EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of
November 1, 1999, by and between NUTRASTAR, INCORPORATED, a Nevada corporation
("Company"), and XXXXXXXX XxXXXX, an individual ("Executive").
RECITALS
A. Company manufactures and distributes nutrition related products (as may
be modified and expanded from time to time, the "Company Business ").
B. Company and Executive desire by this Agreement to provide for employment
of Executive by Company on the terms, conditions and provisions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and provisions set forth below, and for other good and valuable consideration
(receipt and sufficiency of which are hereby acknowledged), Company and
Executive agree as follows:
1. Term. Company agrees to employ Executive, and Executive hereby
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accepts such employment, in accordance with the terms of this Agreement,
continuing from and after the date of this Agreement, and ending on the earlier
of (i) October 31, 2009, or (ii) the mutual written agreement of Company and
Executive to terminate this Agreement (the "Terms").
2. Duties. Executive shall serve as Chief Executive Officer and
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President of Company throughout the Term. In the performance of Executive's
duties Executive shall report directly to, and shall be subject to the direction
of, the Board of Directors (the "Board") of Company, and to such limits on
Executive's duties as the Board may from time to time impose.
The Executive hereby represents to the Company that she has discussed her
resignation of employment with her current employer. The RiceX Company, which
the Executive shall make effective no later than the date hereof, and that the
execution and delivery of this Agreement by the Executive and the Company and
the performance by the Executive of the Executive's duties hereunder shall not
constitute a breach of or otherwise contravene, the terms of any employment
agreement or other agreement or policy to which the Executive is a part, or
otherwise bound.
3. Performance of the Duties, Outside Activities. Executive shall at as
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times throughout the Term act diligently on a full time basis to perform the
Duties, Except as provided below in clauses (a), (b) and (c) of this Section 3,
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Executive agrees, during the Term, not to provide employment or consulting
services to others outside the Company or otherwise engage in any other
business, profession or occupation for compensation or otherwise. Executive also
agrees to submit to a physical examination and otherwise cooperate with the
Company to enable the Company to obtain term life or other insurance covering
Executive if required to obtain such
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insurance under other provisions of this Agreement. Subject to the Executive's
compliance with the other provisions of this Agreement and any Confidential
Information Agreement in effect between Executive and the Company:
(a) Executive may serve as a director on boards of directors of
other companies with the prior written consent of the Company which consent
shall not be reasonably withheld or delayed, and may serve any civic,
educational or charitable organization in any manner, that in each case
described in this clause (a) does not materially interfere with her duties to
the Company, and
(b) Executive may also invest her own personal assets in
businesses to an extent that does not interfere with her duties to the Company,
does not require her time in managing or providing services in the day to day
affairs of such businesses, and does not create conflicts of interest with the
Company, and
(c) Executive may perform any services for others, provided
that: 1) the amount of such services rendered does not exceed 10% of her daily
working hours; 2) she does not utilize Company resources with respect to these
services; 3) she notifies the Board of the name(s) of any person(s) or company
for whom she intends to provide services at least ten (10) days prior to
accepting the engagement; 4) the services may not conflict with the interests of
the Company without the prior written permission of the Board, which permission
may be withheld if there is a conflicting interest (including without limitation
work for a company which is or may be a competitor or material supplier or
material customer of the Company; and 5) she shal1 notify any person(s) or
companies for whom she performs services that she is an employee of the
Company and authorized to provide outside services that do not conflict or
directly compete with the Company's business, and that she is not authorized to
transfer or license any Company technology or intellectual property rights to
anyone.
4. Base Salary. Company shall pay Executive base salary ("Base Salary")
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as set forth in this section. Commencing on the date of this Agreement Company
shall pay Executive a Base Salary of $250,000 per annum, adjusted as follows:
(i) upon the Company achieving $25,000,000 in annual gross sales, or the
Company's common stock trades at a minimum of $25 per share for 90 consecutive
days, the Base Salary shall increase to $500,000 per annum; (ii) upon the
Company achieving $50,0OO,O0O in annual gross sales, the Base Salary shall be
increased to $1,000,000 per annum; (iii) thereafter, the Base Salary shall be
increased each year by 1% of any increase in annual gross sales. In no event
shall the adjusted Base Salary be reduced, regardless of whether the Company
continues to achieve the gross sales benchmarks. The Base Salary shall be paid
pursuant to Company policies in effect from time to time, but in any event at
least once during each thirty (30) day period.
5. Bonus. Executive may qualify for an annual bonus consisting of cash
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and Company stock, (collectively, a "Bonus") pursuant to this Section 5.
5.1 Cash Bonuses. The Company agrees to maintain an annual
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bonus
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program for members of the senior management group including the Executive. The
Executive shall be eligible to receive an annual bonus under the terms otherwise
governing the annual bonus program.
5.2 Stock Bonuses and Stock Options. Company shall issue and
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deliver to Executive voting common stock of Company ("Company Stock") and
options to purchase Company Stock (the "Options") in accordance with any Company
Stock Bonus or other stock based executive compensation plans.
6. Other Matters Relating to Stock and Options. Executive shall be
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entitled to additional rights, if any, as Company may give other executive
officers of Company relating to rights of first refusal or preemptive rights to
acquire additional securities of Company, registration rights, or similar
"investor rights" associated with stock or options made available to the other
officers. All options granted under this Agreement are subject to the applicable
Company executive compensation plan, a copy of which has been or shall be
furnished to Executive. Other than any antidilution protection which may be
specifically provided in the plan for stock splits, dividends, combinations and
the like, additional issuances of securities by Company shall not require or
imply any adjustment in the number of shares, price or other terms of any stock
or options granted to Executive under this Agreement.
7. Executive Benefits. From and after the date of this Agreement,
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Company shall provide Executive with the benefits listed below in this section,
subject to the general requirements of group insurance coverage if applicable
and on a pro rata basis with Executive's salary or other benefits where the
terms of the benefit are generally based on such factors. Once implemented,
Company reserves the right to modify or end any and all benefits subject only to
applicable requirements of law and its covenant below or to treat Executive on
the same basis as other top-level officers. Receipt of certain benefits under
this section may be taxable as income and Executive is advised to consult her
personal tax advisor for more information.
7.1 Car Expense. Company shall pay or reimburse Executive
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$1,000 per month automobile allowance, plus all insurance, gas and maintenance
expenses.
7.2 Medical Insurance. Company shall provide Executive (and,
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to the extent otherwise applicable, family dependents) with the top-level of any
health, dental and eye care insurance if and to the extent offered by Company
from time to time, all on terms no less favorable than that made available to
any other executive officer of the Company.
7.3 Disability and Life Insurance. Company shall provide
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Executive with the top-level disability and life insurance group coverage if and
to the extent offered from time to time to top-level officers of the Company,
all on terms no less favorable than that made available to any other executive
officer of the Company.
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7.4 Retirement Plan. Company shall provide Executive with
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participation in 401(K) retirement savings plan or other retirement plans if
and to the extent provided from time to time to top-level officers of Company.
7.5 Employee Benefit Plans. Company shall provide Executive
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with participation in any welfare benefit plan, including, without limitation,
any expense reimbursement plan, if and to the extent provided from time to time
top-level officers of the Company.
7.6 Mobile Telephone and Pager. Company shall provide
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Executive with a mobile telephone (and pager if desired by Executive; reasonably
acceptable to Executive and Company shall pay all costs and charges associated
with the mobile telephone (and pager, if applicable).
7.7 Laptop/notebook Computer and Software. Company shall
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provide Executive with a top-quality, name-brand laptop or notebook computer
(Sony, IBM, Toshiba, NEC, Compaq, etc.) and such other features, hardware
(including a high-quality laser printer) and software as Executive may from time
to time request for performance of the Duties. Company shall pay all costs
related to the operation and maintenance of the computer and software.
7.8 Private Office; Staff; Equipment; Location of Office and
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Headquarters; Relocation. Company shall provide Executive with a suitable office
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for her position at the Company, within the context of the space available from
time to time. Company shall provide a minimum of two personal assistants
("Assistants") to assist Executive in business and personal matters. Company
shall provide all office equipment reasonably required by Executive and
Assistants. Executive shall not be required to relocate outside of El Dorado
Hills California. If, however, Executive agrees to a relocation outside of El
Dorado Hills California, then Company shall pay all reasonable relocation costs
of Executive, her spouse and her dependents, including without limitation all
professional packing and moving costs, air travel, interim hotel arrangements
(Hilton, standard or better for up to three (3) months) and reasonable meal per
diem, and vehicle shipment costs.
7.9 Vacation/Personal Time. The Executive shall be entitled
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to a total 30 weekdays (Monday through Friday) per employment year commencing
upon the date of this Agreement for vacation, sick leave and other personal time
off work (the "Personal Time"), in addition to national or other holidays chosen
by the Company as holidays for all employees (which general holidays shall not
be counted as Personal Time). Any accrued but unused Personal Time may be
carried forward into subsequent years; provided, however, that no Personal Time
shall be earned or accrued if the accrued but unused Personal Time available to
the Executive at any time exceeds a total of 30 days. Personal Time shall not
resume to be earned until accrued and unused Personal Time again declines below
30 days. The Executive and the Company shall reasonably cooperate with each
other in scheduling Personal Time used for vacation.
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7.10 Air Travel. Wherever performance of the duties requires
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Executive to travel by air, Company shall pay for Executive to travel first
class domestically and internationally.
7.11 Parking. Company shall provide Executive with a
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reserved parking space in the covered parking stricture closest to the Company
offices. If such space is not available at any time during the Term, then
Company shall provide Executive with a comparable reserved and covered parking
space.
7.12 Professional Associations and Social Organizations.
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Company shall pay or reimburse Executive for all dues for continued membership
in the AACC, ROCS and IFT organizations and any other professional organizations
membership to which the Company and Executive agree would be beneficial to the
Company. In the interest of business development and marketing, Company shall
pay or reimburse Executive for the initiation fee and annual dues of a local
country club to be mutually selected by Company and Executive.
8. Expense Account. Company shall provide Executive with one or more
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major credit cards such as American Express, Mastercard or Visa (which credit
card(s) shall be billed to Company and not to Executive) for Executive to use
to pay for Company's business expenses incurred through Executive's performance
of the Duties. Executive's Duties shall expressly include business development
activities involving travel and entertainment expenses calculated to generate
additional Company Business.
9. Termination.
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9.1 Termination on Death. This Agreement shall terminate upon
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the death of Executive. Company shall pay Executive's estate all amounts due to
Executive as of the date of death, including without limitation all Base
Salary, earned bonuses and accrued and unused Personal Time, and other benefits,
if any, which are accrued, owing and unpaid at the date of death.
9.2 Termination on Disability. This Agreement shall terminate
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upon the Disability of the Executive, as defined below. In such event, the
Company shall pay the Executive the Base Salary, bonus and benefits payable to
the Executive under this Agreement for the remainder of the Term, reduced by any
monies paid to the Executive through Company sponsored disability coverage. In
either event, the Company shall also pay the Executive all salary, unused
Personal Time, earned bonuses, and other benefits, if any, which are accrued,
owing and unpaid at the date of termination. Upon a termination of the
Executive's employment described in this Section 9.2, the Executive shall have
no further rights to any compensation or any other benefits under this
Agreement.
For purposes of this Agreement, Disability shall mean
commencement of benefits to the Executive based on full disability as defined
under the Company's group disability insurance policy, if any, in effect at the
time of that event, and in the absence of any such policy,
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the absence of the Executive from full time performance of her duties for a
period in excess of ninety (90) consecutive days due to incapacity of the
Executive from physical or mental illness.
9.3 Termination Upon Written Notice. Company and Executive
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shall each have the right to terminate this Agreement without cause and for any
reason or no reason upon thirty (30) days prior written notice to the other
party. If Executive terminates this Agreement pursuant to this section, then
Company shall pay Executive all amounts described in Section 9.1. If Company
terminates this Agreement pursuant to this section, then Company shall pay
Executive the Base Salary, bonus and benefits payable to the Executive under
this Agreement for the remainder of the Term, but reduced by any monies paid to
the Executive or the Executive's estate under the Company's group disability or
life insurance policies in the event the Executive becomes disabled or dies
during the remainder of the Term. The Company shall also pay the Executive all
Base Salary, unused Personal Time earned bonuses and other benefits, if any,
which are accrued, owing and unpaid at the date of termination.
9.4 Related Terms. Other than the amounts stated above in this
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Section 9, Executive will not be entitled to any other sums from Company
relating to the end of her employment, provided this sentence is not intended to
apply to payments or rights imposed by law, such as under COBRA or ERISA. As a
condition to any obligation to make lump sum or continuing payments to Executive
under Sections 9.3, Executive shall sign and deliver a general release in form
and content reasonably satisfactory to both parties in which Executive releases
Company and its affiliates from all claims and liabilities that may relate to
her employment by Company and/or arise under any state or federal laws relating
to employment. This release shall not excuse or impair timely payment or
performance by Company of any sums due under this Agreement or obligations under
other written option or other agreements between the parties.
10. Confidential Information Agreement and Non-Competition.
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10.1 Confidentiality. The Executive agrees to enter into the
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Company's standard confidentiality and inventions agreement required from other
senior management from time to time, the initial agreement attached hereto as
Exhibit A. Without limiting the foregoing, Executive agrees that Executive will
not at any time (whether during or after this employment wish the Company)
disclose or use for her own benefit or purposes or the benefit or purposes of
any other person, firm, partnership, joint venture, association, corporation or
other business organization, entity or enterprise other than the Company and any
of its subsidiaries or affiliates, any trade secrets, technology, information,
data or other confidential information relating to customers, development
programs. costs, marketing, trading, investment. sales activities, promotion,
credit and financial data, manufacturing processes; financing methods, plans, or
the business and affairs of the Company generally, or of any subsidiary or
affiliate of the Company, provided that the foregoing shall not apply to
information which is not unique to the Company or which is generally known to
the industry or the public other than as a result of Executive's breach of this
covenant. Executive agrees that upon termination of her employment with the
Company for any reason, she will return to the Company immediately all
memoranda, books, papers, plans, business or financial information, letters and
other data, and all copies thereof or therefrom
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embodied or stored in documents, disks of any nature, or other media, in any way
relating to the business of the Company and its affiliates, except that she may
retain personal notes, notebooks and diaries that do not contain confidential
information of the type described in the preceding sentence. Executive further
agrees that she will not retain or use for her account at any time any trade
names, trademark or other proprietary business designation used or owned in
connection with the business of the Company or its affiliates.
10.2 Non-Compete. Executive acknowledges and recognizes the
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highly competitive nature of the businesses of the Company and its affiliates
and accordingly agrees as follows:
(a) To the fullest extent the same may be enforceable under
any law, during the Term and for a period of nine (9) months following the
date Executive ceases to be employed by the Company (the "Restricted Period").
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the Executive will not directly or indirectly (i) engage anywhere in the world
(the "Geographic Area") in any business for the Executive's own account that
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competes with the business of the Company, (ii) enter the employ of, or render
any services to, any person engaged in any business that competes with the
business of the Company within the Geographic Area, (iii) acquire a financial
interest in, or otherwise become actively involved with, any person engaged in
any business that competes with the business of the Company within the
Geographic Area, directly or indirectly, as an individual, partners,
shareholder, officer, director, principal, agent, trustee or consultant, or (iv)
interfere with business relationships (whether formed before or after the date
of this Agreement) between the Company or any of its affiliates that are engaged
in a business similar to the business of the Company (the "Company Affiliates")
and customers or suppliers of the Company or the Company Affiliates. The
Executive acknowledges that this is a reasonable restriction to prevent
inevitable disclosure of trade secrets of the Company or Company Affiliates, and
that the Executive shall have the burden of proving that this restriction is
not reasonably appropriate for the protection of these trade secrets.
Notwithstanding the foregoing, this restriction shall not preclude the Executive
from accepting employment at a company in which she does not own or share a
controlling interest if the Executive's duties during such 9 month period
following employment with the Company do not involve the Executive's
participation in activities or 1ines of business which compete with the
business of the Company or Company Affiliates and do not conflict with clause
(iv) above.
(b) Notwithstanding anything to the contrary in this
Agreement, the Executive may, directly or indirectly own, solely as an
investment, securities of any person engaged in the business of the Company
which are publicly traded or a national or regional stock exchange or on the
over-the-counter market if the Executive (i) is not a controlling person of, or
a member of a group which controls, such person and (ii) does not, directly or
indirectly, own five percent (5%) or more of any class of securities of such
person.
(c) During the Restricted Period, the Executive will not,
directly or indirectly (i) solicit or encourage any employee of the Company or
the Company Affiliates to leave the employment of the Company or the Company
Affiliates or (ii) hire any such employee who has left the employment of the
Company or the Company Affiliates following, or within one year
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prior to the date of the Executive's termination of employment with the Company
or the Company Affiliates.
(d) During the Restricted Period, the Executive will not,
directly or indirectly, solicit or encourage to cease to work with the Company
or the Company Affiliates any consultant then under contract with the Company or
the Company Affiliates.
(e) During the Restricted Period, the Executive will not
directly or indirectly, solicit, or encourage to cease to do business with the
Company or the Company Affiliates, any customer, vendor, supplier or other third
party with whom, prior to the termination of the Executive's employment, the
Executive has had any significant role in negotiating contracts, managing that
account or otherwise dealing with that customer or other third party. The
Executive acknowledges that this is a reasonable restriction to prevent
inevitable disclosure of trade secrets of the Company or Company Affiliates, and
that the Executive shall have the burden of proving that this restriction is not
reasonably appropriate for the protection of these trade secrets.
10.3 Savings Clause. The Executive acknowledges that no
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shareholder or sender would invest any monies in the Company without the benefit
of the covenants contained in this Section 10 by the Executive, and that these
covenants are an important part of the Company's strategy to achieve value for
all of its shareholders, including the Executive to the extent of her interest
in the Company's stock. The Executive represents that she has consulted with
counsel concerning the terms of this Agreement, including, but not limited to,
the provisions of this Section 10, and acknowledges that compliance with the
provisions of this Section 10 are fair and reasonable. The Executive further
acknowledges that compliance with the provisions of this Section 10 will not
create any hardship on the Executive as she has both independent means and
sufficient income to be fully self-supporting without competing with the Company
or otherwise violating any of the provisions hereof. Accordingly, the Executive
shall be bound by the provisions hereof to the maximum extent permitted by law,
it being the intent and spirit of the parties that the foregoing will be fully
enforceable. However, the parties farther agree that, if any of the provisions
hereof shall for any reason be held to be excessively broad as to duration,
geographical scope, property or subject matter, it shall be construed by
limiting and reducing it so as to be enforceable to the extent compatible with
the applicable law, as it shall herein pertain.
10.4 Specific Performance. Executive acknowledges and agrees
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that the Company's remedies at law for a breach or threatened breach of any of
the provisions of this Section 10 would be inadequate and, in recognition of
this fact. Executive agrees that, in the event of such a breach or threatened
beach, in addition to any remedies at law, the Company, without posting any
bond, shall be entitled to cease making any payments or providing any benefit
otherwise required by this Agreement and obtain equitable relief in the form of
specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available.
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11. General Provisions.
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11.1 Notices. Any notice or other communication given hereunder
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("Notice") shall be in writing and personally delivered, sent by United States
Registered or Certified Mail, or sent by a nationally recognized courier service
such as Federal Express addressed as follows:
IF TO COMPANY: Nutrastar, Incorporated
0000 Xxxxx Xxxxxx Xxxxx
Xx Xxxxxx Xxxxx, XX 95?62
IF TO EXECUTIVE: Xx. Xxxxxxxx XxXxxx
0000 Xxxxx Xxxxxx Xxxxx
Xx Xxxxxx Xxxxx, XX 00000
Delivery of any notice shall be deemed made on the date of its actual delivery
if personally delivered, and on the date indicated in the return receipt or
courier's records as the date of its delivery or first attempted delivery if
sent by mail or courier. Any party may change its address for notice purposes by
giving notice to the other party.
11.2 Time of the Essence. Time is of the essence with respect
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to the performance by Company and Executive of each and every obligation under
any provision of this Agreement.
11.3 Cost Recovery. In any action involving Company and
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Executive arising out of or otherwise relating to this Agreement, the prevailing
party shall recover from the other party, in addition to any damages, injunctive
or other relief, all costs (whether or not allowable as "cost" items by law)
reasonably incurred at, before and after trial or on appeal, or in any
arbitration or bankruptcy proceeding, including without limitation attorneys'
and witness (expert and otherwise) fees, deposition costs, copying charges and
other expenses.
11.4 Interpretation. Each party to this Agreement (and such
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party's counsel if such party so elected) has reviewed and revised this
Agreement and any rule of contract interpretation to the effect that ambiguities
or uncertainties are to be interpreted against the drafting party or the party
who caused it to exist shall not be employed in the interpretation of this
Agreement or any document executed in connection herewith.
11.5 Interest. All amounts not paid within thirty (30) days of
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when due shall bear interest at the lesser of ten percent (10%) per annum or the
maximum legal rate from the date due until the date paid.
11.6 Arbitration of Disputes.
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(a) Executive and Company agree that any dispute or controversy
arising out of, relating to, or in connection with this agreement, or the
interpretation, validity, construction,
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performance, breach, or termination thereof (and whether arising in contract,
tort, statutory law, equity or otherwise), shall be settled by arbitration to be
held within twenty-five (25) miles of Company's principal executive office, in
accordance with the National Rules for the Resolution of Employment Disputes
then in effect of the American Arbitration Association (the "Rules"). The
parties agree that this arbitration provision applies only to this agreement,
and does not apply to either party under any separate option, confidential
information, nondisclosure or other written agreement between them that may be
in effect from time to time. There shall be a single arbitrator agreed upon
mutually by the parties. If the parties cannot agree upon the selection of an
arbitrator within 30 days after the demand for arbitration given by one party to
the other, the selection of the arbitrator shall be made as provided in the
Rules. The arbitrator may grant damages, injunctions or other relief in such
dispute or controversy, except that the arbitrator shall not have the power to
award any damages or other relief or remedy that would not be available from a
court of competent jurisdiction located in California. The decision of the
arbitrator shall be final, conclusive and binding on the parties to the
arbitration. Judgment may be entered on the arbitrator's decision in any court
having jurisdiction. Either party shall be entitled to seek injunctive or other
similar relief from a court pending any arbitration proceeding to the extent
otherwise available at law, or in equity, and that relief shall not be deemed to
waive the right to arbitration.
(b) The arbitrator shall apply California law without reference to
rules of conflicts of law, and any applicable federal law of the United States
of America to the merits of any dispute or claim. The arbitration proceedings
shall be governed by federal arbitrator law and by the Rules, without reference
to state arbitration law. Executive and Company hereby expressly consent to the
personal jurisdiction of the state and federal courts located in California for
any action or proceeding arising from or relating to this Agreement and/or
relating to any arbitration in which the parties are participants.
(c) Executive and Company shall each pay one-half of the costs and
expenses of such arbitration, and shall separately pay her or its own counsel
fees and expenses during the course of arbitration, provided that the arbitrator
shall have the discretion to award attorneys' fees to the prevailing party.
(d) Notwithstanding the foregoing, each party agrees that the foregoing
arbitration clause shall not apply to the subject matter of the Confidential
Information Agreement or similar written contract in effect from time to time
between the parties, and neither party is obligated to submit to arbitration any
dispute arising under such separate written agreements.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU
ARE GIVING UP ANY RIGHTS EXECUTIVE MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED
IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP
YOUR JUDICIAL RIGHTS TO APPEAL, UNLESS THOSE RIGHTS ARE
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SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU
REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE
COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION
TO NEUTRAL ARBITRATION.
/S/ /S/
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COMPANY'S INITIALS EXECUTIVE'S INITIALS
11.7 Severability. If any provision of this Agreement or its
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application to any party or circumstance is held invalid or unenforceable, then
the remainder of this Agreement and the affected provision to the extent it is
not so held shall remain valid and enforceable and in full force and effect.
11.8 Withholding. The Company shall be entitled to withhold,
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or cease to be withheld, all applicable withholding taxes required by foreign,
federal, state or local laws from all cash and noncash compensation or other
payments made to Executive in connection with her employment, this Agreement, or
other agreements, if any, between the Executive and the Company.
11.9 Authority.
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(a) By Company. Company represents and warrants to Executive
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that: (i) Company has the full right and authority to enter into and perform
this Agreement; (ii) each person signing this Agreement for Company is
authorized to so sign; (iii) the execution, consent or acknowledgement of no
other party is necessary in order to validate Company's entry into and
performance of this Agreement; (iv) Company's entry into and performance of this
Agreement do not violate any agreement binding on Company; and (v) this
Agreement is a legal, valid, binding and enforceable obligation of Company.
(b) By Executive. Executive represents and warrants to
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Company that: (i) Executive has the full right and authority to enter into and
perform this Agreement; (ii) the execution, consent or acknowledgement of no
other party is necessary in order to validate Executive's entry into and
performance of this Agreement; (iii) Executive's entry into and performance of
this Agreement do not violate any agreement binding on Executive; and (iv) this
Agreement is a legal, valid, binding and enforceable obligation of Executive.
11.10 No Waiver. A waiver by either party of a default by the
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other party or a right hereunder is effective only if it is in writing signed by
the waiving party and shall no be construed as a waiver of any other default or
right.
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11.11 Governing Law. This Agreement shall be interpreted,
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enforced and governed under the laws and the judicial decisions of the State of
California Venue for any disputes arising in connection with this Agreement or
Company shall be in California.
11.12 Counterparts. This Agreement may be executed in any
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number of counterparts, each of which shall be an original, but all of which,
together, shall constitute one instrument.
11.13 No Assignment. Company's agreement to enter into this
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Agreement with Executive is based on the personal and unique experience,
qualifications, skills and nature of Executive. Accordingly, Executive shall not
assign or transfer any of its rights, duties or obligations under this
Agreement.
11.14 No Partnership. This Agreement shall not be construed
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as creating a partnership, or joint venture between Company and Executive or
between either of them and any third party.
11.15 No Beneficiaries. No parties other than Company and
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Executive and their permitted successors and assigns shall have any rights or
remedies under or by reason of this Agreement.
11.16 Acknowledgment. The Executive acknowledges that she has
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had the opportunity to discuss this matter with and obtain advice from her own
attorney if so desired, has had sufficient time to, and has carefully read and
fully understands, all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
11.17 Entire Agreement; Amendment. This Agreement with the
---------------------------
exhibits expressly referred to herein is intended by Company and Executive as
the final expression and the complete and exclusive statement of their agreement
with respect to the terms included in this Agreement and any prior or
contemporaneous agreements or understandings, oral or written, which may
contradict, explain or supplements these terms shall not be admissible or
effective for any purpose. This Agreement may not be amended or modified except
by a writing signed by Company and Executive which expressly states that it
amends this Agreement.
WITNESS WHEREOF, Company and Executive have executed this
Agreement as of the date first set forth above.
"COMPANY' "EXECUTIVE"
--------- ---------
Nutrastar Incorporated a Nevada corporation
-12-
By: /s/ Xxxxxxxx XxXxxx /s/ Xxxxxxxx XxXxxx
--------------------------- ---------------------------
Xxxxxxxx XxXxxx, an individual
Name: Xxxxxxxx XxXxxx
---------------------------
Title: President and CEO
---------------------------
-13-
Exhibit "A"
CONFIDENTIAL INFORMATION AGREEMENT
Please read carefully: this document contains assignments of inventions
and copyrights, and other important provisions relating to legal rights.
This Confidential Information Agreement (the "Agreement") is entered
into as of November 1, 1999, between NutraStar, a Nevada corporation. (the
"Company") and Xxxxxxxx XxXxxx (referred to below as "I").
While serving as an employee, independent contractor, director or other
capacity with the Company (referred to, as the case may be, as "relationship"
below), I may have access to information about the Company or its business. I
acknowledge that the Company has a legitimate interest in keeping this
information confidential in order to maximize the Company's business
opportunities. I confirm my intention to protect this information against
unauthorized use. Therefore, in consideration of my relationship with the
Company and other legal and adequate consideration, the receipt of which is
hereby acknowledged, I agree for the benefit of the Company that:
l. Provisions Related to Trade Secrets
-----------------------------------
(a) Proprietary Information. As used in this Agreement, "Proprietary
-----------------------
Information" means the following, whether now or later owned or existing,
whether or not marked "confidential," and however embodied or stored: (1) any
information (including without limitation any formula, pattern, compilation,
program, device, method, technique or process) relating to or owned by the
Company that derives independent economic value, actual or potential from not
being generally known to the public or to other persons who can obtain economic
value from its disclosure or use, and (2) any other invention, trade secret,
knowledge or information pertaining to the Company or the Company's existing
or prospective businesses, customers, suppliers, and others with whom the
Company does or intends to do business, which relates to products, services,
processes, know-how, designs, formulas, methods, work in process, improvements,
discoveries, plans for research, software programs, source or object codes,
algorithms, data, techniques, marketing, selling, business plans, budgets,
unpublished financial statements, licenses, prices, costs, employee skills or
compensation, or other matters.
(b) Trust. I acknowledge that the Company possesses and will continue
-----
to develop and acquire valuable Proprietary Information, including information.
that I may develop or discover as a result of my relationship with the
Company. The value of that Proprietary relationship information depends on it
remaining confidential. The Company depends on me to maintain that
confidentiality, and I accept that position of trust.
(c) Prohibited Use/Disclosure I will not disclose or use at any time,
-------------------------
either during or after my relationship with the Company, any Proprietary
Information except for the exclusive benefit of the Company as required by my
duties for the Company, or as the Company expressly may consent to in writing. I
will cooperate with the Company and use my best efforts to prevent
1
the unauthorized disclosure, use or reproduction of Proprietary Information,
except as expressly authorized by the Company.
(d) Return of information. Upon the end of my relationship with the
---------------------
Company for any reason, I immediately will deliver to the Company all
tangible, written, graphical machine readable and other materials (including
all copies) in my possession or under my control containing or disclosing
Proprietary Information.
(e) Waivers. I waive all claims and defenses I might otherwise have to
-------
assert that the Company's procedure or lack of procedure to protect Proprietary
Information lessens or excuses any duty I have expressly agreed to in this
Agreement. I further waive any right I might otherwise have to assert or claim
that any acts or omissions of the Company outside this Agreement constitute a
set off counterclaim or defuse to any rights the Company has under this
Agreement.
(f) Other Agreements. I agree that I will not directly or indirectly
----------------
commit or cause a violation or breach of the Company's nondisclosure obligations
under any agreement to which the Company may be or become a party. I will comply
with the confidentiality provisions of, and execute such confidentiality forms
as may be required under, any contracts between he Company and parties
contracting with the Company.
2. Ownership of Inventions
-----------------------
(a) Inventions. As used in this Agreement, the term "inventions"
----------
includes, but is not limited to, all inventions, original works of authorship,
ideas, patterns, devices, techniques, discoveries, improvements, processes,
developments, designs, know-how, data, programs, formulas, source and object
codes, methods, diagrams, technology and trade secrets, whether or not reduced
to practice or the subject of any governmental filings.
(b) Assignment to Company. I agree to communicate to the Company as
---------------------
promptly and fully as practicable all Inventions conceived or reduced to
practice by me (alone or jointly by others) at any time during my relationship
with the Company. I hereby assign to the Company and/or its nominees all my
right, title and interest in such Inventions, and all my right, title and
interest in any patents, copyrights, mask work rights, trademarks, and service
marks, and all applications, registrations, and other filings or rights related
thereto on a worldwide basis (collectively referred to for convenience as
"Proprietary Filings"). I will assist the Company and/or its nominees (without
charge but at no expense to me) at any time and in every lawful way to obtain
for its and/or their own, benefit, all Proprietary Filings for all such
Inventions anywhere in the world and to enforce its and/or their rights in legal
proceedings.
(c) Labor Code Exception. Any provision in this Agreement requiring me
--------------------
to assign my rights in any Invention does not apply to an Invention which
qualifies under title provisions of Section 2870 of the California Labor Code.
That section provides that the requirement to assign. "shall not apply to an
invention that the employee developed entirely on his or her own time without
using the employer's equipment, supplies, facilities, or trade secret
information except for those inventions that either (1) relate at the time of
conception or reduction to practice of the
2
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer; or (2) result from any work performed
by the employee for the employer. I understand that I bear the burden of proving
that an Invention qualifies under Section 2870.
(d) U.S. Contracts. Notwithstanding the foregoing, I also assign to the
--------------
Company (or to any of its nominees) all rights which I may have or acquire
any Invention, full title to which is required to be in the United States by a
contract between the Company and the United States or any of its agencies.
(e) Power of Attorney. I hereby irrevocably designate and appoint the
-----------------
Company and each of its duly authorized officers and agents as my agent and
attorney-in-fact to act for and in my behalf and stead to execute and file any
document and to do all other lawfully permitted acts to further the
prosecution, issuance and enforcement of Proprietary Filings wish the same force
and effect as if executed and delivered by me.
(f) List of Excluded Inventions. I have attached hereto as Exhibit A a
---------------------------
complete list of all Inventions that I consider to be my property or owned by
others and that I wish to exclude from this Agreement (with only generic
listings if specific disclosure would violate any prior agreement). If no items
are listed, I agree that there are no such items.
3. Other Promises
--------------
(a) No Competition During My Relationship with the Company. During my
------------------------------------------------------
relationship with the Company, I will not, without the Company's express written
consent, engage in any employment or business other than for the Company, or
cause or assist (in any manner) in the formation or operations of any business
competitive with or similar to the existing or future business of the Company.
(b) No Solicitation/Use of Proprietary Information. I agree that during
----------------------------------------------
my relationship with the Company, and for one (1) year following its termination
by me or by the Company, I will not: (1) directly or indirectly, alone or
working for others, solicit business as to products or services similar to the
products or services of the Company from any of the Company's customers or
prospective customers with whom I have had any contact prior to the end of my
relationship with the Company, or (2) solicit for employment any person
employed by the Company (or its affiliates or successors). I agree that the
identity of the Company's suppliers and customers and the related terms of
dealing constitute trade secrets of the Company and that the foregoing promise
is a reasonable means of protecting the Company's trade secrets from the
inevitable disclosure that would result from a violation of the foregoing
covenants.
(c) No Conflict with Other Agreements. My relationship with the Company
---------------------------------
and my compliance with this Agreement do not and will not breach any agreement
to keep in confidence information acquired by me prior to or outside of my
relationship with the Company. I have not brought and will not bring with me
to the Company for use in the performance of my duties at the Company any
materials, documents or information of a former employer or any third party that
are not generally available to the public unless I have obtained (and first
given to the
3
Company) express written authorization from the owner for their possession and
use by or for the Company. I will not use or disclose to the Company during my
relationship with the Company any information if that use or disclosure would
cause me to violate any contractual or legal duty to any third party. I have not
entered into, and will not enter into, any agreement, either oral or written, in
conflict with this Agreement. I am not obligated under any contract or other
agreement, or subject to any judgment; decree or order of any court or
administrative agency, that would interfere with the use of my best efforts to
promote the interests of the Company or that would conflict with the Company's
existing or proposed business known to me.
4. General
-------
(a) Amendment. My obligations under this Agreement may not be modified
---------
or terminated, in whole or is part, except in a writing signed by the President
of the Company. Any waiver by the Company of a breach of any provision of this
Agreement wi11 not operate or be construed as a waiver of any subsequent breach.
(b) Severability/Interpretation. Each provision of this Agreement will
---------------------------
be treated as a separate and independent clause, and the unenforceability of any
one provision will in no way impair the enforceability of any other provision.
If any provision is held to be unenforceable, such provision will be construed
by the appropriate judicial body by limiting or reducing it to the minimum
extent necessary to make it legally enforceable. If any provision hereof is
considered unclear or ambiguous, it shall not be construed against the Company
but instead shall be construed to give effect to the interests of the Company
consistent with the specific provisions of this Agreement.
(c) Survival of My Obligations. My obligations under this Agreement
--------------------------
will survive the termination of my employment or other relationship and any
other contract with the Company, regardless of the cause, lack of cause, or
manner of such termination. This Agreement will inure to the benefit of and be
binding upon the successors and assigns of the Company.
(d) No Implied Terms. I understand that the provisions of this
----------------
Agreement are a material condition to my relationship with the Company. I also
understand that this Agreement is not an employment contract and nothing in this
Agreement shall create or imply (1) any right to require the Company to employ
or continue to employ me, or otherwise enter into or continue any contract with
me, (2) any particular terms of employment or other relationship, or (3) any
limitation on the right of the Company or me to end my employment or other
relationship.
(e) Remedies and Attorneys' Fees. Any breach of this Agreement likely
----------------------------
will cause irreparable harm to the Company for which money damages could not
reasonably or adequately compensate the Company. Accordingly, I agree that the
Company will be entitled to a court order of specific performance of this
Agreement and injunctive relief to enforce this Agreement, in addition to
damages and other remedies available to the Company by contract or by law. If
any action or proceeding shall be commenced to enforce this Agreement or any
right arising in connection with this Agreement; the prevailing party in such
action or proceeding shall be entitled to recover from the other party, the
reasonable attorneys' fees, costs and expenses
4
incurred by such prevailing party in such action and any related appeals,
bankruptcy, collection or enforcement proceedings.
(f) Applicable Law. This Agreement will be governed by and
--------------
interpreted in accordance with the laws of the State of California governing a
contract made in and between residents of California and wholly performed within
California.
(g) Complete Agreement. This Agreement contains the complete agreement
------------------
between the Company and me concerning the subject matter hereof and supersedes
all other and written or oral understandings. This Agreement maybe executed in
counterparts.
/s/ Xxxxxxxx XxXxxx
----------------------------------
(Signature)
Xxxxxxxx XxXxxx
----------------------------------
(Print Name)
AGREED AND ACKNOWLEDGED:
NutraStar
By: /s/ Xxxxxxxx XxXxxx
-----------------------
5
EXHIBIT "A"
LIST OF PRIOR INVENTIONS
------------------------
Title Date Identifying Number
----- ---- or Brief Description
--------------------
1. A Method for Treating Patent Application - Attorney
Hypercholesterolemia; Docket #018912-000310
Hyperlipidemia and Atherosclerosis Claim Allowed -
Application # 09/143,159
2. A Method for Treating Diabetes. Patent Application -
Hyperglycemia and Hypoglycemia Attorney Docket # 018912-
000110 PC
6
