Exhibit 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement is effective as of August 1, 2000, by and
between Desert Health Products, Inc., an Arizona corporation of 0000 Xxxx Xxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxx 00000 ("Employer"), and Thor Lindvaag, ("Executive").
Recitals
WHEREAS, Employer is engaged in the business of reselling Dietary
Supplements and Health Products, and is desirous of acquiring the special skills
and abilities and background in and knowledge of Executive as it relates to
Employer's business and the industry.
WHEREAS, Employer seeks assurance of the association and services of
Executive in order to retain his experience, skills, abilities, background, and
knowledge, and is therefore willing to engage his services on the terms and
conditions set forth below.
WHEREAS, Executive desires to commence working with Employer and is
willing to do so on those terms and conditions.
NOW THEREFORE, in consideration of the above recitals and the mutual
promises and conditions in this Agreement, and other good and valuable
considerations, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. EMPLOYMENT, Employer shall employ Executive as Vice President of
International Sales.
2. EXECUTIVE'S DUTIES,
2.1. Duties at Employer: Executive shall represent the Employer as Vice
President of International Sales. Executive shall act as sales person for
international sales and perform such duties as deemed proper by the Board
of Directors.
3. DEVOTION OF TIME. During the period of his employment hereunder, Executive
shall devote all of his business time, interest attention, and effort to the
faithful performance of his duties hereunder. However, Executive may serve on
the boards of directors of, and hold any other offices or positions in,
companies or organizations which, in the judgment of Employer's Board of
Directors (the "Board" as expressed in a written Board Resolution), will not
present any conflict of interest with Employer or adversely affect the
performance of Executive's duties pursuant to this Agreement.
4. NON COMPETITION DURING TERM OF EMPLOYMENT. During the employment term,
Executive shall not, directly or indirectly, whether as a partner, employee
creditor, shareholder, or otherwise, promote, participate, or engage in any
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activity or other business directly competitive with Employer's business, except
with express permission of the Board, with the exception of Executive's
involvement with Royal Products, Inc. In addition, Executive, while employed,
shall not take any action without Employer's prior written consent to establish,
form, or become employed by a competing business on termination of employment by
Employer. Executive's failure to comply with the provision of the preceding
sentence shall give Employer the right (in addition to all other remedies
Employer may have) to terminate any benefits or compensation to which Executive
may be otherwise entitled following termination of this Agreement.
5. VARIATION OF DUTIES. During the term hereof, Executive shall not vary the
terms of his employment with Employer, without the specific written
authorization from the Board of Directors.
6. TERM OF AGREEMENT. Subject to earlier termination as provided in this
Agreement, Executive shall be employed for a three (3) year term beginning on
the date first written above, and ending January 31, 2004.
6.1 TERM EXTENSION. At any time prior to the expiration of the Term, as
stated in section 6, Employer and Executive may, by mutual written agreement,
extend Executive's employment under the terms of this Agreement for such
additional periods as they may agree.
7. LOCATION OF EMPLOYMENT. Unless the parties agree otherwise in writing, during
the employment term Executive shall perform the services he is required to
perform under this Agreement at Employer's offices to be located in Scottsdale,
Arizona; provided, however, that Employer may from time to time require
Executive to travel temporarily to other locations on Employer's business.
8. COMPENSATION. Employer shall pay compensation to Executive in the following
amounts and on the following terms:
8.1 Salary. For all services rendered by Executive in any capacity during
the term of this Agreement, Employer shall pay Executive annual compensation as
follows, in equal, bi-monthly installments payable on the 1st and 16th day of
each month, or in such other manner as is the general practice of Employer:
8.1.1 First Year of Employment - $60,000
8.1.2 Second Year of Employment - $60,000
8.1.3 Third Year of Employment - $60,000
8.1.4 Fourth Year of Employment - $60,000
8.1.5 Fifth Year of Employment - $60,000
8.2 Salary Accrual. If for any reason Executive shall accrue any portion
of his salary, Executive may demand payment, at any time, by means of registered
S-8 stock of the Company. Employer shall pay for all costs of such registration.
Valuation of such
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stock will be based upon 85% of the 30-day average of the Bid and Ask price of
the Company's common stock as quoted on the Over the Counter Bulletin Board.
8.3 Stock Options. In addition to the basic salary provided for above,
Employer hereby grants to executive the right, privilege and option (the "Stock
Option") to purchase Five hundred thousand (500,000) shares of the common stock,
$0.001 par value. The "Option Shares" are to be fully vested and become
exercisable immediately. The exercise price of the Option Shares shall be
Twenty-five ($.25) per share.
The option rights granted hereby shall be cumulative. Upon becoming exercisable,
the option rights shall be exercisable at any time and from time to time, in
whole or in part; provided, however, that options may be exercised for no longer
than three (3) years from the date of this Agreement. The options shall be
exercised by written notice directed to Employer, accompanied by a check payable
to Employer for the Option shares being purchased. Employer shall make immediate
delivery of such purchased shares, fully paid and non-assessable, registered in
the name of Executive. The certificates evidencing such shares shall bear the
following restrictive legend, unless and until such shares have been registered
in accordance with the Securities and Exchange Act of 1933, as amended (the
"Act"):
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT"), OR THE SECURITIES
LAWS OF ANY OTHER JURISDICITON, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED, OR OTHERWISE DISPOSED OF IN ANY MANNER UNLESS THEY ARE REGISTERED
UNDER SUCH ACT AND THE SECURITIES LAWS OR ANY APPLICABLE JURISDICITONS OR UNLESS
PURSUANT TO ANY EXEMPTION THEREFROM.
Employer shall use its best efforts to register the Option Shares under the Act
at the earlier of such time as it registers shares issuable pursuant to a
qualified employee stock option plan or such time as it registers shares
beneficially owned by or issued to either or all of the following individuals:
If, and to the extent that the number of shares of common stock of Employer
shall be increased or reduced by whatever action, including but not limited to
change of par value, split, reclassification, distribution or a dividend payable
in stock, or the like, the number of shares subject to the Stock Option and the
option price per share shall be proportionately adjusted. If Employer is
reorganized or consolidated or merged with another corporation, Executive shall
be entitled to receive options covering shares of such reorganized,
consolidated, or merged company in the same proportion, at an equivalent price,
and subject to the same conditions. For purposes of the preceding sentence, the
excess of the aggregate fair market value of the shares subject to the option
immediately after any such reorganization, consolidation,
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or merger over the aggregate option price of such shares shall not be more than
the excess of the aggregate fair market value of all shares subject to the Stock
Option immediately before such reorganization, consolidation, or merger over the
aggregate option price of such shares, and the new option or assumption of the
old Stock Option shall not give Executive additional benefits which he did not
have under the old Stock Option, or deprive him of benefits which he had under
the old Stock Option.
Executive shall have no rights as a stockholder with respect to the Option
Shares until exercise of the Stock Option and payment of the Option Price as
herein provided.
9. BENEFITS. During the employment term, Executive shall be entitled to receive
all other benefits of employment generally available to Employer's other
executive and managerial employees when and as he becomes eligible for them,
including group health and life insurance benefits and an annual vacation.
9.1 Vacation. Executive shall be entitled to a paid annual vacation of
three (3) weeks during the first year of employment, and four (4) weeks during
any subsequent years; provided however, that vacation time may not be
accumulated and must be taken by the end of the year in which it has accrued.
9.2 Personal Leave. Executive shall be entitled, without any adjustment in
his compensation, to fifteen (15) days personal leave in each fiscal year of
employment. Personal leave may not be carried over from one fiscal year to the
next.
9.3 Medical and Disability Coverage. Executive shall have the right to all
medical coverage and long term disability coverage on the same terms and
conditions as provided to other employees of Employer holding management
positions. It is agreed and understood that Employer shall obtain reasonable
medical, dental and liability insurance for the benefit of Executive and other
members of management as soon hereafter as is practical, and it shall use its
best efforts to maintain such policies at all time during the employment term.
9.4 Plans. Executive shall be entitled to participate in any and all
plans, arrangements, or distributions by Employer pertaining to or in connection
with any pension, bonus, profit sharing, stock options, and/or similar benefits
for its employees and/or executives, as determined by the Board of Directors of
committees thereof pursuant to the governing instruments which establish and/or
determine eligibility and other rights of the participants and beneficiaries
under such plans or other benefit programs.
10. EXPENSE REIMBURSEMENT. During the employment term, Employer shall reimburse
Executive for reasonable out-of-pocket expenses incurred in connection with
Employer's business, including travel expenses, food, and lodging when away from
home, subject to such policies as Employer may from time to time reasonably
establish for its employees.
11. INTELLECTUAL PROPERTY. All processes, inventions, patents, copyrights,
trademarks, and other intangible rights that may be conceived or developed by
Executive,
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either alone or with others, during the term of Executive's employment, whether
or not conceived or developed during Executive's working hours, and with respect
to which the equipment, supplies, facilities, or trade secret information of
Employer was used, or that relate at the time of conception or reduction to
practice of the invention to the business of the Employer or to the Employer's
actual or demonstrably anticipated research and development, or that result from
any work performed by Executive for Employer, shall be the sole property of
Employer. Executive shall disclose to Employer all inventions conceived during
the term of employment, whether or not the property of Employer under the terms
of the preceding sentence, provided that such disclosure shall be received by
Employer in confidence. Executive shall execute all documents, including patent
applications and assignments, required by Employer to establish Employer's
rights under this Section.
12. INDEMNIFICATION OF EXECUTIVE. Employer shall, to the maximum extent
permitted by law, indemnify and hold Executive harmless against expenses,
including reasonable attorney's fees judgments, fines, settlement, and other
amounts actually and reasonably incurred in connection with any proceeding
arising by reason of Executive's employment by Employer. Employer shall advance
to Executive any expense incurred in defending such proceeding to the maximum
extent permitted by law.
13. TERMINATION BY EMPLOYER. Employer may terminate this Agreement at any time,
if termination is "For Cause", as hereinafter defined. "For Cause" shall mean
Employer's termination of Executive due to an adjudication of Executive's fraud,
theft dishonesty to Employer regarding Executive's duties or material breach of
this Agreement, if Executive fails to cure such breach within Ninety (30) days
after written notice is given by the Board of Directors to Executive and
Executive fails with Ninety (30) days of such notification to commence such cure
and thereafter diligently prosecute such cure to completion.
14. TERMINATION BY EXECUTIVE. Executive may terminate this Agreement by giving
Employer thirty (30) days prior written notice of resignation.
15. DEATH OF EXECUTIVE. If Executive dies during the initial term or during an
renewal term of this Agreement, this Agreement shall be terminated on the last
day of the calendar month of his death. Employer shall then pay to Executive's
estate any salary accrued but unpaid as of the last day of the calendar month in
which Executive dies. Employer shall have no further financial obligations to
Executive or his estate hereunder. Any and all unexercised Stock Option shall
survive Executive's death and shall be exercisable by Executive's estate or its
beneficiaries to whom such Stock Options may be distributed in accordance with
the original terms and conditions of any such Stock Option.
16. AGREEMENT ON BUSINESS COMBINATION OR DISSOLUTION. This Agreement shall not
be terminated by Employer's voluntary or involuntary dissolution or by any
merger in which Employer is not the surviving or resulting corporation, or on
any transfer of all or substantially all of Employer's assets. In the event any
such merger or
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transfer of assets, the provisions of this Agreement shall be binding on and
inure to the benefit of the surviving business entity or the business entity to
which such assets shall be transferred.
17. TRADE SECRETS AND CONFIDENTIAL INFORMATION:
17.1 Nondisclosure. Without the prior written consent of Employer,
Executive shall not, at any time, either during or after the term of this
Agreement, directly or indirectly, divulge or disclose to any person, firm,
association, or corporation, or use for Executive's own benefit, gain, or
otherwise, any customer lists, plans, products, data, results of tests and data,
or any other trade secrets or confidential materials or like information
(collectively referred to as the "Confidential Information") of Employer and/or
its Affiliates, as hereinafter defined, it being the intent of Employer, with
which intent Executive hereby agrees, to restrict Executive from disseminating
or using any like information that is unpublished or not readily available to
the general public.
17.1.1 Definition of Affiliate. For purposes of this Agreement, the term
"affiliate" shall mean any entity, individual, firm or corporation, directly or
indirectly, through one or more intermediaries, controlling, controlled by, or
under common control with Employer.
17.2 Return of Property. Upon the termination of this Agreement, Executive
shall deliver to Employer all lists, books, records, data, and other information
(including all copies thereof in whatever form or media) of every kind relating
to or connected with Employer or its Affiliates and their activities, business
and customers.
17.3 Notice of Compelled Disclosure. If, at any time, Executive becomes
legally compelled (by deposition, interrogatory, request for documents,
subpoena, civil investigative demand, or similar process or otherwise) to
disclose any of the Confidential Information, Executive shall provide Employer
with prompt, prior written notice of such requirement so that Employer may seek
a protective order or other appropriate remedy and/or waive compliance with the
terms of this Agreement. In the event that such protective order or other remedy
is not obtained, that Employer waives compliance with the provisions hereof,
Executive agrees to furnish only that portion of the Confidential Information
which Executive is advised by written opinion of counsel is legally required and
exercise Executive's best efforts to obtain assurance that confidential
treatment will be accorded such Confidential Information. In any event,
Executive shall not oppose action by Employer to obtain an appropriate
protective order or other reliable assurance that confidential treatment will be
accorded the Confidential Information.
17.4 Assurance of Compliance. Executive agrees to represent to Employer,
in writing, at any time that Employer so request, that Executive has complied
with the provisions of this section, or any other section of this Agreement.
18. NON-COMPETITION. For a period of three (3) years after the termination of
this Agreement, Executive expressly covenants and agrees that Executive will not
and
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will not attempt to, without the prior written consent of the Board of
Directors, directly or indirectly, (except as to those entities set forth in
Paragraph 4, above):
18.1 Own, manage, operate, finance, join, control, or participate in the
ownership, management, operation, financing, or control of, or be associated as
an officer, director, employee, agent, partner, principal, representative,
consultant, or otherwise with, or use or permit his name to be used in
connection with, any line of business or enterprise that competes with Employer
or its Affiliates (as defined herein) in any business of Employer or its
Affiliates, existing or proposed, wherever located, provided that Executive
shall not be prohibited from owning, directly or indirectly, less than one
percent (1%) of the outstanding shares of any Corporation, the shares of which
are traded on a National Securities Exchange or in the over-the counter markets.
18.2 Interfere with or disrupt or attempt to interfere with or disrupt or
take any action that could be reasonably expected to interfere with or disrupt
any past or present or prospective relationship, contractual or otherwise,
between Employer and/or any of its Affiliates, and any customer, insurance
company, supplier, sales representative, or agent or employee of Employer or any
such affiliate of Employer.
18.3 Directly or indirectly solicit for employment or attempt to employ or
assist any other entity in employing or soliciting or attempting to employ or
solicit for employment, either on a full-time, part-time, or consulting basis,
any employee, agent, representative, or executive (whether salaried or
otherwise, union or non-union) who within three (3) years of the time that
Executive ceased to perform services hereunder has been employed by Employer or
its Affiliates.
19. VIOLATION OF COVENANTS:
19.1 Injunctive Relief. Executive acknowledges and agrees that the
services to be rendered by Executive hereunder are of a special unique, and
personal character that gives them peculiar value; that the provisions of this
section are, in view of the nature of the business of Employer, reasonable and
necessary to protect the legitimate business interests of Employer; that
violation of any of the covenants or Agreements hereof would cause irreparable
injury to Employer, that the remedy at law for any violation or threatened
violation thereof would be inadequate; and that, therefore, Employer shall be
entitled to temporary and permanent injunctive or other equitable relief as it
may deem appropriate without the necessity of proving actual damages and to an
equitable accounting of all earnings, profits, and other benefits arising, from
any such violation, or attempted violation, which rights shall be cumulative and
in addition to all other rights or remedies available to Employer.
19.2 Executive and Employer recognize that the laws and public policies of
the various state of the United States may differ as to the validity and
enforceability of certain of the provisions contained in this section. It is the
intention of Executive and Employer that the provisions of this section shall be
enforced to the fullest extent permissible under the laws and public policies of
each jurisdiction in which such
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enforcement is sought, but that the invalidation (or modification to conform
with such laws or public policies) of any provision hereof shall not render
unenforceable or impair the remainder of this section. Accordingly, if any
provision of this section shall be determined to be invalid or unenforceable,
either in whole or in part this section shall be deemed to delete or modify, as
necessary, the offending provision and to alter the balance of this section in
order to render it valid and enforceable to the fullest extent permissible as
provided herein.
20. LIQUIDATED DAMAGES, EMPLOYER'S BREACH. In the event of any material breach
of this Agreement on the part of Employer, Executive at his sole option, may
terminate his employment under this Agreement and, at his sole option, shall be
entitled to receive as liquidated damages the amounts set forth in the following
subsection. The liquidated damages so received by Executive shall not be limited
or reduced by amounts that Executive might otherwise earn or be able to earn
during the period between termination of his employment under this Agreement and
payment of those liquidated damages. The provisions of this Section 20 shall be
in addition to any and all rights Executive may have in equity or at law to
require Employer to comply with or to prevent the breach of this Agreement.
20.1 The present value on the payment date (as defined in this section) of
the full amount of his basic salary as provided for in this Agreement for three
(3) years following the payment due, discounted to the payment date at a rate
for quarterly periods based on prime interest rate charged by Bank of America,
for short term commercial loans on the payment date. The amount payable to
Executive under this subsection shall be due and payable in full on the date of
notification of Employer by Executive of the exercise of his option to terminate
his employment under this Agreement (the "payment date").
21. MISCELLANEOUS:
21.1 Authority to Execute. The parties herein represent that they have the
authority to execute this agreement.
21.2 Severability. If any term, provision, covenant, or condition of this
Agreement is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, the rest of this Agreement shall remain in full
force and effect.
21.3 Successors. This Agreement shall be binding on and inure to the
benefit of the respective successors, assigns, and personal
representatives of the parties, except to the extent of any contrary
provision in this Agreement.
21.4 Assignment. This Agreement may not be assigned by either party
without the written consent of the other party.
21.5 Singular, Plural and Gender Interpretation. Whenever used herein, the
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singular number shall include the plural, and the plural number shall
include the singular. Also, as used herein, the masculine, feminine or
neuter gender shall each include the others whenever the context so
indicates.
21.6 Captions. The subject headings of the paragraphs of this Agreement
are included for purposes of convenience only, and shall not effect the
construction or interpretation of any of its provisions.
21.7 Entire Agreement. This Agreement contains the entire agreement of the
parties relating to the rights granted and the obligations assumed in this
instrument and supersedes any oral or prior written agreements between the
parties. Any oral representations or modifications concerning this
instrument shall be of no force or effect unless contained in a subsequent
written modification signed by the party to be charged.
21.8 Arbitration. Any controversy or claim arising out of, or relating to,
this Agreement, or the making, performance, or interpretation thereof,
shall be submitted to a panel of three (3) arbitrators. The arbitration
shall comply with and be governed by the provisions of the American
Arbitration Association. The panel of arbitrators shall be composed of two
(2) members chosen by Executive and Employer respectively and one (1)
member chosen by the arbitrators previously selected. The findings of such
arbitrators shall be conclusive and binding on the parties hereto. The
cost of arbitration shall be borne by the losing party or in such
proportions as the arbitrator shall conclusively decide.
21.9 No Waiver. No failure by either Executive or Employer to insist upon
the strict performance by the other of any covenant, agreement, term or
condition of this Agreement or to exercise the right or remedy consequent
upon a breach thereof shall constitute a waiver of any such breach or of
any such covenant, agreement, term or condition. No waiver of any breach
shall affect or alter this Agreement, but each and every covenant,
condition, agreement and term of this Agreement shall continue in full
force and effect with respect to any other then existing or subsequent
breach.
21.10 Time of the Essence. Time is of the essence of this Agreement, and
each provision hereof.
21.11 Counterparts. The parties may execute this Agreement in two (2) or
more counterparts, which shall, in the aggregate, be signed by both
parties, and each counterpart shall be deemed an original instrument as to
each party who has signed by it.
21.12 Attorney's Fees and Costs. In the event that suit be brought hereon,
or an attorney be employed or expenses be incurred to compel performance
the parties agree that the prevailing party therein be entitled to
reasonable attorney's fees.
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21.13 Governing Law. The formation, construction, and performance of this
Agreement shall be construed in accordance with the laws of Arizona.
21.14 Notice. Any notice, request, demand or other communication required
or permitted hereunder or required by law shall be in writing and shall be
effective upon delivery of the same in person to the intended addressee,
or upon deposit of the same with an overnight courier service (such as
Federal Express) for delivery to the intended addressee at its address
shown herein, or upon deposit of the same in the United States mail,
postage prepaid, certified or registered mail, return receipt requested,
sent to the intended addressee at its address shown herein. The address of
any party to this Agreement may be changed by written notice of such other
address given in accordance herewith and actually received by the other
parties at least ten (10) days in advance of the date upon which such
change of address shall be effective.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
EXECUTIVE:
DATE: August 1, 2000 By: /S/ Thor Lindvaag
------------------------ --------------------------
Thor Lindvaag
EMPLOYER: Desert Health Products, Inc.
DATE: August 1, 2000 By: /S/ Xxxxxx Xxxxxxx
------------------------ --------------------------
Xxxxxx Xxxxxxx, President
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