SEPARATION AND SEVERANCE AGREEMENT
Exhibit 99.2
THIS SEPARATION AND SEVERANCE
AGREEMENT (the “Agreement”) is entered into as of the 20th day
of January, 2010 by and between Celsius Holdings, Inc, a Nevada corporation (the
“Company”), and Jan A. Norelid (the “Employee”).
Recitals
WHEREAS, the Employee has been
employed by the Company pursuant to the terms of an Employment Agreement dated
December 15, 2009 by and between the Company and the Employee (the “Employment
Agreement”); and
WHEREAS, the Company and the
Employee have mutually agreed that the Employment Agreement, and the Employee’s
employment with the Company and its Affiliates (as defined below), shall
terminate on at a date to be decided upon by the Employee or the Company as
provided below (the “Termination Date”); and
WHEREAS, the Employee has
agreed to continue to work for the Company in a lesser position than currently
employed to facilitate the transfer of the Employee’s duties to a new CFO and/or
to other employees of the Company; and
WHEREAS, the Company and the
Employee now wish to set forth in this Agreement all of their respective rights
and obligations resulting from such termination of employment and the
termination of the Employment Agreement.
NOW, THEREFORE, in
consideration of the mutual promises and covenants between the parties, the
sufficiency of which is hereby acknowledged, the Company and Employee hereby
agree to the following Terms and Conditions:
Terms and
Conditions
1. Recitals. All
of the foregoing Recitals are true and correct and are incorporated as part of
these Terms and Conditions.
2. Termination
of Employment Agreement. The Company and the Employee each
acknowledge and agree that the Employee’s employment with the Company and its
Affiliates shall terminate as of the Termination Date, and that the Employment
Agreement shall terminate and be of no further force and effect as of the
Termination Date. For purposes of this Agreement, the term
“Affiliate” includes all of the Company’s direct and indirect subsidiaries and
any other entities that directly or indirectly, through one or more
intermediaries, control, are controlled by or are under common control with the
Company.
(a) Until the
Termination Date, the Employee shall continue to be employed as Assistant to the
Chief Financial Officer for Celsius, Inc, a subsidiary of Celsius Holdings,
Inc. Employee’s primary responsibilities shall be fulfilling the
requests of the Company’s Chief Financial Officer. Performance of
Employee’s responsibilities, shall not include any policy making functions and
shall at all times be subject to oversight, supervision and final approval by
Company’s executive officers, including without limitation the Company’s Chief
Employee Officer, President and Chief Financial
Officer. Notwithstanding any contrary provision, Employee shall not
be deemed an employee of Celsius Holdings, Inc., and shall not be in charge of a
principal business unit, division or function or perform policy-making functions
for Celsius Holdings, Inc.
(b) The
“Termination Date” will be a future date mutually agreed to by Employee and the
Company; provided, that either party may set the Termination Date upon 5 days
written notice to the other party.
3. Payments
Pursuant to the Employment Agreement. Through the Termination Date and
subject to applicable employment and withholding taxes, Employee shall receive
the payments to which he is entitled pursuant to the Employment Agreement,
consisting of his Base Salary (as that term is defined in Section 3.1 of
the Employment Agreement), payable at such time and in such manner as provided
in this Agreement. The Employee shall also be entitled to expense reimbursement
and other benefits provided in Sections 4.1-4.4 of the Employment Agreement
through the Termination Date and to the remaining unused vacation days which
shall continue to accrue, as provided in Section 4.6 of the Employment
Agreement, until the Termination Date. The Company will, prior to
the
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Termination
Date, upon reasonable advance notice and at reasonable times, allow the Employee
time to seek his subsequent employment, provided that such search does not
unreasonably interfere with the performance of his duties
hereunder.
Upon the
Company’s successful completion of the currently planned secondary public
offering (the “Secondary Offering”), the Employee shall receive a bonus of
$15,000, payable in the payroll succeeding the completion.
4. Severance
Benefits. In addition to all payments under Section 3 of this
Agreement, and as additional consideration for the termination of the Employment
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Employee agree
that the Company shall provide the Employee with the following benefits (the
“Severance Benefits”), in each case reduced by any applicable employment and
withholding taxes:
(a) Payments. Effective
with the funding of the Secondary Offering, but no later than February 28, 2010
in the event of a delayed funding, the Company shall pay directly to the
Employee the following Severance Benefits: (i) A lump sum payment equal to
50% of the liquidating damage payment provided for in the Employment Agreement
(consisting of $165,000 for salary plus a lump sum of $7,200 representing the
amount due in lieu of health insurance); (ii) the remaining 50% of the
liquidating damage payment under the employment agreement (a total of $165,000
plus $600.00 per month in lieu of health insurance) shall be paid to Employee
over a 12 month period beginning on March 1, 2010 in equal installments as part
of the Company’s regular payroll process. The total of the
payments under Section 4(a) (i) and (ii) shall be $344,400.
(b) Stock
Options. The stock options granted to the Employee by the
Company that are outstanding as of the date of the Agreement shall be governed
by the respective option agreement governing each such grant (each an “Option
Agreement”). Employee shall have the right to exercise the Options
pursuant to the respective Option Agreement..
5. No Longer
an Employee. From and after the Termination Date, Employee
shall not be treated as an employee for federal tax purposes, except for the
continuation of the severance payment according to section 4 a). No
payroll or employment taxes of any kind shall be withheld or paid with respect
to payments to Employee pursuant to this Section 5. The payroll or
employment taxes that are subject of this provision include, but are not limited
to FICA, FUTA, Federal Personal Income Tax, State Personal Income Tax, State
Disability Insurance Tax, and State Unemployment Insurance
Tax. Employee shall be responsible for payment of all federal
withholding taxes, self-employment taxes and quarterly tax estimates after the
Termination Date. No workers compensation insurance has been or will
be obtained by the Company on account of Employee with respect to any amounts
payable or as a result of services that may be provided by the Employee pursuant
to this Section 5. Employee
shall comply with all workers compensation laws with respect to
Employee.
6. No
Further Compensation. The Employee acknowledges and agrees
that other than the compensation described in Section 3 under his
Employment Agreement through the Termination Date and the Severance Benefits
described in Section 4 above, no further compensation or benefits or other
monies are owed to the Employee by the Company arising out of the Employment
Agreement, this Agreement or otherwise on account of his employment or
termination of employment with the Company and its Affiliates.
7. Consulting
Services. During the first 12 months following the Termination
Date (the “Guaranteed Consulting Period”), Employee agrees to perform up to 24
hours of services for no additional consideration under this Agreement or
otherwise, as a consultant and as from time to time may be designated by the CEO
or President of the Company or their designees, taking into consideration the
obligation of Employee to his then-current employer. If Employee
provides services for the Company as requested under the foregoing parameters in
excess of 24 hours during the first 12 months following the Termination Date,
and for any hours performed thereafter, Employee shall be compensated for such
services at the rate of $300.00 per hour. The parties specifically intend that
Executive is to perform any such services as an independent contractor to the
Company. Neither Executive nor any agent or employee of Executive
shall be deemed to be the agent, employee, partner or joint venture of the
Company. Nothing in this Agreement, or otherwise, creates or shall be
construed to create the relationship of master and servant or employer and
employee between the Company and Executive after the Termination
Date. Executive acknowledges that from and after that date he will
have absolutely no authority to represent, contract on behalf of, or obligate
the Company.
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8. Restrictions.
(a) Stock
Sales. The Employee hereby agrees not to sell any shares of
the Company’s common stock (“Common Stock”) before the earlier of Company’s
completion of the Secondary Offering or March 1, 2010. Thereafter,
the Employee agrees not to sell more than 30,000 shares of Common Stock in any
calendar month (“Monthly Sale Limit”); provided, that if the Employee sells less
than 30,000 shares of Common Stock in any calendar month, the unsold portion of
such Common Stock may be sold in any subsequent month in addition to the Monthly
Sale Limit for such subsequent month. The Employee shall provide the
Company monthly statements evidencing compliance with the restrictions in this
Section 8(a).
(b) Nondisclosure. The
Employee shall not at any time divulge, communicate, use to the detriment of the
Company or for the benefit of any other person or persons, or misuse in any way,
any Confidential Information (as hereinafter defined) pertaining to the business
of the Company. Any Confidential Information or data now or hereafter acquired
by the Employee with respect to the business of the Company (which shall
include, but not be limited to, information concerning the Company’s financial
condition, prospects, technology, customers, suppliers, sources of leads and
methods of doing business) shall be deemed a valuable, special and unique asset
of the Company that was received by the Employee in confidence and as a
fiduciary, and Employee shall remain a fiduciary to the Company with respect to
all of such information. For purposes of this Agreement, “Confidential
Information” means information disclosed to the Employee or known by the
Employee as a consequence of or through his employment by the Company or during
his service as a consultant to the Company (including information conceived,
originated, discovered or developed by the Employee) prior to or after the date
hereof, and not generally known, about the Company or its business.
Notwithstanding the foregoing, nothing herein shall be deemed to restrict the
Employee from disclosing Confidential Information to the extent required by
law.
(c) Ownership of
Developments. All copyrights, patents, trade secrets, or other
intellectual property rights associated with any ideas, concepts, techniques,
inventions, processes, or works of authorship developed or created by Employee
during the course of performing work for the Company or its clients
(collectively, the “Work Product”) shall belong exclusively to the Company and
shall, to the extent possible, be considered a work made by the Employee for
hire for the Company within the meaning of Title 17 of the United States Code.
To the extent the Work Product may not be considered work made by the Employee
for hire for the Company, the Employee agrees to assign, and automatically
assign at the time of creation of the Work Product, without any requirement of
further consideration, any right, title, or interest the Employee may have in
such Work Product. Upon the request of the Company, the Employee shall take such
further actions, including execution and delivery of instruments of conveyance,
as may be appropriate to give full and proper effect to such
assignment.
(d) Agreement Not To
Compete. For a period of one (1) year following the Termination Date,
Employee agrees not to directly or indirectly own, manage, control, or operate;
serve as an officer, director, partner or employee of; have any direct or
indirect financial interest in; or assist in any way; any person or entity that
competes with any business conducted by the Company or any of its Affiliates in
any geographic region in which the Company or any of its Affiliates conducts
business.
(e) Competitive
Businesses. For purposes of this Section, a competitive business shall be
any person or entity directly or indirectly engaged in the manufacturing,
import, export, sale or distribution of calorie-burning beverages or
supplements.
(f) Ownership of Public
Corporation No Violation. Employee will not be considered to have
violated this provision merely because Employee owns no more than five percent
(5%) of the stock of any publicly held corporation.
(g) Extension of Agreement Not
To Compete. At the Company’s discretion, the Company can cause Employee
to extend the period of the agreement not to compete by paying in advance to the
Employee an amount equal to 30% of the Employee’s last annual base salary and
bonuses per year of extension. The Company can cause the extension for a total
of 3 annual periods.
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(h) Definition of
Company. For purposes of this Section 8, the term “Company”
also shall include the Company’s Affiliates.
(i) Acknowledgment by
Employee. The Employee acknowledges and confirms that (i) the
restrictive covenants contained in this Section 8 are reasonably necessary to
protect the legitimate business interests of the Company, and (ii) the
restrictions contained in this Section 8 (including without limitation the
length of the term of the provisions of this Section 8) are not overbroad,
overlong, or unfair and are not the result of overreaching, duress or coercion
of any kind. The Employee further acknowledges and confirms that his full,
uninhibited and faithful observance of each of the covenants contained in this
Section 8 will not cause him any undue hardship, financial or otherwise, and
that enforcement of each of the covenants contained herein will not impair his
ability to obtain employment commensurate with his abilities and on terms fully
acceptable to him or otherwise to obtain income required for the comfortable
support of him and his family and the satisfaction of the needs of his
creditors. The Employee acknowledges and confirms that his special knowledge of
the business of the Company is such as would cause the Company serious injury or
loss if he were to use such ability and knowledge to the benefit of a competitor
or were to compete with the Company in violation of the terms of this Section 8.
The Employee further acknowledges that the restrictions contained in this
Section 8 are intended to be, and shall be, for the benefit of and shall be
enforceable by, the Company’s successors and assigns.
(j) Reformation by
Court. In the event that a court of competent jurisdiction
shall determine that any provision of this Section 8 is invalid or more
restrictive than permitted under the governing law of such jurisdiction, then
only as to enforcement of this Section 8 within the jurisdiction of such court,
such provision shall be interpreted and enforced as if it provided for the
maximum restriction permitted under such governing law.
(k) Extension of
Time. If the Employee shall be in violation of any provision
of this Section 8 then each time limitation set forth in this Section 8 shall be
extended for a period of time equal to the period of time during which such
violation or violations occur. If the Company seeks injunctive relief from such
violation in any court, then the covenants set forth in this Section 8 shall be
extended for a period of time equal to the pendency of such proceeding including
all appeals by the Employee.
(l) Injunctive
Relief. The covenants of the Employee set forth in this
Section 8 are separate and independent covenants, for which valuable
consideration has been paid, the receipt, adequacy and sufficiency of which are
hereby acknowledged by the Employee, and which have been made by the Employee to
induce the Company to enter into this Agreement. Each of the
aforesaid covenants may be availed of, or relied upon, by the Company or any of
its Affiliates in a court of competent jurisdiction for the basis of injunctive
relief.
9. Resignations. Effective
as of January 20, 2010, the Employee has resigned all of his positions as an
officer and director of the Company and of each of its Affiliates, effective on
the Date of this agreement.
10. Return of
Books, Records, Accounts, Credit Cards and Equipment. The
Employee hereby acknowledges and agrees that all books, records, accounts,
credit cards and equipment relating in any manner to the business of the
Company and/or its Affiliates, whether prepared by the Employee or
otherwise coming into the Employee’s possession, are the exclusive property of
the Company and shall be returned to the Company upon the Termination
Date. Notwithstanding the foregoing, the Employee will be entitled to
keep the equipment identified in Exhibit A.
7. No
Charges Filed. Employee represents and warrants that he has
not filed any claims or causes of action against the Company or any of its
Affiliates, including but not limited to any charges of discrimination against
the Company or its Affiliates, with any federal, state or local agency or
court.
12. No
Administrative Proceeding to be Filed. The Employee agrees not
to institute an administrative proceeding or lawsuit against the Company or any
of its Affiliates, and represents and warrants that, to the best of his
knowledge, no other person or entity has initiated or is authorized to initiate
such administrative proceedings or lawsuit on his
behalf. Furthermore, the Employee agrees not to encourage any other
person or suggest to any other person that he or she institute any legal action
or claim against the Company or any of its Affiliates or any past or present
shareholders, directors, officers or agents.
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13. Duty of
Cooperation. The Employee agrees to cooperate with the Company
and its attorneys in connection with any threatened or pending litigation
against the Company or any of its Affiliates. The Employee agrees to
make himself available upon reasonable notice to prepare for and appear at
deposition or at trial in connection with any such matters. The
Company shall reimburse the Employee for his reasonable out-of-pocket expenses
for such activities and pay Employee for his time according to section
5. The Employee agrees to cooperate fully in effecting an orderly
transition with regard to the termination of the Employee’s employment and the
transition of his duties to other employees of the Company and its
Affiliates.
14. Mutual
General Releases.
(a) Release by
Employee. The Employee, on behalf of himself and his personal
representatives, heirs and assigns (each a “Releasor” and collectively the
“Releasors”), hereby releases, discharges and covenants not to xxx the Company,
its Affiliates and their respective past and present shareholders, directors,
officers, employees, partners and agents, subsidiary and affiliated entities and
successors and assigns (each a “Releasee” and collectively the “Releasees”),
from and for any and all claims, demands, damages, lawsuits, obligations,
promises, administrative actions, charges and causes of action, both known or
unknown, in law or in equity, of any kind whatsoever, which any Releasor ever
had, now has, or may have against any Releasee, for, upon or by reason of any
matter, cause or thing whatsoever, up to and including the date of this
Agreement, including
but not limited to any and all claims and causes of action arising out of
or in connection with Employee’s employment with Company, any and all claims and
causes of action under Title VII of the Civil Rights Act of 1964, as amended,
the Age Discrimination in Employment Act of 1967, as amended, the Retirement
Income Security Act (“ERISA”) and any other federal, state or local
anti-discrimination law, statute or ordinance, and any lawsuit founded in tort,
contract (oral, written or implied) or any other common law or equitable basis
of action, but
excluding any obligations of the Company under this Agreement on under
that certain indemnification agreement by and between the Company and the
Employee dated October 2, 1997 (the “Indemnification Agreement”).
(b) Release by
Company. The Company, on behalf of itself and its Affiliates
(each a “Releasor” and collectively the “Releasors”), hereby releases,
discharges, and covenants not to xxx the Employee, his personal representatives,
heirs and assigns (each a “Releasee” and collectively the “Releasees”), from and
for any and all claims, demands, damages, lawsuits, obligations, promises,
administrative actions, charges or causes of action, both known or unknown, in
law or in equity, of any kind whatsoever, which any Releasee ever had, now has,
or may have against a Releasor, for, upon or (each a “Releasee” and collectively
the “Releasees”) by reason of any matter, cause or thing whatsoever, up to and
including the date of this Agreement, including any lawsuit founded in tort,
contract (oral, written or implied) or any other common law on equitable basis
of action, but
excluding any obligations of the Employee under this Agreement and any
actions of Employee for which he is not indemnified under the Indemnification
Agreement.
15. Attorneys’
Fees. In the event that a legal action is brought to enforce
the terms of this Agreement, the prevailing party shall be entitled to recover
its costs of court, including all attorneys fees at all trial and appellate
levels.
16. Beneficiaries.
Any payment to which Employee is entitled to under this Agreement shall, in the
event of his death, be made to his surviving spouse or such other persons as
Employee shall designate in writing to the Company from time to time. If no such
beneficiaries survive Employee, such payments shall be made to Employee’s
estate.
17. Severability. If
any provision of this Agreement is invalidated by a court of competent
jurisdiction, then all of the remaining provisions of this Agreement shall
remain in full force and effect, provided that both parties may still
effectively realize the complete benefit of the promises and considerations
conferred hereby.
18. Entire
Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the matters set forth herein and
supersedes in its entirety any and all agreements or communications, whether
written or oral, previously made in connection with the matter
herein. Any agreement to amend or modify the terms and conditions of
this Agreement must be in writing and executed by the parties
hereto.
19. Construction. The
parties acknowledge that each party has reviewed and revised this Agreement and
that the normal rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.
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20. Governing
Law; Venue; Waiver of Jury Trial. This Agreement shall be
governed by and construed in accordance with the laws of the State of Florida
without regard to principles of conflicts of law. The exclusive venue
for any action to enforce any provision of this Agreement shall be the state or
federal courts located in Palm Beach County, Florida. The Company and
the Employee each hereby knowingly waive their rights to request a trial by jury
in any litigation in any court of law, tribunal or legal proceeding involving or
arising out of or related to this Agreement.
21. Notices. All
notices required or permitted to be given hereunder shall be in writing and
shall be personally delivered by courier, sent by registered or certified mail,
return receipt requested or sent by confirmed facsimile transmission addressed
as set forth herein. Notices personally delivered, sent by facsimile
or sent by overnight courier shall be deemed given on the date of delivery and
notices mailed in accordance with the foregoing shall be deemed given upon the
earlier of receipt by the addressee, as evidenced by the return receipt thereof,
or five (5) days after deposit in the U.S. mail. Notice shall be sent
(i) if to the Company, addressed to: 000 XX 0xx Xxx,
Xxxxx X, Xxxxxx Xxxxx, XX 00000, attn Xxxxxxx Xxxxx, CEO, and (ii) if to
the Employee, to his address as reflected on the payroll records of the Company,
or to such other address designated by the party by written notice in accordance
with this provision.
22. Waivers.
The waiver by either party hereto of a breach or violation of any term or
provision of this Agreement shall not operate nor be construed as a waiver of
any subsequent breach or violation.
23. Non-Admission
of Liability. Neither this Agreement nor anything contained
herein shall constitute or is to be construed as an admission by the Company or
its Affiliates or the Employee as evidence of any liability, wrongdoing or
unlawful conduct.
24. 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 shall constitute one and the
same instrument and agreement.
25. Sufficient
Time to Review. The Employee acknowledges and agrees that he
has had sufficient time to review this Agreement and consult with anyone he
chooses regarding this Agreement, that he has a right to consult with legal
counsel regarding this Agreement and has been represented by counsel in
connection with this Agreement, and that he has received all information he
requires from the Company in order to make a knowing and voluntary release and
waiver of all claims against the Company.
26. Right of
Rescission. The Employee acknowledges and agrees that he has
been given at least 21 days to review this Agreement. The Employee
further warrants that he may use as much of or all of this 21-day period as he
wishes before signing, and warrants that he has done so. The Employee
further acknowledges and agrees that he has seven days from the date of the
execution of this Agreement by all parties hereto within which to rescind this
Agreement by providing notice in writing to the Company as provided
herein. The Employee further acknowledges that by this Agreement he
is receiving consideration in addition to that to which he is already
entitled. The Employee further acknowledges that this Agreement and
the release contained herein satisfy all of the requirements for an effective
release by the Employee of all age discrimination claims under
ADEA.
27. Headings. The
headings are for the convenience of the parties, and are not to be construed as
terms or conditions of this Agreement.
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IN WITNESS WHEREOF, the
undersigned have executed this Agreement.
COMPANY:
CELSIUS
HOLDINGS, INC., a Nevada corporation
By: /s/
Xxxxxxx X. Xxxxx
Name: Xxxxxxx
X. Xxxxx
Title: CEO
and President
EMPLOYEE:
By: /s/
Jan Norelid
Jan
Norelid
Date
2/9/2010
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