EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of
April 1, 2008, by and between InnerLight Holdings, Inc., a corporation organized
under the laws of the State of Deleware (hereafter referred to as "Employer")
and Xxxxx X. Xxxxxx, an individual (hereafter referred to as
"Employee").
In consideration of the mutual
covenants herein contained, and other good and valuable consideration, the
parties hereto agree as follows:
1. Employment.
(a) Employer hereby agrees
to employ Employee, and Employee agrees to serve as an employee of Employer or
as an employee of one or more of its subsidiaries, during the Period of
Employment, as defined in Section 2, in such executive capacity as is set forth
herein. During the Period of Employment, Employee also agrees to
serve as Chairman of the Board of Directors of Employer, as well as a member of
any committee of the Board of Directors of the Employer to which Employee may be
elected or appointed. Employer agrees to take the steps necessary to
facilitate the election of Employee to the Board of Directors of Employer as
soon as possible after the execution of this Agreement. At its
meeting held on the 1st day of April, 2008, the Board of Directors of Employer
elected Employee to the additional posts of President and Chief Executive
Officer of Employer effective as of the date of this Agreement. It is
the intention of the Board of Directors to reelect Employee to such positions
during the balance of the Period of Employment.
(b) If after the annual
meeting of the Board of Directors of Employer or at any time thereafter during
the Period of Employment, the Board of Directors fails, without Employee's
consent, to elect or reelect Employee as President and Chief Executive of
Employer and as a Director of Employer, or removes Employee from such offices or
directorship, or if at any time during the Period of Employment, Employee shall
fail to be vested by the Board of Directors of Employer with the power and
authority of President and Chief Executive Officer of Employer or Employee shall
lose any significant duties or responsibilities attending such offices, Employee
shall have the right by written notice to Employer to terminate his services
hereunder, effective as of the last day of the month of receipt of such notice,
in which event the Period of Employment, as hereinafter defined, shall so
terminate on such last day of the month; such termination under such
circumstances shall be deemed pursuant to paragraph (a) of Section 6 hereof as a
termination by Employer other than for material breach or just cause with all of
the consequences which flow from such termination.
2. Period of
Employment.
The "Period of Employment" shall be the
period commencing on the 1st day of April, 2008 and ending on the 31st day of
March, 2018, and the period of any extensions thereof in accordance with the
further provisions of this Section. The Period of Employment shall be
extended automatically without further action by either party for successive
one-year periods, not to exceed ten (10) such periods, beginning on the 1st day
of April, in the year 2018, and ending on the 31st day of March in the year
2028, unless either party shall have served written notice in accordance with
the provisions of Section 10 hereof upon the other party not less than sixty
(60) days prior to the 31st day of March in the year 2018, of its or his
intention that the Period of Employment under this Agreement shall
terminate.
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3. Duties During the Period of
Employment.
Employee shall devote his attention and
best efforts to the affairs of Employer and its subsidiaries during the Period
of Employment, provided,
however, that Employee may engage in other activities, such as activities
involving charitable, educational, religious and similar types of organizations,
speaking engagements, membership on the Board of Directors of other
organizations (as Employer may from time to time agree to), and similar type
activities to the extent that such other activities do not inhibit or prohibit
the performance of his duties under this Agreement, or conflict in any material
way with the business of Employer and its subsidiaries.
4. Current Cash
Compensation.
(a) Base Annual
Salary. Employer will pay to Employee during the Period of
Employment commencing on the 1st day of April, 2008 a base annual salary of
$300,000.00 payable in substantially equal bi-weekly installments during each
calendar year, or portion thereof, of the Period of Employment. It is agreed
that Employee will receive a minimum 20% increase in base salary every year
thereafter during the Period of Employment ending on the 31st day of March,
2018; provided,
however, it is agreed between the parties that the Employer shall review
annually, and in light of such review may, in the discretion of the Board of
Directors, increase further such base annual salary taking into account
Employee's then responsibilities, increase in the cost of living, increases in
compensation of other executives of Employer and its subsidiaries, increases in
salaries of executives of other corporations, performance by Employee, and other
pertinent factors.
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(b) Bonus. During
the Period of Employment, Employer, in its sole discretion, will xxxx Employee
an annual bonus based on his performance and other factors; provided, however, that
Employer will pay Employee a minimum annual bonus in respect of his services for
each calendar year of $60,000.00. If the Period of Employment should
terminate other than at the end of a calendar year, Employer will pay Employee
as his last bonus a minimum of that portion of $60,000.00 prorated over the
number of complete months of service during the last calendar year of service;
provided, however, that
the minimum bonus for 2008 shall be $60,000.00 regardless of whether the Period
of Employment shall terminate during 2008. While not being legally
required to pay any bonus in excess of the minimum bonus, Employer agrees to
take into account, in determining the amount of the annual bonus, the factors
described in paragraph (a) hereof. The bonus in respect of any
calendar year shall be paid on or before the 15th day of March of the succeeding
calendar year.
5. Other Employee
Benefits.
(a) Vacation and Sick
Leave. Employee shall be entitled to 6 weeks paid annual
vacation and to reasonable sick and personal leave.
(b) Regular Reimbursed Business
Expenses. Employer shall reimburse Employee for all expenses
and disbursements reasonably incurred by Employee in the performance of his
duties during the Period of Employment, and such other facilities or services as
Employer and Employee may, from time to time, agree are
reimbursable.
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(c) Life
Insurance. During the Period of Employment, Employer shall
procure and pay all premiums on a term life insurance policy, effective the date
of this Agreement, with a face value of at least $1,000,000.00 (less the amount
of group term insurance, if any, provided under an insurance plan maintained by
the Employer for its employees generally) for the benefit of a beneficiary
designated by Employee.
(d) Employer's Benefit Plans or
Arrangements. In addition to the cash compensation provided
for in Section 4 hereof, Employee, subject to meeting eligibility provision and
to the provisions of this Agreement, shall be entitled to participate in all
employee benefit plans of Employer, as presently in effect or as they may be
modified or added to by the Employer from time to time.
(e) Reimbursement for Temporary
and Incidental Expenses. In consideration of his acceptance of
employment pursuant to this Agreement, Employee expects to incur certain special
and temporary expenses for which Employer agrees to reimburse Employee, subject
to the further provisions of this paragraph (e), namely: (i) a
company car or reimbursement of personal automobile expenses, and (ii)
reasonable travel expenses to and from the City of Springville or its suburbs
which are incurred by Employee until the 31st day of March, 2018. Employee shall
furnish Employer with itemized vouchers and/or receipts covering such
expenses.
(f) Counsel
Fees. Employer shall pay, or reimburse to Employee, the
reasonable fees and expenses of Employee's personal counsel for professional
services rendered to Employee in connection with this Agreement and matters
related thereto.
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(g) Shortfall in Medical and
Dental Insurance Coverage. To the extent Employer does not
provide Employee with medical and dental insurance, Employer will pay any of
Employee's medical and dental expenses which otherwise would have been
covered. Payments made pursuant to this paragraph will be adjusted to
reflect any increase in income taxes required to be paid by Employee by reason
of receipt of such payments over the taxes Employee would have been required to
pay if the benefits had been derived from plans maintained by his previous
employer.
(h) Shortfall in Pension
Benefits. Employer shall pay to Employee (and to his spouse or
beneficiary, if the form of pension includes a continuing payment to his spouse
or beneficiary after his death) a supplemental pension equal to the difference
between (i) the pension Employee or his spouse or beneficiary would have
received under Employer's pension plan if Employee's years of service with his
previous employer had been taken into account and (ii) the aggregate of (A) the
pension actually payable under the Employer's plan and (B) the pension actually
payable under the previous employer's plan.
(l) Permanent
Disability.
If during the Period
of Employment, Employee shall become permanently disabled, Employer shall pay
Employee $200,000 for each year (and additional fractional portion thereof) from
the date of disability to the 31st day of March, 2018, less any amounts paid or
payable to Employee under any long-term disability plan or pension plan
maintained by the Employee pursuant to this paragraph shall be paid in
substantially equal monthly installments.
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For the purposes of this paragraph (1)
and this Agreement, "permanent disability" means inability to perform the
services of President and Chief Executive Officer of the Employer required
hereunder due to physical or mental disability which continues for one hundred
eighty (180) consecutive days in any period of twelve (12) months, and "date of
disability" means the day following the close of such 180-day
period. Evidence of such disability shall be certified by a physician
acceptable to both Employer and Employee. Evidence of such
disability, as so certified, shall be conclusive notwithstanding that a
disability policy, or clause in an insurance policy, covering Employee shall
contain a different definition of "permanent disability." If Employer
and Employee cannot agree on such a physician, or if Employee feels that he is
able to perform his duties hereunder, the question of whether Employee is
"permanently disabled," within the meaning of this Agreement, shall be submitted
to a panel of three (3) impartial and reputable physicians, one selected by
Employer, one selected by Employee and the third to be selected by the then
president of the Medical Society for Utah County, State of Utah. The
panel's determination of Employee's ability so to perform shall be binding on
the parties hereto.
For purposes of this Agreement, the
Period of Employment will be deemed to terminate on the day immediately
preceding the date of disability.
6. Termination.
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(a) Termination by Employer
other than for Material Breach of Just Cause; Voluntary
Terminations. If Employer should terminate the Period of
Employment for other than material breach or just cause, as herein defined, or
if Employee should voluntarily terminate the Period of Employment pursuant to
paragraph (b) of Section 1 or due to a breach of this Agreement by Employer, in
addition to all other benefits payable as provided for hereunder, Employer shall
forthwith pay to Employee in one lump sum the amounts otherwise payable to
Employee pursuant to paragraphs (a) and (b) of Section 4. Finally, the
restrictions on the shares of restricted stock will lapse immediately, and such
shares will become non-forfeitable. The foregoing provisions are
subject to the proviso that if the Period of Employment should terminate on or
after the 31st day of March, 2018, the payments and other benefits received
pursuant to this paragraph including shares of restricted stock with respect to
which the restrictions have already lapsed and shares of such stock with respect
to which such restrictions lapse by virtue of this paragraph, but excluding any
dividends with respect to shares of such restricted stock and the value of any
stock option granted pursuant to paragraph (b) of Section 5.
"Material breach" and "just cause"
shall mean willful misconduct in following the legitimate directions of the
Board of Directors'; excessive absenteeism not related to illness, sick leave or
vacations, but only after notice from the Board of Directors followed by a
repetition of such excessive absenteeism; or continuous conflicts of interest
after notice in writing from the Board of Directors.
(b) Resignation by
Employee. If during the Period of Employment, Employee shall
exercise his right of termination under paragraph (b) of Section 1, he shall
resign voluntarily as Director and as an employee of Employer upon the notice
set forth in such paragraph (b).
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8. Nondisclosure.
Employee shall not, at any time during
or following the Period of Employment, disclose, use, transfer or sell, except
in the course of employment with Employer, any confidential information or
proprietary data of Employer and its subsidiaries so long as such information or
proprietary data remains confidential and has not been disclosed or is not
otherwise in the public domain.
9. Notices.
All notices under this Agreement shall
be in writing and shall be deemed effective when delivered in person (in the
Employer's case, to its Secretary) or thirty-six (36) hours after deposit
thereof in the United States mails, postage prepaid, for delivery as registered
or certified mail -- addressed, in the case of Employee, to the Employee's
residential address, and in the case of Employer, to its corporate headquarters,
attention of the Secretary, or to such other address as Employee or Employer may
designate in writing at any time or from time to time to the other
party. In lieu of personal notice or notice by deposit in the United
States mail, a party may give notice by telegram or telex.
10. Representations and
Warranties of Employer.
Employer represents and warrants that
the execution of this Agreement has been duly authorized by resolution of its
Board of Directors, and that this Agreement constitutes a valid and binding
obligation of Employer in accordance with its terms.
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11. Miscellaneous.
This Agreement constitutes the entire
understanding between Employer and Employee relating to employment of Employee
by Employer and its subsidiaries and supersedes and cancels all prior written
and oral agreements and understandings with respect to the subject matter of
this Agreement. This Agreement may be amended but only by a
subsequent written agreement of the parties. This Agreement shall be
binding upon and shall inure to the benefit of Employee, his heirs, executors,
administrators and beneficiaries and to the benefit of Employer and its
successors.
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the year and day first above
written.
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By:___________________________
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Its:___________________________
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______________________________
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SIGNATURE
OF EMPLOYEE
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______________________________
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NAME
OF EMPLOYEE
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