice in accordance with this section.

 

13.                                 **Entire Agreement.**  ThisAgreement constitutes the full and complete understanding and agreement of theparties, supersedes all prior understandings and agreements as to theemployment of Employee, and cannot be amended, changed, modified, or terminatedwithout the consent, in writing, of the parties hereto.

 

14.                                 **Non-Waiver.**  The waiver byeither party of a breach of any term of this Agreement shall not operate or beconstrued as a waiver of any subsequent breach thereof.

 

15.                                 **Severability.**  If any of theprovisions of this Agreement shall be or become invalid or illegal under anyprovision of applicable law or for any other reason, the remainder of theAgreement shall not be affected and shall remain in full force and effect.

 

9

----

 

16.                                 **Governing Law - Venue.**   THISAGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OFTHE STATE OF COLORADO (WITHOUT REGARD TO ITS RULES OF CONFLICTS OF LAWS).

 

17.                                 **Arbitration. **Any dispute relating to this Agreement,or to the breach of this Agreement, except such as may concern Section 8,arising between Employer and Employee, shall be settled by arbitration inaccordance with the commercial arbitration rules of the American ArbitrationAssociation (“AAA”), which arbitration may be initiated by any party hereto bywritten notice to the other of such party’s desire to arbitrate thedispute.  The arbitration proceedingsshall take place in Denver, Colorado, and shall be administered by AAA.Colorado’s Uniform Arbitration Act of 1975, C.R.S. §13-22-201 et seq. asamended, shall govern any arbitration under this Agreement.  Employer’s right to equitable relief setforth in Section 8 may be brought and enforced in any court of competentjurisdiction.  Employee agrees andconsents to the District Court of the City and County of Denver, State ofColorado, having jurisdiction over any such dispute.

 

18.                                 **Counterparts; Facsimiles.**   This Agreement may be executed in counterparts,each of which shall be deemed an original and which together shall constitute asingle instrument.  This Agreement may beexecuted and delivered by facsimile transmission, all with the same force andeffect as if the same was a fully executed and delivered original manualcounterpart

 

**[signatures appear on following page ]**

 

10

----

 

IN WITNESS WHEREOF, the parties have executedthis Agreement effective as of the day and year written above.

 
|   | **EMPLOYER:**                       |
|--------|-------------------------------------|
|   | ** **                          |
|   | **VITACUBE SYSTEMS HOLDINGS, INC.** |
|   | ** **                          |
|   |                                |
|   | By:                                 |   /s/  Mary Pat O’Halloran |
|   |                                | Mary Pat O’Halloran, Chief Financial  Officer |
|   |                                |
|   | Date:                               |  March 2, 2005 |
|   |                                |
|   |                                |
|   | **EMPLOYEE:**                       |
|   |                                |
|   |                                |
|   | /s/ Sanford D. Greenberg            |
|   | Sanford D. Greenberg                |
|   |                                |
|   | Date:                               |  March 2, 2005 |
|        |                                     |  |  |

 

11

----