EXHIBIT 10.3
EMPLOYMENT SEPARATION AND GENERAL RELEASE AGREEMENT
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This Employment Separation and General Release Agreement (this
"SEPARATION AGREEMENT") is entered into this 8th day of August, 2008, by and
between Xxxxx Xxxxxx, an individual ("EXECUTIVE"), and Allergy Research Group,
Inc., a Florida corporation (the "COMPANY").
WHEREAS, Executive has been employed as the Vice President and
Secretary for the Company; and
WHEREAS, Executive and the Company have mutually agreed to terminate
Executive's employment relationship with the Company subject to the closing of
the merger of Longhorn Acquisition Corp. with and into the Company as of the
closing date of such merger (the "SEPARATION DATE") upon the terms set forth
herein;
NOW, THEREFORE, in consideration of the covenants undertaken and the
releases contained in this Separation Agreement and the Consulting Agreement
attached as EXHIBIT B hereto (the "CONSULTING AGREEMENT"), Executive and the
Company agree as follows:
I. RESIGNATION. Executive hereby irrevocably resigns as an officer,
director, employee, member, manager and in any other capacity with the Company
and each of its Affiliates, effective as of the Separation Date. On the
Separation Date, Executive agrees that she shall confirm such resignation by
executing the letter attached as EXHIBIT A hereto and promptly delivering such
letter to the Company. The Company and its Affiliates hereby accept such
resignation, effective as of the Separation Date. Executive waives any right or
claim to reinstatement as an employee of the Company or any of its Affiliates by
which she was employed at any time prior to the Separation Date. (For purposes
of this Separation Agreement, the term "AFFILIATE" has the meaning accorded to
such term in Rule 12b-2 under the Securities Exchange Act of 1934, as amended.)
Executive acknowledges and agrees that Executive has received all amounts owed
for her regular and usual salary (including, but not limited to, any severance,
overtime, bonus, accrued vacation, commissions, or other wages), reimbursement
of expenses, and usual benefits, and that all payments due to Executive from the
Company have been received.
II. CONSULTING AGREEMENT. Concurrently with the execution of this
Separation Agreement, Executive shall execute the Consulting Agreement attached
as EXHIBIT B hereto.
III. RELEASE. Executive, on behalf of herself, her descendants,
dependents, heirs, executors, administrators, assigns, and successors, and each
of them, hereby covenants not to xxx and fully releases and discharges the
Company and each of its parents, subsidiaries and Affiliates, past and present,
as well as each of their respective trustees, directors, officers, members,
managers, partners, agents, attorneys, insurers, employees, stockholders,
representatives, assigns, and successors, past and present, and each of them
(hereinafter together and collectively referred to as the "RELEASEES") with
respect to and from any and all claims, wages, demands, rights, liens,
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agreements or contracts (written or oral), covenants, actions, suits, causes of
action, obligations, debts, costs, expenses, attorneys' fees, damages,
judgments, orders and liabilities of whatever kind or nature in law, equity or
otherwise, whether now known or unknown, suspected or unsuspected, and whether
or not concealed or hidden (each, a "CLAIM"), which she now owns or holds or she
has at any time heretofore owned or held or may in the future own or hold as
against any of said Releasees (including, without limitation, any Claim arising
out of or in any way connected with Executive's service as an officer, director,
employee, member or manager of any Releasee, Executive's separation from her
position as an officer, director, employee, manager and/or member, as
applicable, of any Releasee, or any other transactions, occurrences, acts or
omissions or any loss, damage or injury whatever), resulting from any act or
omission by or on the part of said Releasees, or any of them, committed or
omitted prior to the date of this Separation Agreement including, without
limiting the generality of the foregoing, any Claim under Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act of 1967 ("ADEA"),
the Americans with Disabilities Act, the Family and Medical Leave Act of 1993,
the California Fair Employment and Housing Act, the California Family Rights
Act, or any other federal, state or local law, regulation, or ordinance, or any
Claim for severance pay, bonus, sick leave, holiday pay, vacation pay, life
insurance, health or medical insurance or any other fringe benefit, workers'
compensation or disability. However, this release does not cover any Claim that
cannot be so released as a matter of applicable law and does not prohibit either
party from filing a claim to enforce or challenge the validity of the terms of
this Separation Agreement pursuant to the provisions hereof. Executive
acknowledges and agrees that she has received any and all leave and other
benefits that she has been and is entitled to pursuant to the Family and Medical
Leave Act of 1993.
Without limiting the generality of the foregoing release,
Executive hereby expressly waives any right to indemnification, advancement of
legal fees and expenses, reimbursement or any other form of recovery from the
Company and its current and future affiliates to the extent that Executive
incurs any judgment or award ("LOSS") resulting from, based upon, arising out of
or related to the pending litigation entitled XXXXXXX X. ALLERGY RESEARCH GROUP,
INC. in Palm Beach County, Florida (including any current or future allegations
of breach of fiduciary duty by Executive during the periods to which such
litigation relates, but excluding any future action taken by Xxxxxxx and its
affiliates to the extent that such future action does not relate to such
allegations of breach of fiduciary duty by Executive during the periods to which
such litigation relates) (the "XXXXXXX LITIGATION"), except to the extent that
such Loss is covered by directors and officers liability insurance purchased by
and maintained by the Company for such periods to which the Xxxxxxx Litigation
relates. Executive shall indemnify and hold harmless the Company and its present
and future affiliates, to the fullest extent lawful, from and against any Loss,
promptly as incurred, directly or indirectly resulting from, based upon, arising
out of, or related to the Xxxxxxx Litigation, except to the extent that such
Loss is covered by directors and officers liability insurance purchased by and
maintained by the Company for such periods to which the Xxxxxxx Litigation
relates; provided, however, that Company shall not be liable to indemnify
Executive for any amounts paid in settlement of any of the Xxxxxxx Litigation
effected without the Company's written consent, and the Company shall not settle
any of the Xxxxxxx Litigation in a manner which would impose any penalty or
limitation on Executive without Executive's written consent, which consent, in
either case, shall not be unreasonably withheld.
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IV. WAIVER OF CIVIL CODE SECTION 1542. This Separation Agreement is
intended to be effective as a general release of and bar to each and every Claim
hereinabove specified. Accordingly, Executive hereby expressly waives any and
all rights and benefits conferred by Section 1542 of the California Civil Code
and any similar provision of any other applicable state law as to the Claims.
Section 1542 of the California Civil Code provides:
"A GENERAL RELEASE DOES NOT EXTEND TO ANY CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR."
Executive acknowledges that she later may discover claims, demands,
causes of action or facts in addition to or different from those which Executive
now knows or believes to exist with respect to the subject matter of this
Agreement and which, if known or suspected at the time of executing this
Separation Agreement, may have materially affected its terms. Nevertheless,
Executive hereby waives, as to the Claims, any claims, demands, and causes of
action that might arise as a result of such different or additional claims,
demands, causes of action or facts.
V. ADEA WAIVER. Executive expressly acknowledges and agrees that by
entering into this Separation Agreement, she is waiving any and all rights or
claims that she may have arising under the ADEA, which have arisen on or before
the date of execution of this Separation Agreement. Executive further expressly
acknowledges and agrees that:
(a) In return for this Separation Agreement, she will receive
consideration beyond that which she was already entitled to receive before
entering into this Separation Agreement;
(b) She is hereby advised in writing by this Separation
Agreement to consult with an attorney before signing this Separation Agreement;
(c) She has voluntarily chosen to enter into this Separation
Agreement and has not been forced or pressured in any way to sign it;
(d) She was given a copy of this Separation Agreement on July
18, 2008 and informed that she had twenty-one (21) days within which to consider
the Separation Agreement and that if she wished to execute this Separation
Agreement prior to expiration of such 21-day period, she should execute the
Acknowledgement and Waiver attached hereto as EXHIBIT C;
(e) She was informed that she has seven (7) days following the
date of execution of this Separation Agreement in which to revoke this
Separation Agreement, and this Separation Agreement will become null and void if
Executive elects revocation during that time. Any revocation must be in writing
and must be received by the Company during the seven-day revocation period. In
the event that Executive exercises her right of revocation, neither the Company
nor Executive will have any obligations under this Separation Agreement; and
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(f) Nothing in this Separation Agreement prevents or precludes
Executive from challenging or seeking a determination in good faith of the
validity of this waiver under the ADEA, nor does it impose any condition
precedent, penalties or costs from doing so, unless specifically authorized by
federal law.
VI. NO TRANSFERRED CLAIMS. Executive warrants and represents that
Executive has not heretofore assigned or transferred to any person not a party
to this Separation Agreement any released matter or any part or portion thereof
and she shall defend, indemnify and hold the Company and each of its Affiliates
harmless from and against any claim (including the payment of attorneys' fees
and costs actually incurred whether or not litigation is commenced) based on or
in connection with or arising out of any such assignment or transfer made,
purported or claimed.
VII. MISCELLANEOUS
A. ASSIGNMENT. This Separation Agreement is personal in its
nature and neither of the parties hereto shall, without the consent of the
other, assign or transfer this Separation Agreement or any rights or obligations
hereunder; PROVIDED, HOWEVER, that in the event of a merger, consolidation, or
transfer or sale of all or substantially all of the assets of the Company with
or to any other individual(s) or entity, this Separation Agreement shall,
subject to the provisions hereof, be binding upon and inure to the benefit of
such successor and such successor shall discharge and perform all the promises,
covenants, duties, and obligations of the Company hereunder.
B. NUMBER AND GENDER; EXAMPLES. Where the context requires, as
used in this Separation Agreement, the singular shall include the plural, the
plural shall include the singular, and any gender shall include all other
genders. Where specific language is used to clarify by example a general
statement contained herein, such specific language shall not be deemed to
modify, limit or restrict in any manner the construction of the general
statement to which it relates.
C. SECTION HEADINGS. The section headings of, and titles of
paragraphs and subparagraphs contained in, this Separation Agreement are for the
purpose of convenience only, and they neither form a part of this Separation
Agreement nor are they to be used in the construction or interpretation thereof.
D. GOVERNING LAW. This Separation Agreement will be governed
by and construed in accordance with the laws of the state of California, without
giving effect to any choice of law or conflicting provision or rule (whether of
the state of California or any other jurisdiction) that would cause the laws of
any jurisdiction other than the state of California to be applied. In
furtherance of the foregoing, the internal law of the state of California will
control the interpretation and construction of this Separation Agreement, even
if under such jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily apply.
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E. SEVERABILITY. If any provision of this Separation Agreement
or the application thereof is held invalid, the invalidity shall not affect
other provisions or applications of this Separation Agreement which can be given
effect without the invalid provisions or applications and to this end the
provisions of this Separation Agreement are declared to be severable.
F. ENTIRE AGREEMENT. This Separation Agreement, together with
the Consulting Agreement, embodies the entire agreement of the parties hereto
respecting the matters within its scope. This Separation Agreement supersedes
all prior and contemporaneous agreements of the parties hereto that directly or
indirectly bears upon the subject matter hereof. Any prior negotiations,
correspondence, agreements, proposals or understandings relating to the subject
matter hereof shall be deemed to have been merged into this Separation
Agreement, and to the extent inconsistent herewith, such negotiations,
correspondence, agreements, proposals, or understandings shall be deemed to be
of no force or effect. There are no representations, warranties, or agreements,
whether express or implied, or oral or written, with respect to the subject
matter hereof, except as expressly set forth herein. Notwithstanding the
foregoing, the Non-Competition Agreement between Executive and the Company
entered into on or about the date hereof is outside of the scope of the
integration provisions of this Section VII.F.
G. MODIFICATIONS. This Separation Agreement may not be
amended, modified or changed (in whole or in part), except by a formal,
definitive written agreement expressly referring to this Separation Agreement,
which agreement is executed by both of the parties hereto.
H. WAIVER. Neither the failure nor any delay on the part of a
party to exercise any right, remedy, power or privilege under this Separation
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any
waiver of any right, remedy, power or privilege with respect to any occurrence
be construed as a waiver of such right, remedy, power or privilege with respect
to any other occurrence. No waiver shall be effective unless it is in writing
and is signed by the party asserted to have granted such waiver.
I. ARBITRATION. Any dispute, claim or controversy arising out
of or relating to this Separation Agreement or the Consulting Agreement, the
enforcement or interpretation of any provision hereof or thereof, or because of
an alleged breach, default, or misrepresentation in connection with any
provision hereof or thereof, including the determination of the scope or
applicability of this agreement to arbitrate, shall be submitted to final and
binding arbitration, to be held in San Francisco, California before a sole
arbitrator (the "ARBITRATOR") selected from the American Arbitration
Association, as the exclusive forum for the resolution of such dispute;
provided, however, that provisional injunctive relief may, but need not, be
sought by either party to this Agreement in a court of law while arbitration
proceedings are pending, and any provisional injunctive relief granted by such
court shall remain effective until the matter is finally determined by the
Arbitrator. Final resolution of any dispute through arbitration may include any
remedy or relief which the Arbitrator deems just and equitable, including any
and all remedies provided by applicable state or federal statutes. At the
conclusion of the arbitration, the Arbitrator shall issue a written decision
that sets forth the essential findings and conclusions upon which the
Arbitrator's award or decision is based. Any award or relief granted by the
Arbitrator hereunder shall be final and binding on the parties hereto and may be
enforced by any court of competent jurisdiction. The parties acknowledge and
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agree that they are hereby waiving any rights to trial by jury in any action,
proceeding or counterclaim brought by either of the parties against the other in
connection with any matter whatsoever arising out of or in any way connected
with this Agreement or Executive's employment or the Consulting Agreement. The
parties agree that the Company shall be responsible for payment of the forum
costs of any arbitration hereunder, including the Arbitrator's fee, but that
each party shall bear its own attorneys fees and other expenses.
J. NOTICES. Any notice required to be delivered hereunder
shall be in writing and shall be addressed:
(i) if to the Company, to:
c/o Country Life, LLC
000 Xxxxxxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx
with a copy to:
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq. and Xxxx X.
Xxxxxxx, Esq.
(ii) if to Executive, to Executive's last known
address as reflected on the books and records of the Company; or, in each case,
to such other address as such party may hereafter specify for the purpose by
written notice to the other party hereto. Any such notice shall be deemed
received on the date of receipt by the recipient thereof if received prior to
5:00 p.m. in the place of receipt and such day is a business day in the place of
receipt. Otherwise, any such notice shall be deemed not to have been received
until the next succeeding business day in the place of receipt.
K. LEGAL COUNSEL; MUTUAL DRAFTING. Each party recognizes that
this is a legally binding contract and acknowledges and agrees that they have
had the opportunity to consult with legal counsel of their choice. Each party
has cooperated in the drafting, negotiation and preparation of this Separation
Agreement. Hence, in any construction to be made of this Separation Agreement,
the same shall not be construed against either party on the basis of that party
being the drafter of such language. Executive agrees and acknowledges that she
has read and understands this Separation Agreement, is entering into it freely
and voluntarily, and has been advised to seek counsel prior to entering into
this Separation Agreement and has had ample opportunity to do so.
L. COUNTERPARTS. This Separation Agreement may be executed in
any number of counterparts, each of which shall be deemed an original as against
any party whose signature appears thereon, and all of which together shall
constitute one and the same instrument. This Separation Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
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shall bear the signatures of all of the parties reflected hereon as the
signatories. Photographic copies of such signed counterparts may be used in lieu
of the originals for any purpose.
M. TAXES. The Company shall have the right to withhold from
any payment hereunder or under any other agreement between the Company and
Executive the amount required by law to be withheld with respect to such payment
or other benefits provided to Executive. Other than as to such withholding
right, Executive shall be solely responsible for any taxes due as a result of
the payments and benefits received by Executive contemplated by this Separation
Agreement.
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The undersigned have read and understand the consequences of
this Separation Agreement and voluntarily sign it. The undersigned declare under
penalty of perjury under the laws of the State of Florida that the foregoing is
true and correct.
ALLERGY RESEARCH GROUP, INC.
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: President
EXECUTIVE
/s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
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EXHIBIT A
RESIGNATION LETTER
September ___, 2008
To: The Boards of Directors of Allergy Research Group, Inc. and
Nutricology, Inc.
From: Xxxxx Xxxxxx
I hereby resign as an employee, officer, director, member,
manager and in any other capacity with Allergy Research Group, Inc.,
Nutricology, Inc. and each of their respective affiliates, effective as of the
date set forth above.
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Xxxxx Xxxxxx
A-1
EXHIBIT B
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "AGREEMENT") is entered into
this 8th day of August 2008, by and between Xxxxx Xxxxxx, an individual (the
"CONSULTANT"), and Allergy Research Group, Inc., a Florida corporation (the
"COMPANY").
RECITALS
THE PARTIES ENTER THIS AGREEMENT on the basis of the following
facts, understandings and intentions:
A. The Company desires that the Consultant provide consulting
services to the Company as described below, on the terms and conditions
hereinafter set forth.
B. The Consultant desires to provide such services to the
Company on such terms and conditions.
C. This Agreement, together with that certain Employment
Separation and General Release Agreement, dated as of August 8, 2008, by and
between Executive and the Company (the "SEPARATION AGREEMENT"), shall govern the
relationship between the Consultant and the Company from and after the Effective
Date and supersedes and negates all previous agreements with respect to such
relationship.
NOW, THEREFORE, in consideration of the above recitals
incorporated herein and the mutual covenants and promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby expressly acknowledged, the parties agree as follows:
1. ENGAGEMENT. The Company hereby engages the Consultant and the
Consultant hereby accepts such engagement, upon the terms and
conditions hereinafter set forth, subject to the closing of the merger
of Longhorn Acquisition Corp. with and into the Company, for the period
commencing on the closing date of such merger (the "EffectIVE DATE")
and ending on the second anniversary of the Effective Date, subject to
earlier termination as provided in Section 4 herein (such period is
referred to as the "CONSULTING TERM").
2. CONSULTING SERVICES.
2.1 SERVICES. The Consultant shall serve as the Company's
Marketing Consultant and perform consulting services during
the Consulting Term as reasonably requested from time to time
on matters with which the Consultant was familiar and/or about
which the Consultant acquired knowledge, expertise and/or
experience during the time that the Consultant was employed by
the Company. Such consulting services shall include assisting
with planning and representation of the Company at trade
shows, relevant industry conferences and similar events, and
providing such other advice to and consultation with the
Company and such of its affiliates as the Company may
reasonably request.
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2.2 TIME COMMITMENT. The Consultant agrees to devote sufficient
time to the business of the Company and its affiliates to
accomplish the projects assigned by the Company. The
Consultant agrees that she will not accept other engagements
(employment, consulting or otherwise) during the Consulting
Term that would interfere with her ability to accomplish such
projects.
2.3 PERFORMANCE. The Consultant agrees to honestly and faithfully
present and conduct herself at all times during the
performance of services for the Company. The Consultant agrees
to perform her responsibilities hereunder in a diligent,
timely, and competent manner. The Consultant agrees to
truthfully and faithfully account for and deliver to the
Company all property (including, without limitation, monies,
materials, securities, etc.) belonging to the Company or any
of its affiliates which the Consultant may receive from or on
account of the Company or any of its affiliates, and that upon
the Consultant's termination or the Company's demand the
Consultant will immediately deliver to the Company all such
property belonging to the Company or any of its affiliates.
3. COMPENSATION.
3.1 CONSULTING FEE. As consideration for the Consultant's
performance of these services, the Company shall pay the
Consultant an annual fee of One Hundred Thousand Dollars
($100,000) (the "CONSULTING FEE") during the Consulting Term,
such amount to be paid in substantially equal installments in
accordance with the Company's standard payroll schedule. The
parties expressly agree that, except as provided below in this
Section 3, the Consultant shall not be entitled to any other
compensation for her services hereunder except as provided in
this Section 3.1.
3.2 REIMBURSEMENT OF EXPENSES. The Consultant shall be entitled to
reimbursement for all reasonable business expenses, including
reasonable business travel expenses, the Consultant incurs
during the Consulting Term in connection with carrying out the
Consultant's duties for the Company; provided that (i) such
expenses are approved in advance by the Company, and (ii) the
Consultant provides the Company with documentation acceptable
to the Company evidencing such expenses and such expenses are
otherwise incurred and submitted for reimbursement in
accordance with the Company's expense reimbursement policies
in effect from time to time. Any such reimbursement shall be
made as soon as reasonably practicable and in all events not
later than the end of the calendar year following the year in
which the related expense was incurred.
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4. TERMINATION.
4.1 TERMINATION BY THE COMPANY. The Consultant's engagement by the
Company, and the Consulting Term, may be terminated at any
time by the Company: (i) with Cause (as defined in Section
4.4), or (ii) with no less than thirty (30) days advance
notice to the Consultant, without Cause, or (iii) in the event
of the Consultant's death.
4.2 TERMINATION BY THE CONSULTANT. The Consultant's engagement by
the Company, and the Consulting Term, may be terminated by the
Consultant with no less than thirty (30) days advance notice
to the Company.
4.3 OBLIGATIONS OF THE COMPANY UPON TERMINATION. If the
Consultant's engagement is terminated by the Company under
Section 4.1(i) or 4.1(iii) or by the Consultant under Section
4.2, the Consulting Term shall terminate without further
obligations to the Consultant other than for the payment of
any Consulting Fee payable pursuant to Section 3.1 to the
extent earned by but not previously paid to the Consultant as
of the Termination Date (the "Accrued Obligations"), which
shall be paid to the Consultant within five (5) business days
after the Termination Date. If the Consultant's engagement is
terminated without Cause under Section 4.1(ii), the Consulting
Term shall terminate, and the Consultant shall be entitled to
(a) payment of any Accrued Obligations within five (5)
business days after the Termination Date, and (b) continued
payment of the Consulting Fee as provided in Section 3.1 for
the period commencing on the Termination Date and ending on
the second anniversary of the Effective Date; provided,
however, that if the Consultant breaches her obligations under
Section 6 of this Agreement at any time, from and after the
date of such breach and not in any way in limitation of any
right or remedy otherwise available to the Company, the
Consultant will no longer be entitled to, and the Company will
no longer be obligated to pay, any remaining unpaid amount
contemplated by the foregoing clause (b) of this Section 4.3.
The Consultant agrees that the payments provided in this
Section 4.3 shall constitute the exclusive and sole remedy for
any termination of the Consultant's engagement, and the
Consultant covenants not to assert or pursue any other
remedies, at law or in equity, with respect to any termination
of the engagement.
4.4 CERTAIN DEFINED TERMS.
(a) As used herein, "CAUSE" shall mean, as reasonably
determined by the Company's Board of Directors (the "BOARD")
(excluding the Consultant, if she is then a member of the
Board) based on the information then known to it, that one or
more of the following has occurred: (i) the Consultant is
convicted of, pled guilty or pled NOLO CONTENDERE to a felony
(under the laws of the United States or any relevant state, or
a similar crime or offense under the applicable laws of any
relevant foreign jurisdiction); (ii) the Consultant has
engaged in acts of fraud, dishonesty or other acts of willful
misconduct in the course of her duties hereunder; (iii) the
Consultant willfully fails to perform or uphold her duties
under this Agreement and/or willfully fails to comply with
reasonable directives of the Board; or (iv) a breach by the
Consultant of any provision of Section 6 or any material
breach by the Consultant of any other contract she is a party
to with the Company or any of its affiliates.
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(b) As used herein, "TERMINATION DATE" shall mean the date of
the termination of the Consultant's engagement under this
Agreement for any reason.
4.5. NOTICE OF TERMINATION. Any termination of the Consultant's
engagement under this Agreement shall be communicated by
written notice of termination from the terminating party to
the other party. The notice of termination shall indicate the
specific provision(s) of this Agreement relied upon in
effecting the termination.
4.6 SECTION 409A. If the Consultant is a "specified employee" as
of the date of her "separation from service" from the Company
(as each such term is defined for purposes of Section 409A of
the U.S. Internal Revenue Code ("Section 409A")), the
Consultant shall not be entitled to any payment or benefit
pursuant to Section 4.3(b) until the earlier of (i) the date
which is six (6) months after the Consultant's separation from
service, or (ii) the date of the Consultant's death. The
provisions of this Section 4.6 shall only apply if, and to the
extent, required to avoid the imputation of any tax, penalty
or interest pursuant to Section 409A. Any amounts otherwise
payable to the Consultant upon or in the six (6) month period
following the Consultant's separation from service that are
not so paid by reason of this Section 4.6 shall be paid
(without interest) as soon as practicable (and in all events
within thirty (30) days) after the date that is six (6) months
after the date of such separation from service (or, if
earlier, as soon as practicable, and in all events within
thirty (30) days, after the date of the Consultant's death).
5. RELATIONSHIP. The Consultant shall operate at all times as an
independent contractor of the Company. This Agreement does not
authorize the Consultant to act as an agent of the Company or any of
its affiliates or to make commitments on behalf of the Company or any
of its affiliates. The Consultant and the Company intend that an
independent contractor relationship be created by this Agreement, and
nothing herein shall be construed as creating an employer/employee
relationship, partnership, joint venture, or other business group or
concerted action. The Consultant at no time shall hold herself out as
an agent of the Company or any of its affiliates for any purpose,
including reporting to any governmental authority or agency, and shall
have no authority to bind the Company or any of its affiliates to any
obligation whatsoever.
5.1 RIGHT TO CONTROL. The Consultant shall have the right to
control and determine the method and means of performing the
above services. The Company shall not have the right to
control or determine such method or means, being interested
only in the results obtained, and having the general right of
inspection and supervision in order to secure the satisfactory
completion of such services.
5.2 TIME AND PLACE OF WORK. The Consultant shall perform the
services required by this Agreement at any place or location
and at such times as the Consultant shall determine, but shall
comply with the reasonable deadlines set by the Company. When
the Company requires the Consultant to be present at the
Company's offices in Alameda, California, the Company will
provide the Consultant with a place to perform her services
for the Company while at such office.
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5.3 EQUIPMENT AND SUPPLIES. The Consultant, at the Consultant's
expense and risk, agrees to provide all equipment, supplies,
and tools necessary to perform the above services, and will be
responsible for all other expenses required for the
performance of those services, except such of said items as
the Company specifically agrees in writing to furnish.
5.4 TAXES. The Consultant and the Company agree that the
Consultant is not an employee for state or federal tax
purposes. The Consultant shall be solely responsible for any
taxes due as a result of the payment of the Consulting Fee,
and the Consultant will defend and indemnify the Company and
each of its affiliates from and against any tax liability that
any of them may have with respect to any such payment and
against any and all losses or liabilities, including defense
costs, arising out of the Consultant's failure to pay any
taxes due with respect to any such payment. If the Company
reasonably determines that applicable law requires that taxes
should be withheld from any such payment, the Company reserves
the right to withhold, as legally required, and to notify the
Consultant accordingly.
5.5 WORKERS' COMPENSATION AND UNEMPLOYMENT INSURANCE. The
Consultant is not entitled to worker's compensation benefits
or unemployment compensation benefits provided by the Company.
The Consultant shall be solely responsible for the payment of
her worker's compensation, unemployment compensation, and
other such payments. The Company will not pay for worker's
compensation for the Consultant. The Company will not
contribute to a state unemployment fund for the Consultant.
The Company will not pay the federal unemployment tax for the
Consultant.
5.6 EMPLOYMENT POLICIES NOT APPLICABLE. The Consultant and the
Company agree that the Consultant shall not be subject to the
provisions of any personnel policy or rules and regulations
applicable to employees, and the Consultant shall fulfill her
duties independent of and without supervisory control by the
Company.
6. PROTECTIVE COVENANTS.
6.1 CONFIDENTIAL INFORMATION; INVENTIONS.
(a) The Consultant shall not disclose or use at any time,
either during the Consulting Term or thereafter, any
Confidential Information (as defined below) of which the
Consultant is or becomes aware, whether or not such
information is developed by her, except to the extent that
such disclosure or use is directly related to and required by
the Consultant's performance in good faith of duties for the
Company. The Consultant will take all appropriate steps to
safeguard Confidential Information in her possession and to
protect it against disclosure, misuse, espionage, loss and
theft. The Consultant shall deliver to the Company at the
termination of the Consulting Term, or at any time the Company
may request, all memoranda, notes, plans, records, reports,
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computer tapes and software and other documents and data (and
copies thereof) relating to the Confidential Information or
the Work Product (as hereinafter defined) of the business of
the Company or any of its Affiliates which the Consultant may
then possess or have under her control. Notwithstanding the
foregoing, the Consultant may truthfully respond to a lawful
and valid subpoena or other legal process, but shall give the
Company the earliest possible notice thereof, shall, as much
in advance of the return date as possible, make available to
the Company and its counsel the documents and other
information sought, and shall assist the Company and such
counsel in resisting or otherwise responding to such process.
As used in this Section 6, "AFFILIATE" of the Company means an
individual or entity that directly or indirectly through one
or more intermediaries, controls, or is controlled by, or is
under common control with, the Company. As used in this
definition, the term "control," including the correlative
terms "controlling," "controlled by" and "under common control
with," means the possession, directly or indirectly, of the
power to direct or cause the direction of management or
policies (whether through ownership of securities or any
partnership or other ownership interest, by contract or
otherwise) of any entity. The Company and the Consultant each
acknowledge and understand that nothing in this Agreement is
intended to prohibit the Consultant from use of her general
knowledge of business operations or the industries in which
the Company does or intends to do business.
(b) As used in this Agreement, the term "CONFIDENTIAL
INFORMATION" means information that is not generally known to
the public and that is used, developed or obtained by the
Company in connection with its business, including, but not
limited to, information and data obtained by the Consultant
while employed or engaged by the Company or any predecessors
thereof (including those obtained prior to the Effective Date)
concerning the Company's (or such predecessor's) (i) business
or affairs, (ii) products or services, (iii) fees, costs and
pricing structures, (iv) designs, (v) analyses, (vi) drawings,
photographs and reports, (vii) computer software, including
operating systems, applications and program listings developed
by the Company (or such predecessor), (viii) flow charts,
manuals and documentation, (ix) data bases, (x) accounting and
business methods, (xi) inventions, devices, new developments,
methods and processes, whether patentable or unpatentable and
whether or not reduced to practice, (xii) customer or client
lists, (xiii) other copyrightable works, (xiv) all production
methods, processes, technology and trade secrets, and (xv) all
similar and related information in whatever form. Confidential
Information will not include any information that has been
published (other than a disclosure by the Consultant in breach
of this Agreement) in a form generally available to the public
prior to the date the Consultant proposes to disclose or use
such information. Confidential Information will not be deemed
to have been published merely because individual portions of
the information have been separately published, but only if
all material features comprising such information have been
published in combination.
(c) As used in this Agreement, the term "WORK PRODUCT" means
all inventions, innovations, improvements, technical
information, systems, software developments, methods, designs,
analyses, drawings, reports, service marks, trademarks, trade
names, logos and all similar or related information (whether
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patentable or unpatentable, copyrightable, registerable as a
trademark, reduced to writing, or otherwise) which relates to
the Company's or any of its Affiliates' actual or anticipated
business, research and development or existing or future
products or services of which Consultant is aware and which
are conceived, developed or made by the Consultant (whether or
not during usual business hours, whether or not by the use of
the facilities of the Company or any of its Affiliates, and
whether or not alone or in conjunction with any other Person)
while employed or engaged by the Company or any Affiliate
(including those conceived, developed or made prior to the
Effective Date) together with all patent applications, letters
patent, trademark, trade name and service xxxx applications or
registrations, copyrights and reissues thereof that may be
granted for or upon any of the foregoing. All Work Product
that the Consultant may have discovered, invented or
originated during her employment or engagement by the Company
or any of its Affiliates prior to the Effective Date, that she
may discover, invent or originate during the Consulting Term
or at any time in the period of twelve (12) months after the
Termination Date, shall be the exclusive property of the
Company and its Affiliates, as applicable, and Consultant
hereby assigns all of Consultant's right, title and interest
in and to such Work Product to the Company or its applicable
Affiliate, including all intellectual property rights therein.
Consultant shall promptly disclose all Work Product to the
Company, shall execute at the request of the Company any
assignments or other documents the Company may deem necessary
to protect or perfect its (or any of its Affiliates', as
applicable) rights therein, and shall assist the Company, at
the Company's expense, in obtaining, defending and enforcing
the Company's (or any of its Affiliates', as applicable)
rights therein. The Consultant hereby appoints the Company as
her attorney-in-fact to execute on her behalf any assignments
or other documents deemed necessary by the Company to protect
or perfect the Company, the Company's (and any of its
Affiliates', as applicable) rights to any Work Product. As
used in this Section 6, the term "PERSON" shall be construed
broadly and shall include, ------ without limitation, an
individual, a partnership, a limited liability company, a
corporation, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a
governmental entity or any department, agency or political
subdivision thereof.
6.2 RESTRICTION ON COMPETITION. The Consultant agrees that if the
Consultant were to become employed by, or substantially
involved in, the business of a competitor of the Company or
any of its Affiliates during the eighteen (18) month period
following the Termination Date, it would be very difficult for
the Consultant not to rely on or use the Company's and its
Affiliates' trade secrets and confidential information. Thus,
to avoid the inevitable disclosure of the Company's and its
Affiliates' trade secrets and confidential information, and to
protect such trade secrets and confidential information and
the Company's and its Affiliates' relationships and goodwill
with customers, during the Consulting Term and for a period of
eighteen (18) months after the Termination Date, the
Consultant will not directly or indirectly through any other
Person engage in, enter the employ of, render any services to,
have any ownership interest in, nor participate in the
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financing, operation, management or control of, any Competing
Business. For purposes of this Agreement, the phrase "directly
or indirectly through any other Person engage in" shall
include, without limitation, any direct or indirect ownership
or profit participation interest in such enterprise, whether
as an owner, stockholder, member, partner, joint venturer or
otherwise, and shall include any direct or indirect
participation in such enterprise as an employee, consultant,
director, officer, licensor of technology or otherwise. For
purposes of this Agreement, "COMPETING BUSINESS" means a
Person anywhere in the continental United States and elsewhere
in the world where the Company and its Affiliates engage in
business on the Termination Date (the "RESTRICTED AREA") that
at any time during the Consulting Term has competed, or any
and time during the eighteen (18) month period following the
Termination Date competes, with the Company or any of its
Affiliates in any business related to research, development,
manufacture, distribution and sale of vitamins, minerals,
health and nutritional supplements, sports nutrition products,
herbal teas and natural health and beauty care products and
such other businesses as the Company is engaged in on the
Termination Date. Nothing herein shall prohibit the Consultant
from being a passive owner of not more than 2% of the
outstanding stock of any class of a corporation which is
publicly traded, so long as the Consultant has no active
participation in the business of such corporation.
6.3 NON-SOLICITATION OF EMPLOYEES AND CONSULTANTS. During the
Consulting Term and for a period of eighteen (18) months after
the Termination Date, the Consultant will not directly or
indirectly through any other Person induce or attempt to
induce any employee or independent contractor of the Company
or any Affiliate of the Company to leave the employ or
service, as applicable, of the Company or such Affiliate, or
in any way interfere with the relationship between the Company
or any such Affiliate, on the one hand, and any employee or
independent contractor thereof, on the other hand.
6.4 NON-SOLICITATION OF CUSTOMERS. During the Consulting Term and
for a period of eighteen (18) months after the Termination
Date, the Consultant will not directly or indirectly through
any other Person influence or attempt to influence customers,
vendors, suppliers, licensors, lessors, joint venturers,
associates, consultants, agents, or partners of the Company or
any Affiliate of the Company to divert their business away
from the Company or such Affiliate, and the Consultant will
not otherwise interfere with, disrupt or attempt to disrupt
the business relationships, contractual or otherwise, between
the Company or any Affiliate of the Company, on the one hand,
and any of its or their customers, suppliers, vendors,
lessors, licensors, joint venturers, associates, officers,
employees, consultants, managers, partners, members or
investors, on the other hand.
6.5 UNDERSTANDING OF COVENANTS. The Consultant acknowledges that,
in the course of her employment or engagement with the Company
and/or its Affiliates and their predecessors, she has become
familiar, or will become familiar, with the Company's and its
Affiliates' and their predecessors' trade secrets and with
other confidential and proprietary information concerning the
Company, its Affiliates and their respective predecessors and
that her services have been and will be of special, unique and
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extraordinary value to the Company and its Affiliates. The
Consultant agrees that the foregoing covenants set forth in
this Section 6 (together, the "RESTRICTIVE COVENANTS") are
reasonable and necessary to protect the Company's and its
Affiliates' trade secrets and other confidential and
proprietary information, good will, stable workforce, and
customer relations.
Without limiting the generality of the Consultant's agreement
in the preceding paragraph, the Consultant (i) represents that
she is familiar with and has carefully considered the
Restrictive Covenants, (ii) represents that she is fully aware
of her obligations hereunder, (iii) agrees to the
reasonableness of the length of time, scope and geographic
coverage, as applicable, of the Restrictive Covenants, (iv)
agrees that the Company and its Affiliates currently conducts
business throughout the Restricted Area, and (v) agrees that
the Restrictive Covenants will continue in effect for the
applicable periods set forth above in this Section 6
regardless of whether the Consultant is then entitled to
receive severance pay or benefits from the Company. The
Consultant understands that the Restrictive Covenants may
limit her ability to earn a livelihood in a business similar
to the business of the Company and any of its Affiliates, but
she nevertheless believes that she has received and will
receive sufficient consideration and other benefits as an
employee and consultant of the Company and as otherwise
provided hereunder or as described in the recitals hereto to
clearly justify such restrictions which, in any event (given
her education, skills and ability), the Consultant does not
believe would prevent her from otherwise earning a living. The
Consultant agrees that the Restrictive Covenants do not confer
a benefit upon the Company disproportionate to the detriment
of the Consultant.
The Consultant acknowledges and agrees that the covenants set
forth in this Section 6 are in addition to, and not in lieu
of, the restrictive covenants set forth in that certain
Noncompetition Agreement dated August 8, 2008 by and between
the Consultant and KI NutriCare, Inc., the parent corporation
of the Company.
6.6 ENFORCEMENT. The Consultant agrees that the Consultant's
services are unique and that she has access to Confidential
Information and Work Product. Accordingly, the Consultant
agrees that a material breach by the Consultant of any of the
covenants in this Section 6 would cause immediate and
irreparable harm to the Company that would be difficult or
impossible to measure, and that damages to the Company for any
such injury would therefore be an inadequate remedy for any
such breach. Therefore, the Consultant agrees that in the
event of any breach or threatened breach of any provision of
this Section 6, the Company shall be entitled, in addition to
and without limitation upon all other remedies the Company may
have under this Agreement, at law or otherwise, to obtain
specific performance, injunctive relief and/or other
appropriate relief (without posting any bond or deposit) in
order to enforce or prevent any violations of the provisions
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of this Section 6; provided, however, that the Company agrees
to attempt in good faith to discuss any such breach or
threatened breach with the Consultant prior to seeking such
relief and, if the parties so agree and such breach or
threatened breach is reasonably susceptible of cure in the
circumstances, to permit Consultant a reasonable opportunity
to so cure. The Consultant further agrees that the applicable
period of time any Restrictive Covenant is in effect following
the Termination Date, as determined pursuant to the foregoing
provisions of this Section 6, such period of time shall be
extended by the same amount of time that Consultant is in
breach of any Restrictive Covenant.
7. ASSIGNMENT. This Agreement is personal in its nature and neither of the
parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder;
PROVIDED, HOWEVER, that in the event of a merger, consolidation, or
transfer or sale of all or substantially all of the assets of the
Company with or to any other individual(s) or entity, this Agreement
shall, subject to the provisions hereof, be binding upon and inure to
the benefit of such successor and such successor shall discharge and
perform all the promises, covenants, duties, and obligations of the
Company hereunder.
8. NUMBER AND GENDER; EXAMPLES. Where the context requires, as used in
this Agreement, the singular shall include the plural, the plural shall
include the singular, and any gender shall include all other genders.
Where specific language is used to clarify by example a general
statement contained herein, such specific language shall not be deemed
to modify, limit or restrict in any manner the construction of the
general statement to which it relates.
9. SECTION HEADINGS. The section headings of, and titles of paragraphs and
subparagraphs contained in, this Agreement are for the purpose of
convenience only, and they neither form a part of this Agreement nor
are they to be used in the construction or interpretation thereof.
10. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the state of California, without giving
effect to any choice of law or conflicting provision or rule (whether
of the state of California or any other jurisdiction) that would cause
the laws of any jurisdiction other than the state of California to be
applied. In furtherance of the foregoing, the internal law of the state
of California will control the interpretation and construction of this
Agreement, even if under such jurisdiction's choice of law or conflict
of law analysis, the substantive law of some other jurisdiction would
ordinarily apply.
11. SEVERABILITY. It is the desire and intent of the parties hereto that
the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any
particular provision of this Agreement shall be adjudicated by a court
of competent jurisdiction to be invalid, prohibited or unenforceable
under any present or future law, and if the rights and obligations of
any party under this Agreement will not be materially and adversely
affected thereby, such provision, as to such jurisdiction, shall be
ineffective, without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such provision
in any other jurisdiction, and to this end the provisions of this
Agreement are declared to be severable; furthermore, in lieu of such
invalid or unenforceable provision there will be added automatically as
a part of this Agreement, a legal, valid and enforceable provision as
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similar in terms to such invalid or unenforceable provision as may be
possible. Notwithstanding the foregoing, if such provision could be
more narrowly drawn (as to geographic scope, period of duration or
otherwise) so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn,
without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction.
12. ENTIRE AGREEMENT. This Agreement, together with the Separation
Agreement, embodies the entire agreement of the parties hereto
respecting the matters within its scope. This Agreement supersedes all
prior and contemporaneous agreements of the parties hereto that
directly or indirectly bears upon the subject matter hereof. Any prior
negotiations, correspondence, agreements, proposals or understandings
relating to the subject matter hereof shall be deemed to have been
merged into this Agreement, and to the extent inconsistent herewith,
such negotiations, correspondence, agreements, proposals, or
understandings shall be deemed to be of no force or effect. There are
no representations, warranties, or agreements, whether express or
implied, or oral or written, with respect to the subject matter hereof,
except as expressly set forth herein. Notwithstanding the foregoing,
the Non-Competition Agreement between Executive and the Company entered
into on or about the date hereof is outside of the scope of the
integration provisions of this Section 12.
13. MODIFICATIONS. This Agreement may not be amended, modified or changed
(in whole or in part), except by a formal, definitive written agreement
expressly referring to this Agreement, which agreement is executed by
both of the parties hereto.
14. WAIVER. Neither the failure nor any delay on the part of a party to
exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any right, remedy, power or
privilege, nor shall any waiver of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is
signed by the party asserted to have granted such waiver.
15. ARBITRATION. Any controversy arising out of or relating to the
Consultant's engagement with the Company, including the termination of,
any condition of, or benefit with respect to, the Consultant's services
hereunder, the enforcement or interpretation of this Agreement, or
because of an alleged breach, default, or misrepresentation in
connection with any of the provisions of this Agreement, including
(without limitation) any state or federal statutory claims, shall be
submitted to arbitration in accordance with Section VII.I of the
Separation Agreement.
16. NOTICES.
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(a) All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed
to have been duly given and made if (i) delivered by hand, (ii)
otherwise delivered against receipt therefor, or (iii) sent by
registered or certified mail, postage prepaid, return receipt
requested. Any notice shall be duly addressed to the parties as
follows:
if to the Company, to:
c/o Country Life LLC
000 Xxxxxxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx
with a copy to:
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq. and Xxxx X.
Xxxxxxx, Esq.
if to the Consultant:
Xxxxx Xxxxxx
00 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
(b) Any party may alter the address to which communications or copies
are to be sent by giving written notice of such change of address in
conformity with the provisions of this Section 16 for the giving of
notice. Any communication shall be effective when delivered by hand,
when otherwise delivered against receipt therefor, or five (5) business
days after being mailed in accordance with the foregoing.
17. LEGAL COUNSEL; MUTUAL DRAFTING. Each party recognizes that this is a
legally binding contract and acknowledges and agrees that they have had
the opportunity to consult with legal counsel of their choice. Each
party has cooperated in the drafting, negotiation and preparation of
this Agreement. Hence, in any construction to be made of this
Agreement, the same shall not be construed against either party on the
basis of that party being the drafter of such language. The Consultant
agrees and acknowledges that she has read and understands this
Agreement, is entering into it freely and voluntarily, and has been
advised to seek counsel prior to entering into this Agreement and has
had ample opportunity to do so.
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original as against any
party whose signature appears thereon, and all of which together shall
constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected
hereon as the signatories. Photographic copies of such signed
counterparts may be used in lieu of the originals for any purpose.
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IN WITNESS WHEREOF, the Company and the Consultant have executed this
Agreement as of the date first set forth above.
"COMPANY"
Allergy Research Group, Inc.,
a Florida corporation
By: /s/ Xxxxxxx Xxxxxxx
------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
"CONSULTANT"
/s/ Xxxxx Xxxxxx
-----------------------------
Xxxxx Xxxxxx
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EXHIBIT C
ACKNOWLEDGEMENT AND WAIVER
I, Xxxxx Xxxxxx, hereby acknowledge that I was given 21 days
to consider the foregoing Employment Separation and General Release Agreement
and voluntarily chose to sign the Employment Separation and General Release
Agreement prior to the expiration of the 21-day period.
I declare under penalty of perjury under the laws of the state
of Florida that the foregoing is true and correct.
/s/ Xxxxx Xxxxxx
---------------------------
Xxxxx Xxxxxx
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