EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (this “Agreement”) by and between NuZee, Inc., a
Nevada corporation (“Company”), and Xxxxxxxx Xxxxxxxxx (“Executive”) is entered into
effective as of August 15, 2017 (the “Effective Date”). Executive and Company shall be referred
to individually as a “Party” and collectively as the “Parties” within this Agreement.
WHEREAS, Company desires to employ Executive in an executive capacity and Executive
likewise desires to be employed by Company; and
WHEREAS, the Parties mutually desire to enter into this Agreement as of the Effective Date in
order to set forth the terms of Executive’s employment.
NOW, THEREFORE, in consideration of the mutual promises, covenants, representations,
obligations and agreements contained herein, and for other valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Parties agree as follows:
1. Term of Employment. The “Initial Term” of Executive’s employment hereunder shall
commence on the Effective Date of this Agreement, and shall continue thereafter until the first
(1st) anniversary of the Effective Date, unless earlier terminated in accordance with the terms of
this Agreement. After the expiration of the Initial Term, if not earlier terminated, this Agreement
shall automatically renew on each anniversary of the Effective Date for successive one (1) year
periods. Each such one (1) year renewal term shall be referred to as a “Renewal Term.” The
period that Executive is employed hereunder is referred to as the “Term” of this Agreement.
2. Executive’s Duties.
(a)
Positions. During the Term, Executive shall serve as President, Chief Executive
Officer, and Chief Financial Officer (and/or in such other positions as Company may designate
from time to time, which positions may involve providing services to Company’s direct or
indirect subsidiaries, as the Parties mutually may agree) with such duties and responsibilities as
may from time to time be assigned to him by Company, provided that such duties are at all times
consistent with the duties of such positions. Company and each entity which is owned (directly
or indirectly) or controlled by Company are referred to herein collectively as the “Company
Group.” Executive agrees to serve, without additional compensation, if elected or appointed to
the one or more offices or as a director of any member of the Company Group. Company and
Executive hereby agree that, at any time and from time to time, Company may cause any
member of the Company Group to be Executive’s employer, and, subject to Section 11, any such
change in Executive’s employer shall not alter the rights and obligations of the parties hereunder;
and
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Executive Employment Agreement
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(b)
Other Interests. Executive agrees, during the Term, to devote his full business
time, energy and best efforts to the business and affairs of the Company Group and not to
engage, directly or indirectly, in any other business or businesses, whether or not similar to that
of Company, except with the consent of the Board of Directors of Company (the “Board”).
Executive will be allowed to participate as a member of the board of directors for individual
portfolio companies controlled by the Company and as a member of the board of directors of any
non-profit organizations so long as such participation does not (i) materially impact Executive’s
ability to fulfill all of Executive’s duties for Company or (ii) create an actual or potential conflict
with the interests of Company. Notwithstanding the foregoing, Executive will be permitted to,
with the prior written consent of the Board (which consent can be withheld by the Board in its
discretion), act or serve as a director, trustee, committee member or principal of a for-profit
business organization.
3. Compensation.
(a)
Base Compensation. For services rendered by Executive under this Agreement,
Company shall pay to Executive a minimum base salary (“Base Compensation”) at the rate of
$180,000 per annum payable in accordance with Company’s customary payroll practice for its
senior executive officers, as in effect from time to time. The amount of Base Compensation shall
be reviewed periodically by the Board and may be increased from time to time as the Board may
deem appropriate. References in this Agreement to Base Compensation shall refer to
Executive’s Base Compensation as so increased from time to time. Base Compensation, as in
effect at any time, may not be decreased without the prior written consent of Executive.
(b)
Annual Bonus. In addition to his Base Compensation, Executive shall be eligible
to receive each year during the Term, a cash incentive payment (“Bonus”) in an amount
determined by the Board based on Executive’s individual performance, the performance of
Company and performance goals established by the Board. Except as otherwise stated expressly
in this Agreement, Executive must be employed with Company through December 31 of the
calendar year during which the Bonus is earned to receive any part of the Bonus payment.
(c)
Equity Compensation. During the Term, Executive shall be eligible to participate
in any equity compensation arrangement or plan, including but not limited to the NuZee, Inc.
2013 Stock Incentive Plan and any successor plans (as applicable, and as amended from time to
time, the “SIP”), offered by Company or any member of the Company Group to senior
executives on such terms and conditions as the Board shall determine in its sole discretion.
Except as provided herein, nothing herein shall be construed to give Executive any rights to any
amount or type of awards, or rights as an equityholder pursuant to any such plan, grant or award
except as provided in such award or grant to Executive provided in writing and authorized by the
Board.
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4. Other Benefits.
(a)
Business Expenses. Company shall reimburse Executive for all reasonable
business expenses incurred by Executive in the performance of his duties, which expenses will
be subject to the oversight of the Board of Directors, in the normal course of business and will be
compliant with the applicable reimbursement policy of Company. It is understood that
Executive is authorized to incur reasonable business expenses for promoting the business of
Company, including reasonable expenditures for travel, lodging, meals and client or business
associate entertainment. Request for reimbursement for such expenses must be accompanied by
appropriate documentation.
(b)
Standard Company Benefits. Executive shall be entitled to participate in all
employee benefit programs for which Executive is eligible under the terms and conditions of the
benefit plans that may be in effect from time to time. The Company reserves the right to cancel
or change the benefit plans or programs it offers to its employees at any time.
5. Termination and Effect on Compensation.
(a)
Resignation by Executive.
(i)
Executive may terminate his employment under this Agreement and resign
his position(s) with Company at any time, for any reason whatsoever, or
for no reason, in Executive’s sole discretion, by delivering a Notice of
Termination (defined in Section 0 below) providing thirty (30) days’
advance notice of termination (the “Notice Period”). In the event of such
termination, except as otherwise provided below, Executive shall not be
entitled to further compensation pursuant to this Agreement except: (A) as
may be provided by the terms of any benefit plans of Company or any
member of the Company Group in which Executive may be a participant,
and the terms of any outstanding equity-based awards, (B) for Base
Compensation accrued but unpaid through the Date of Termination
(defined in Section 5(f) below), and (C) reimbursement of business
expenses properly incurred but unreimbursed (to the extent reimbursable)
prior to the Date of Termination. Company retains the discretion to use or
decline use of Executive’s services through the Notice Period but retains
the obligation to pay Executive’s Base Compensation through the Notice
Period.
(ii)
Notwithstanding the provisions of Section 0, in the event that Executive
terminates this Agreement by resigning for Good Reason (defined below),
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in addition to all accrued but unpaid Base Compensation and payment for
the value of any accrued, unused paid time off then-existing as of the Date
of Termination, (A) Company shall pay Executive (x) an amount equal to
one and one-half times Executive’s Base Compensation, payable on
Company’s first regular pay date that is on or after the 60th day following
the Date of Termination and (y) an amount equal to one and one-half
times Executive’s bonus for the previous calendar year from the calendar
year in which the Date of Termination occurs, payable in four
substantially equal installments, with the first such installment paid on
Company’s first regular pay date that is on or after the 60th day following
the Date of Termination and the three remaining installments paid on the
last regular pay date of each of the three calendar quarters immediately
following the calendar quarter that includes the Date of Termination and
(B) for the period beginning on the Date of Termination and ending on the
date that is 18 months after the Date of Termination, Company shall
reimburse Executive for the premiums that Executive pays pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 and/or sections
601 through 608 of the Employee Retirement Income Security Act of
1974 (collectively, “COBRA”) to continue coverage in the health, dental
and vision insurance plans sponsored by Company in which Executive and
Executive’s dependents participated immediately prior to the Date of
Termination (each such premium being a “COBRA Premium”); provided,
however, that in order to receive a COBRA Premium reimbursement,
Executive must timely elect COBRA continuation coverage, pay the
applicable COBRA Premium and provide Company with evidence
satisfactory to Company of Executive’s having paid the COBRA Premium
within 30 days of having paid such COBRA Premium; provided, further,
however, that no COBRA Premium reimbursement shall be payable if
such reimbursement could reasonably be expected to subject Company or
any member of the Company Group to sanctions imposed pursuant to
Section 2716 of the Public Health Service Act and the related regulations
and guidance promulgated thereunder (collectively, including any
successor statute, the “PHSA”). Each COBRA Premium reimbursement
shall be provided to Executive by Company within 30 days of its receipt
of such evidence of the COBRA Premium payment; provided, further,
however, that Company shall have no obligation to provide Executive the
COBRA Premium reimbursement for any period in which Executive is
eligible to participate in a group medical plan sponsored by any other
employer. Executive agrees and understands that the payment of any
COBRA Premium will remain Executive’s sole responsibility.
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Executive Employment Agreement
Executive: Xxxxxxxx Xxxxxxxxx
Collectively, the payments provided under this Section shall be referred to
as the “Good Reason Separation Package.”
For purposes of this Agreement, “Good Reason” shall mean (1) the
material breach of any of Company’s obligations under this Agreement
without Executive’s written consent; (2) the change of Executive’s title or
the assignment to Executive of any duties that materially adversely alter
the nature or status of Executive’s office, title, and responsibilities,
including reporting responsibilities, or action by Company that results in
the material diminution of Executive’s position, duties or authorities, from
those in effect immediately prior to such change in title, assignment or
action, in each case, without Executive’s written consent; or (3) in the
event that Executive and Company cannot agree on a relocation package,
the relocation of Company’s principal executive offices, or Company’s
requiring Executive to relocate, anywhere outside San Diego County,
California, except for required travel on Company’s business to an extent
substantially consistent with Executive’s obligations under this
Agreement. To constitute Good Reason, Executive is required to provide
notice to Company of the existence of the conditions constituting Good
Reason within a period not to exceed ninety (90) days from the initial
existence of the condition and Company must be provided a period of at
least 30 days during which it may remedy the condition.
(b)
Death of Executive. If Executive dies during the term of this Agreement, in
addition to accrued but unpaid Base Compensation for services provided through the Date of
Termination and payment for the value of any accrued and unused paid time off then-existing as
of the Date of Termination for the fiscal year in which Executive dies, Company will be
obligated to continue for twelve (12) months after the Date of Termination (defined in Section
5(f) below) to pay the Base Compensation payments under Section 3(a) of this Agreement (such
continuation payments are referred to herein as the “Death Benefit Package”). Company may
thereafter terminate this Agreement without additional compensation to Executive’s estate except
to the extent this Agreement or any plan or arrangement of Company provides for vested benefits
or continuation of benefits beyond termination of Executive’s employment.
(c)
Disability of Executive. If Executive shall have been absent from the full-time
performance of Executive’s duties with Company for 180 business days during any twelve-
month period as a result of Executive’s incapacity due to accident, physical or mental illness, or
other circumstance which renders him mentally or physically incapable of performing the duties
and services required of him hereunder on a full-time basis as determined by Executive’s
physician (“Disability”), Executive’s employment may be terminated by Company for Disability.
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Executive Employment Agreement
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If Executive’s employment is terminated for Disability, in addition to accrued but unpaid Base
Compensation and payment for the value of any accrued, unused paid time off then-existing as of
the Date of Termination, Executive shall be eligible to receive the Without Cause Separation
Package defined in Section 5(d)(i).
(d)
Other Terminations.
(i)
By Company for Reason Other Than Cause. Company may terminate this
Agreement and Executive’s employment for any reason whatsoever, or for
no reason, in Company’s sole discretion by providing a Notice of
Termination (as defined in Section 0 below). For purposes of this
Agreement, acceptance by Company of Executive’s resignation upon
Company’s request or by mutual agreement shall be deemed to be a
termination by Company according to this Section 5(d)(i). In the event
that Executive’s employment is terminated by Company for any reason
other than Cause (defined in Section 5(d)(ii) below) and not due to
Executive’s death or Disability, then in addition to any compensation or
benefits to which Executive may be entitled through the Date of
Termination (as defined in Section 5(f) below) and payment for the value
of any accrued, unused paid time off then-existing as of the Date of
Termination, (A) Company shall pay Executive (x) a lump sum equal to
one and one-half times Executive’s Base Compensation, payable on
Company’s first regular pay date that is on or after the 60th day following
the Date of Termination and (y) an amount equal to one and one-half
times Executive’s bonus for the previous calendar year from the calendar
year year in which the Date of Termination occurs, payable in four
substantially equal installments, with the first such installment paid on
Company’s first regular pay date that is on or after the 60th day following
the Date of Termination and the three remaining installments paid on the
last business day of each of the three calendar quarters immediately
following the calendar quarter that includes the Date of Termination and
(B) for the period beginning on the Date of Termination and ending on the
date that is 18 months after the Date of Termination, Company shall
reimburse Executive for the COBRA Premium (as defined above);
provided, however, that in order to receive a COBRA Premium
reimbursement, Executive must timely elect COBRA continuation
coverage, pay the applicable COBRA Premium and provide Company
with evidence satisfactory to Company of Executive’s having paid the
COBRA Premium within 30 days of having paid such COBRA Premium;
provided, further, however, that no COBRA Premium reimbursement shall
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Executive Employment Agreement
Executive: Xxxxxxxx Xxxxxxxxx
be payable if such reimbursement could reasonably be expected to subject
Company or any member of the Company Group to sanctions imposed
pursuant to Section 2716 of the PHSA. Each COBRA Premium
reimbursement shall be provided to Executive by Company within 30 days
of its receipt of such evidence of the COBRA Premium payment;
provided, further, however, that Company shall have no obligation to
provide Executive the COBRA Premium reimbursement for any period in
which Executive is eligible to participate in a group medical plan
sponsored by any other employer. Executive agrees and understands that
the payment of any COBRA Premium will remain Executive’s sole
responsibility. Collectively, the payments made under this Section shall be
referred to as the “Without Cause Separation Package.”
(ii)
By Company for Cause. Company may terminate this Agreement and
Executive’s employment at any time for Cause. Notwithstanding the
foregoing provisions of this Section 5, in the event Executive’s
employment is terminated because of Cause, Company shall have no
obligations pursuant to this Agreement after the Date of Termination other
than for Base Compensation accrued but unpaid through the Date of
Termination (defined by Section 5(f) below) and reimbursement of
business expenses properly incurred but unreimbursed (to the extent
reimbursable) prior to Date of Termination. For purposes herein, “Cause”
means (A) Executive’s gross negligence, gross neglect or willful
misconduct in the performance of the duties required hereunder that
results in a material adverse effect on Company, (B) Executive’s
conviction for, deferred adjudication of, or plea of no contest or nolo
contendere to a felony, or (C) Executive’s material breach of any material
provision of this Agreement. Notwithstanding the foregoing, prior to any
termination for Cause under clauses (A) or (C) of the preceding sentence,
(X) Company must provide Executive with reasonable notice of not less
than ten (10) business days detailing the failure or conduct on which the
termination is to be based, (Y) Company must provide Executive a
reasonable opportunity to cure such failure or conduct, and (Z) after such
notice and an opportunity to cure, the Board must reasonably determine
that Executive has not cured such failure or conduct. Executive shall not
be deemed to have been terminated for Cause unless and until Executive
has been provided an opportunity to be heard in person by the Board (with
the assistance of Executive’s counsel if Executive so desires) on at least
five business days’ advance notice, and the Board must unanimously
approve the termination of Executive for Cause.
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Executive Employment Agreement
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(iii) After a Change in Control. If Executive terminates his employment with
Good Reason or Company terminates Executive’s employment without
Cause (and not due to Executive’s death or Disability) within twelve (12)
months following a Change in Control (as defined below), then in addition
to any compensation or benefits to which Executive may be entitled
through the Date of Termination (as defined in Section 5(f) and payment
for the value of any accrued, unused paid time off then-existing as of the
Date of Termination, and in lieu of the Without Cause Separation Package
or Good Reason Separation Package to which Executive would otherwise
be entitled pursuant to Section 5(d)(i) or Section 5(a)(ii), (A) Company
shall pay Executive (x) a lump sum equal to two times Executive’s Base
Compensation, payable on Company’s first regular pay date that is on or
after the 60th day following the Date of Termination and (y) an amount
equal to two times the bonus for the previous calendar year from the
calendar year in which the Date of Termination occurs, payable in four
substantially equal installments with the first such installment paid on
Company’s first regular pay date that is on or after the 60th day following
the Date of Termination and the three remaining installments paid in each
of the three calendar quarters immediately following the calendar quarter
that includes the Date of Termination and (B) for the period beginning on
the Date of Termination and ending on the date that is 18 months after the
Date of Termination, Company shall reimburse Executive for the COBRA
Premium; provided, however, that in order to receive a COBRA Premium
reimbursement, Executive must timely elect COBRA continuation
coverage, pay the applicable COBRA Premium and provide Company
with evidence satisfactory to Company of Executive’s having paid the
COBRA Premium within 30 days of having paid such COBRA Premium;
provided, further, however, that no COBRA Premium reimbursement shall
be payable if such reimbursement could reasonably be expected to subject
Company or any member of the Company Group to sanctions imposed
pursuant to Section 2716 of the PHSA. Each COBRA Premium
reimbursement shall be provided to Executive by Company within 30 days
of its receipt of such evidence of the COBRA Premium payment;
provided, further, however, that Company shall have no obligation to
provide Executive the COBRA Premium reimbursement for any period in
which Executive is eligible to participate in a group medical plan
sponsored by any other employer. Executive agrees and understands that
the payment of any COBRA Premium will remain Executive’s sole
responsibility. Collectively, the payments made under this Section shall
be referred to as the “CIC Separation Package.” For the avoidance of
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Executive Employment Agreement
Executive: Xxxxxxxx Xxxxxxxxx
doubt, if Executive’s employment is not terminated by Executive with
Good Reason or by Company without Cause (and not due to Executive’s
death or Disability) within twelve (12) months following a Change in
Control, then Executive shall no longer be eligible to receive the CIC
Separation Package with respect to such Change in Control but shall
remain eligible to receive the Without Cause Separation Package or Good
Reason Separation Package pursuant to Section 5(d)(i) or Section 5(a)(ii)
or, if in the future Executive’s employment is terminated by Executive
with Good Reason or by Company without Cause (and not due to
Executive’s death or Disability) within twelve (12) months following the
occurrence of a subsequent Change in Control, Executive shall again be
eligible to receive the CIC Separation Package.
For purposes of this Agreement, the term “Change in Control” means,
following the Effective Date, the occurrence of any of the following
events: (A) a sale, transfer, disposition or other transaction in which the
beneficial owners (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934), directly or indirectly, of the total voting
power of the Common Stock of Company immediately prior to such
transaction shall cease to be the beneficial owners, directly or indirectly,
of at least 50% of the total voting power of Common Stock of Company
immediately after such transaction; (B) the stockholders of Company
approve a plan of complete liquidation or dissolution of Company; or (C)
there is consummated in one or more transactions an agreement for the
sale or disposition by Company of all or substantially all of Company’s
consolidated assets, other than any such sale or disposition of assets
immediately following which the individuals who comprise the Board
immediately prior thereto (or individuals who are elected to the Board
with the affirmative vote of a majority of the individuals who comprise the
Board immediately prior thereto) constitute at least a majority of the board
of directors of (1) any parent of the entity to which such assets are sold or
disposed, or (2) if there is no such parent, such entity.
(e)
Notice of Termination. Any purported termination of Executive’s employment by
Company or by Executive and any purported termination of this Agreement shall be
communicated by written notice of termination (“Notice of Termination”) to the other Party
hereto in accordance with Section 9 hereof. Notice of Termination shall include the effective
Date of Termination (defined in Section 5(f)) of this Agreement. Any Notice of Termination
shall be deemed to also be Executive’s resignation as director and/or officer of any member of
the Company Group. Executive agrees to execute any and all documentation of such
resignations upon request by Company, but he shall be treated for all purposes as having so
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resigned upon the Date of Termination, regardless of when or whether he executes any such
documentation.
(f)
Date of Termination. “Date of Termination” shall mean in the case of
Executive’s death, his date of death, and in all other cases, the date specified in the Notice of
Termination as the effective date on which this Agreement shall be terminated, provided that the
Date of Termination shall occur on the date on which Executive incurs a “separation from
service” within the meaning of Section 409A if such date is different than the date specified in
the Notice of Termination.
(g)
No Duty to Mitigate. Executive shall not be required to mitigate the amount of
any payment or benefit provided for in this Agreement by seeking other employment or
otherwise, nor, shall the amount of any payment or benefit provided for in this Agreement be
reduced by any compensation or benefit earned by Executive as a result of employment by
another employer, self-employment earnings, by retirement benefits, by offset against any
amount claimed to be owing by Executive to Company, or otherwise.
(h)
Reimbursements for Expenses. Company shall reimburse Executive for business
expenses properly incurred prior to the Date of Termination, regardless of the circumstances of
termination, and in accordance with Company’s reimbursement policy.
(i)
Release. Notwithstanding any other provision in this Agreement to the contrary,
Executive shall be eligible to receive the Good Reason Separation Package, the Without Cause
Separation Package, the CIC Separation Package, or the Death Benefit Package payments
pursuant to Section 5(b) (each referred to individually as a “Separation Package”) only if
Executive (or, following Executive’s death, Executive’s estate) has executed and not revoked a
release of all claims in a form acceptable to Company (the “Release”), which Release shall
release Company, each member of the Company Group and their respective affiliates, and the
foregoing entities’ respective shareholders, members, partners, officers, managers, directors,
fiduciaries, employees, representatives, agents and benefit plans (and fiduciaries of such plans)
(collectively referred to as the “Released Parties”) from any and all claims, including any and all
causes of action arising out of Executive’s employment with Company, any member of the
Company Group or any of their respective affiliates or the termination of such employment, but
excluding all claims to any Separation Package (or portion thereof) that Executive may have, any
claims with respect to any vested benefits, indemnification rights Executive had for any actions
or omissions occurring while employed by Company, any claims Executive may have for
worker’s compensation benefits, and any other claims against any third party not included
amongst the Released Parties. To be entitled to receive a Separation Package, the time period
during which Executive can revoke the Release must expire before the sixtieth (60th) day after
the Date of Termination. Unless and until Executive has executed and not revoked a Release and
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the time period during which Executive can revoke the Release has expired, Executive shall have
no right to receive a Separation Package. If Executive has not executed without revoking a
Release and the time period during which Executive can revoke the Release has not expired
before the sixtieth (60th) day after the Date of Termination, Executive shall immediately forfeit
his rights to a Separation Package. For purposes of this Section 5(i), the term “Executive” shall
include Executive’s estate, in the event of Executive’s death.
(j)
Compliance with Section 409A. It is the intention of both Company and
Executive that the benefits and rights to which Executive could be entitled pursuant to this
Agreement comply with Section 409A of the Internal Revenue Code (the “Code”) and the
Treasury Regulations and other guidance promulgated or issued thereunder (hereinafter, “Section
409A”), to the extent that the requirements of Section 409A are applicable thereto, and the
provisions of this Agreement shall be construed in a manner consistent with that intention. If
any benefits or rights constitute “nonqualified deferred compensation” under Section 409A, then
the nonqualified deferred compensation shall be subject to the following additional requirements,
if and to the extent required to comply with Section 409A:
(i)
Neither Company nor Executive, individually or in combination, may
accelerate any payment or benefit that is subject to Section 409A, except
in compliance with Section 409A and the provisions of this Agreement,
and no amount that is subject to Section 409A shall be paid prior to the
earliest date on which it may be paid without violating Section 409A.
(ii)
For purposes of the foregoing, the terms used within this Section 5(j) have
the same meanings as those terms have for purposes of Section 409A, and
the limitations set forth herein shall be applied in such manner (and only
to the extent) as shall be necessary to comply with any requirements of
Section 409A that are applicable to the deferred compensation.
(iii) For purposes of applying the provisions of Section 409A to this
Agreement, and to the extent permissible under Section 409A, each
installment payment and each separately identified amount to which
Executive is entitled under this Agreement shall, in each case, be treated
as a separate payment.
(iv)
Any reimbursements by Company to Executive of any eligible expenses
under this Agreement that are not excludable from Executive’s income for
Federal income tax purposes (the “Taxable Reimbursements”) shall be
made by no later than the last day of Executive’s taxable year immediately
following the year in which the expense was incurred. The amount of any
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Taxable Reimbursements, and the value of any in-kind benefits to be
provided to Executive, during any taxable year of Executive shall not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year of Executive. The right to Taxable
Reimbursement, or in-kind benefits, shall not be subject to liquidation or
exchange for another benefit.
(v)
If Executive or Company believes, at any time, that any such benefit or
right that is subject to Section 409A does not so comply, the concerned
Party shall promptly advise the other and both Parties shall negotiate
reasonably and in good faith to amend the terms of such benefits and
rights such that they comply with Section 409A (with the most limited
possible economic effect on Executive and on Company).
Notwithstanding the foregoing, Company makes no representations that
the payments and benefits provided under this Agreement comply with
Section 409A and in no event shall Company be liable for all or any
portion of the taxes, penalties, interest or other expenses that may be
incurred by Executive on account of non-compliance with Section 409A.
6. Confidentiality.
(a)
General. The Parties acknowledge that during the Term, Company shall disclose
to Executive or provide Executive with access to trade secrets or confidential information of
Company or the other members of the Company Group, and Company may place Executive in a
position to develop business goodwill on behalf of Company or the members of the Company
Group or entrust Executive with business opportunities of Company or the members of the
Company Group. As a condition of Executive’s receipt of Confidential Information and
employment hereunder, and in order to protect the trade secrets and Confidential Information of
Company and the other members of the Company Group that have been and will in the future be
disclosed or entrusted to Executive, the business goodwill of Company and the other members of
the Company Group that have been and will in the future be developed in Executive, or the
business opportunities that have been and will in the future be disclosed or entrusted to
Executive by Company and the other members of the Company Group.
(b)
Confidential Information; Unauthorized Disclosure. Executive shall not, whether
during the period of his employment hereunder or thereafter, without the written consent of the
Board or a person authorized thereby, disclose to any person, other than an executive of
Company or a person to whom disclosure is reasonably necessary or appropriate in connection
with the performance by Executive of his duties as an executive of Company, any Confidential
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Information obtained by him while in the employ of Company with respect to Company’s
business. Subject to the exclusions below, as used in this Agreement “Confidential Information”
means data or information in any form, regardless of whether or not marked “confidential” or
“proprietary” (1) which concerns, relates to, or comes from the business activities, business
methods, products, services, relationships, research, or business development of Company or
another member of the Company Group; (2) which Executive received, designed, compiled,
produced, used, generated or otherwise became aware of as a result of his employment or
engagement with Company or any other member of the Company Group; and (3) which is not
generally known to the public. The parties agree that “Confidential
Information” specifically includes, but is not limited to, trade secrets (as defined by California
and federal law) of Company or another member of the Company Group and the following kinds
of information and data (to the extent not generally known to the public): (i) information about
the customers and prospective customers (such as customer and prospective customer identities,
contact information, preferences, needs, requirements, specifications, proposals, contracts,
financial information, and historic purchasing patterns, and information about Company’s or its
Affiliates’ provision of products and services to each customer) of Company or another member
of the Company Group; (ii) non-public information about the products and service techniques of
Company or any other member of the Company Group; (iii) the computer systems and software
developed by Company or another member of the Company Group or their respective agents for
use by of Company or another member of the Company Group; (iv) non-public information
about the business methods (such as sales methods, business processes, training manuals and
methods, research and development work, purchasing information and contracts, and new ideas
made or conceived by employees or agents) of Company or another member of the Company
Group; (v) financial information (such as pricing and bidding formulas, financial projections,
budgets, analyses, accounting data, and financing information) of Company or another member
of the Company Group; (vi) information about the business plans and strategies (such as
marketing plans, opportunities for new or developing business, products, services, or markets,
and information about new business partnerships or distributorship arrangements) of Company
or another member of the Company Group; (vii) private personnel information (including
employee social security numbers and medical records); (viii) communications between
Company or other members of the Company Group and their respective attorneys; (ix)
information provided to Company or another member of the Company Group with an
expectation of confidentiality or which is subject to non-disclosure obligations (such as
information shared in confidence by a customer or supplier); and (x) information marked
“confidential” or “proprietary” by Company or another member of the Company Group.
“Confidential Information” does not include general knowledge and skills used throughout the
energy industry or any information which Executive may be required to disclose by any
applicable law, order, or judicial or administrative proceeding. In no event shall an asserted
violation of the provisions of this Section constitute a basis for deferring or withholding any
amounts payable to Executive under this Agreement. Within fourteen (14) days after the
termination of Executive’s employment for any reason, Executive shall return to Company all
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documents and other tangible items containing Company or other Company Group information
which are in Executive’s possession, custody or control. Executive agrees that all Confidential
Information exclusively belongs to Company, the other members of the Company Group or their
designated affiliate, and that any work of authorship relating to Company’s business, products or
services, whether such work is created solely by Executive or jointly with others, and whether or
not such work is Confidential Information, shall be deemed exclusively belonging to Company,
the other members of the Company Group or their designated affiliate.
(c)
Permitted Disclosures. Nothing in this Agreement shall prohibit or restrict
Executive from lawfully (i) initiating communications directly with, cooperating with, providing
information to, causing information to be provided to, or otherwise assisting in an investigation
by any governmental or regulatory agency, entity, or official(s) (collectively, “Governmental
Authorities”) regarding a possible violation of any law; (ii) responding to any inquiry or legal
process directed to Executive individually from any such Governmental Authorities; (iii)
testifying, participating or otherwise assisting in an action or proceeding by any such
Governmental Authorities relating to a possible violation of law; or (iv) making any other
disclosures that are protected under the whistleblower provisions of any applicable law.
Additionally, pursuant to the federal Defend Trade Secrets Act of 2016, Executive shall not be
held criminally or civilly liable under any federal or state trade secret law for the disclosure of a
trade secret that: (x) is made (A) in confidence to a federal, state, or local government official,
either directly or indirectly, or to an attorney; and (B) solely for the purpose of reporting or
investigating a suspected violation of law; or (y) is made to Executive’s attorney in relation to a
lawsuit for retaliation against Executive for reporting a suspected violation of law; or (z) is made
in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made
under seal. Nothing in this Agreement requires Executive to obtain prior authorization from
Company before engaging in any conduct described in this paragraph, or to notify Company that
Executive has engaged in any such conduct.
(d)
Remedies. In the event of a breach or threatened breach by Executive of any of
the provisions of this Section 6, Executive acknowledges that money damages would not be
sufficient remedy, and Company and the other members of the Company Group shall be entitled
to specific performance, injunction and such other equitable relief as may be necessary or
desirable to enforce the restrictions contained herein. Such remedies are not exclusive, and
nothing herein contained shall be construed as prohibiting Company or the other members of the
Company Group from pursuing any other remedies available for such breach or threatened
breach or any other breach of this Agreement.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s
continuing or future participation in any benefit, bonus, incentive or other plan or program
provided by Company or any member of the Company Group and for which Executive may
qualify, nor shall anything herein limit or otherwise adversely affect such rights as Executive
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may have under any stock option or other agreements with Company or any member of the
Company Group.
8. Non-assignability by Executive. The obligations of Executive hereunder are personal and
may not be assigned or delegated by him or transferred in any manner whatsoever, nor are such
obligations subject to involuntary alienation, assignment or transfer, except by will or the laws of
descent and distribution.
9. Notice. Any consent, notice or report required or permitted to be given or made under this
Agreement by one of the Parties hereto to the other shall be in writing and delivered to each
Party or emailed to the address set forth below (or to such other email address or address as the
recipient of any notice shall have notified the other in writing). All such notices and
communications shall be effective (a) when sent by Federal Express or other overnight service of
recognized standing, on the Business Day following the deposit with such service; (b) when
mailed, by registered or certified mail, first class postage prepaid and addressed as aforesaid
through the United States Postal Service, upon receipt; (c) when delivered by hand, upon
delivery; and (d) when emailed, upon confirmation of receipt.
If to Company:
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxxxx 00000
Tel. (000) 000-0000
with a copy (which shall
Xxxxxx Hall, LLP
not constitute notice) to:
Attn: Xxxxx X. Xxxxxxx, Esq.
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Tel. (000) 000-0000
Email. Xxxxx@xxxxxxxxxx.xxx
If to Executive:
Masa personal address
Tel.:
Email:
10. Validity. The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement, which shall remain
in full force and effect.
11. Successors and Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of Company and any successor of Company (whether direct or indirect, by purchase,
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merger, consolidation or otherwise), and this Agreement shall inure to the benefit of and be
enforceable by Executive’s legal representatives. Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of Company to assume expressly and agree to perform this Agreement
in the same manner and to the same extent that Company would be required to perform it if no
such succession had taken place. As used in this Agreement, “Company” shall mean Company as
hereinbefore defined and any successor by operation of law or otherwise and any successor to its
business and/or assets as aforesaid which assumes this Agreement.
12. Indemnification. Company shall defend and indemnify Executive to the fullest extent
allowed by law, and to provide him with coverage under any directors’ and officers’ liability
insurance policies, in each case on terms not less favorable than those provided to any of its other
directors and officers as in effect from time to time. In the event of any inconsistency or conflict
between the provisions in this Section 12 and any provision in any other indemnity agreement or
other agreement between the Parties, the provision in such other agreement shall control.
13. Withholding; Deductions. Anything to the contrary notwithstanding, all payments required
to be made by Company hereunder to Executive, his estate or beneficiaries, shall be subject to
withholding of such amounts relating to all federal, state, local and other taxes as Company may
reasonably determine it should withhold pursuant to any applicable law or regulation and any
deductions consented to in writing by Executive. In lieu of withholding such amounts in whole
or in part, Company may, in its sole discretion, accept other provisions for payment of taxes as
required by law, provided Company is satisfied that all requirements of law affecting its
responsibilities to withhold such taxes have been satisfied.
14. Waiver and Modification. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by
Executive and such officer as may be specifically authorized by Company. No waiver by either
Party hereto at any time of any breach by the other Party hereto of, or in compliance with, any
condition or provision of this Agreement to be performed by such other Party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time.
15. Governing Law and Choice of Venue. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California, without regard to the principles
of conflicts of law thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by this Agreement
(whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced exclusively in courts sitting in San
Diego County, California. Each party hereto hereby irrevocably submits to the exclusive
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jurisdiction of the courts sitting in the San Diego County, California for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. If either party shall
commence an action or proceeding to enforce any provisions of this Agreement, then the
prevailing party in such action or proceeding shall be reimbursed by the other party for its
attorney’s fees and other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.
16. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the
same instrument.
17. Entire Agreement. Except as provided in the written benefit plans and programs and
agreements of Company in effect during the Term, this Agreement is an integration of the
Parties’ agreement; no agreement or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either Party which are not set forth
expressly in this Agreement; and, except as expressly stated herein, this Agreement contains the
entire understanding of the Parties in respect of the subject matter and supersedes and replaces in
full all prior written or oral agreements and understandings between the Parties with respect to
such subject matters. Without limiting the scope of the preceding sentence, all prior
understandings and agreements among the Parties hereto relating to the subject matter hereof are
hereby null and void and of no further force and effect. Notwithstanding the foregoing, the
Parties acknowledge and agree that the provisions regarding non-disclosure herein (including
such provisions in Section 6 above) complement and are in addition to (and do not replace or
supersede) all obligations that Executive has to Company, any member of the Company Group
or any of their respective affiliates with respect to confidentiality and non-disclosure as set forth
in any other written agreement and as exist at common law.
18. Representation by Executive. Executive hereby represents and warrants to Company that,
as of the Effective Date, he is not party to any employment or other agreement or obligation with
or to any third party which would preclude him from employment with Company and performing
his obligations under this Agreement.
19. Severability. If a court of competent jurisdiction determines that any provision of this
Agreement (or part thereof) is invalid or unenforceable, then the invalidity or unenforceability of
that provision (or part thereof) shall not affect the validity or enforceability of any other
provision (or part thereof) of this Agreement and all other provisions (and parts thereof) shall
remain in full force and effect.
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20. Headings. The paragraph headings have been inserted for purposes of convenience and
shall not be used for interpretive purposes.
21. Gender and Plurals; Interpretation. Wherever the context so requires, the masculine gender
includes the feminine or neuter, and the singular number includes the plural and conversely.
Titles and headings to Sections hereof are for the purpose of reference only and shall in no way
limit, define or otherwise affect the provisions hereof. Any and all Exhibits, or unless the
context requires otherwise, all references herein to an agreement, instrument or other document
shall be deemed to refer to such agreement, instrument or other document as amended,
supplemented, modified and restated from time to time to the extent permitted by the provisions
thereof. All references to “dollars” or “$” in this Agreement refer to United States dollars. The
words “herein”, “hereof”, “hereunder” and other compounds of the word “here” shall refer to the
entire Agreement and not to any particular provision hereof. Wherever the context so requires,
the masculine gender includes the feminine or neuter, and the singular number includes the
plural and conversely. The word “or” as used herein is not exclusive. All references to
“including,” “includes” or “include” shall be construed as meaning “including without
limitation.”
22. Third-Party Beneficiaries. Each member of the Company Group that is not a signatory
hereto shall be a third-party beneficiary of Executive’s representations, covenants, and
commitments set forth in Sections 2, 6 and 17 hereto and shall be entitled to enforce such
representations, covenants and commitments as if a party hereto.
23. Certain Excise Taxes. Notwithstanding anything to the contrary in this Agreement, if
Executive is a “disqualified individual” (as defined in Section 280G(c) of the Code), and the
payments and benefits provided for in this Agreement, together with any other payments and
benefits which Executive has the right to receive from Company, any member of the Company
Group or any of their respective affiliates, would constitute a “parachute payment” (as defined in
Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement
shall be either (i) reduced (but not below zero) so that the present value of such total amounts
and benefits received by Executive from Company, any member of the Company Group or any
of their respective affiliates shall be one dollar ($1.00) less than three times Executive’s “base
amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts
and benefits received by Executive shall be subject to the excise tax imposed by Section 4999 of
the Code or (ii) paid in full, whichever produces the better net after-tax position to Executive
(taking into account any applicable excise tax under Section 4999 of the Code and any other
applicable taxes). The reduction of payments and benefits hereunder, if applicable, shall be
made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which
such payment or benefit would be paid or provided (beginning with such payment or benefit that
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would be made last in time and continuing, to the extent necessary, through to such payment or
benefit that would be made first in time) and, then, reducing any benefit to be provided in-kind
hereunder in a similar order. The determination as to whether any such reduction in the amount
of the payments and benefits provided hereunder is necessary shall be made by Company in
good faith. If a reduced payment or benefit is made or provided and through error or otherwise
that payment or benefit, when aggregated with other payments and benefits from Company, any
member of the Company Group or any of their respective affiliates used in determining if a
“parachute payment” exists, exceeds one dollar ($1.00) less than three times Executive’s base
amount, then Executive shall immediately repay such excess to Company upon notification that
an overpayment has been made. Nothing in this Section 22 shall require Company to be
responsible for, or have any liability or obligation with respect to, Executive’s excise tax
liabilities under Section 4999 of the Code.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the Effective
Date.
NUZEE, INC.
By:
/s/ Xxxxxxxx Xxxxxxxxx, President
Xxxxxxxx Xxxxxxxxx, President
EXECUTIVE
/s/ Xxxxxxxx Xxxxxxxxx, President
Xxxxxxxx Xxxxxxxxx
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