Exhibit 10.8
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT ("Agreement"), dated as of June 1, 1998, between
GLOBAL HEALTH SCIENCES, INC., a Delaware corporation (the "Company"), and Xxxxxx
Xxxxx (the "Executive").
WITNESSETH:
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WHEREAS, The Company is engaged in the business of manufacturing dietary
and nutritional supplements in the United States and throughout the world (the
"Business"); and
WHEREAS, The Company desires to retain the services of the Executive in the
capacity of Chief Operating Officer of the Company, and Executive desires to
provide such Company, and Execute such services in such capacity to the Company,
on the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and obligations hereinafter set forth, the parties, hereto, intending
to be legally bound, hereby agree as follows:
1. EMPLOYMENT AND TERM.
(a) The Company hereby employs the Executive, and the Executive
hereby accepts employment by the Company, in the capacities and on the terms and
subject to the conditions set forth herein from June 1, 1998, until May 31,
2001 unless terminated earlier as
provided herein (the "Term of Employment"). At least ninety (90) days prior to
the expiration of the Term of Employment, the Company shall notify the
Executive if, and under what terms and conditions, the Company will offer to
extend the Term of Employment.
2. DUTIES. During the Term of Employment, the Executive shall serve as
the Company's Chief Operating Officer. The Executive shall report to the Chief
Executive Officer of the Company.
3. COMPENSATION AND BENEFITS. As full and complete compensation to the
Executive for his execution and delivery of this Agreement and performance of
the services required hereunder, the Company shall pay, grant or provide the
Executive, and the Executive agrees to accept, the following salary and other
compensation and benefit:
(a) an annual base salary, payable in accordance with the Company's
standard payroll practices for senior executive officers of $225,000.00
per annum ("Base Salary");
(b) an annual bonus, payable with respect to each full fiscal year of the
Company during the Term of Employment, or PRO RATA portion thereof, in each case
based upon the performance of the Company for each applicable full fiscal year
of the Company and otherwise as determined by the Board of Directors of the
Company, in effect from time to time;
(c) a key man life insurance policy with a face amount of $500,000 for the
benefit of the estate of the Executive;
(d) the right to participate in any medical, dental, disability,
retirement, insurance, savings, vacation, holiday, paid sick leave or other
plans as in effect from time to time for the benefit of the company's senior
executive officers;
(e) an annual automobile allowance, payable in equal monthly installments
during the
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Term of Employment, of $850.00 per month;
(f) prompt reimbursement for all reasonable business-related expenses
incurred by the Executive, in accordance with the policies and procedures of the
Company as in effect from time to time for senior executive officers; and
(g) paid vacation in accordance with the policies and procedures of the
Company as in effect from time to time for senior executive officers.
4. TERMINATION.
(a) Disability. In the event of any physical or mental disability
during the Term of Employment which renders the Executive incapable of
performing the services required of him for any period or periods aggregating
three months during any twelve-month period, the Company shall have the right,
upon written notice to Executive, to terminate the Executive's employment
hereunder, effective upon the giving of such notice (or such later date as
shall be specified in such notice). Upon such termination, the Company
shall have no further obligations hereunder, except to pay the Executive his
Base Salary prorated to the effective date of termination or provide the
Executive any benefits to which the Executive may otherwise have been
entitled but for the Executive's disability prorated to the effective date of
termination.
(b) Death. In the event of the death of the Executive during the Term
of Employment, this Agreement shall automatically terminate and the Company
shall have no further obligations hereunder, except to pay the Executive's
beneficiary or legal representative the Base Salary prorated to the date of
death.
(c) Cause. The Company shall have the right, upon written notice to the
Executive, to terminate the Executive's employment under this Agreement for
Cause (as hereinafter defined),
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effective upon the giving of such notice (or such later date as shall be
specified in such notice), and the Company shall have no further obligations
hereunder, except to pay the Executive his Base Salary prorated to the
effective date of termination, and the Executive shall continue to have the
obligations provided for in Sections 6 and 7 hereof.
For purposes of this Agreement, "Cause" means:
(i) fraud, embezzlement, gross insubordination on the part of
the Executive or any act of moral turpitude or misconduct by the Executive.
(ii) conviction of or the entry of a plea of NOLO CONTENDERE by
the Executive for any felony; or
(iii) a material breach of, or the willful failure or refusal by
the Executive to perform and discharge, his duties, responsibilities or
obligations under this Agreement.
(d) WITHOUT CAUSE. The Company shall have the right to terminate the
Executive's employment under this Agreement without Cause and upon written
notice, in which case the Executive's employment under this Agreement shall
terminate on the date specified in such notice (except that the Executive shall
continue to have the obligations provided for in Sections 6 and 7) and the
Company shall have no further obligations hereunder, except to pay the Executive
(i) his Base Salary prorated to the effective date of termination and (ii) one
year severance pay equal to his annual Base Salary at the time of termination.
(e) CHANGE OF CONTROL. The Executive shall have the right to terminate
his employment under this Agreement upon a Change of Control (as hereinafter
defined) upon at least three months' prior written notice thereof to the Company
given within 30 days of the first occurrence
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of any event constituting a Change of Control, in which case the Executive's
employment under this Agreement shall terminate on the date specified in such
notice. In the event of any termination of employment by the Executive upon a
Change of Control, the Executive shall have no further obligations under this
Agreement other than the obligations provided for in Sections 6 and 7 hereof.
The failure by the Executive to give such written notice in such 30-day period
shall preclude the Executive from terminating his employment upon a Change of
Control with respect to such occurrence. In the event of any termination of
employment by the Executive upon a Change of Control, the Company shall have no
further obligations hereunder, except to pay the Executive (i) his Base Salary
prorated to the effective date of termination, (ii) one year severance pay equal
to his annual Base Salary at the time of termination and (iii) if such
termination occurs after Executive has received an annual bonus pursuant to
the terms hereof, and additional payment equal to his most recently received
annual bonus prorated to the effective date of termination. It is understood
and agreed that, during the three month period following the Executive's
delivery of notice of termination to the Company upon a Change of Control, the
Executive shall cooperate fully with the Company to effect the orderly transfer
of the Executive's duties to another person or persons. Notwithstanding
anything to the contrary contained herein, upon receipt of the Executive's
notice of termination upon a Change of Control, the Company shall have the right
to cause the Executive's termination to become effective prior to the end of the
three-month period or the date specified in the notice therefor by giving at
least two business days' notice thereof to the Executive.
For purposes of this Agreement, a "Change of Control" means the
occurrence of any one of the following events: (a) a change in control of the
direction and administration of the
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Company's business of a nature that would be required to be reported in response
to Item 6(c) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on the date
hereof and any successor provision of the regulations under the Exchange Act,
(b) the approval by the Board of Directors of a sale of all or substantially all
of the assets of the Company to any unrelated third party and the consummation
of such transaction or (c) the consummation of any merger, consolidation, or
like business combination or reorganization of the Company, approved by the
Board of Directors of the Company, which would result in the occurrence of an
event described in clause (a) above or a change in the Board of Directors so
that during any period of two (2) consecutive years, the individuals who at the
beginning of such period constitute the Board of Directors or any individuals
who would be "Continuing Directors" (as hereinafter defined) cease for any
reason to constitute at least a majority thereof.
For purposes of this Agreement, "Continuing Directors" shall mean the
directors of the Company in office on the date hereof and any successor to any
such director and any additional director, who after the date hereof (i) was
nominated or selected by a majority of the Continuing Directors in office at the
time of his nomination or selection and (ii) is not an "affiliate" or
"associate" (as defined in Regulation 12B under the Exchange Act) at the time of
his nomination or selection of any person who is the beneficial owner, directly
or indirectly, of securities representing ten percent (10%) or more of the
combined voting power of the Company's outstanding securities then entitled
ordinarily to vote for the election of directors.
5. RESIGNATION UPON TERMINATION. Upon the termination of the
Executive's employment hereunder for any reason the Executive agrees that he
shall immediately resign from
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all offices and directorships held by him in the Company or any of its
subsidiaries or affiliates and agrees to execute any and all documents
reasonably necessary to effect such resignations as requested by the Company.
6. CONFIDENTIALITY; OWNERSHIP OF DEVELOPMENTS.
(a) During the Term of Employment and for any time thereafter, the
Executive shall keep secret and retain in strictest confidence and not divulge,
disclose, discuss, copy or otherwise use or suffer to be used in any manner,
except in connection with the Business of the Company and of any of the
subsidiaries or affiliates of the Company, any trade secrets, confidential or
proprietary information and all other knowledge, know-how, information,
documents or materials owned, developed or possessed by the Company or any of
the subsidiaries or affiliates of the Company, whether in tangible or intangible
form, pertaining to the Business of the Company or any of the subsidiaries or
affiliates of the Company.
(b) The Executive acknowledges that all developments, including, without
limitation, formulas, inventions (patentable or otherwise), discoveries,
improvements, patents, trade secrets, designs, reports, computer software, flow
charts and diagrams, procedures, data, documentation, ideas and writings and
applications thereof relating to the Business or planned business of the Company
or any of the subsidiaries or affiliates of the Company that, alone or jointly
with others, the Executive may conceive, create, make, develop, reduce to
practice or acquire during the Term of Employment (collectively, the
"Developments") are works made for hire and shall remain the sole and exclusive
property of the Company and the Executive hereby assigns to the Company all of
his right, title, and interest in and to all such Developments.
(c) The provisions of the Section 6 shall, without any limitation as to
time, survive
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the expiration or termination of the Executive's employment hereunder,
irrespective of the reason for any termination.
7. COVENANT NOT TO COMPETE. The Executive agrees that during the Term of
Employment and for a period of one year commencing upon the expiration of
termination of the Executive's employment hereunder, the Executive shall not,
directly or indirectly, without the prior written consent of the Company:
(a) solicit, entice, persuade or induce any employee, consultant, agent or
independent contractor of the Company or any of the subsidiaries or affiliates
of the Company to terminate his or her employment or engagement with the Company
or such subsidiary or affiliate, to become employed by any person, firm or
corporation other than the Company or such subsidiary or affiliate or approach
any such employee, consultant, agent, or independent contractor for any of the
foregoing purposes, or authorize or assist in the taking of any such actions by
any third party; or
(b) directly or indirectly own, manage, control, invest or participate in
any way in, consult with, be employed by, or render services for (whether as a
director, consultant or otherwise) any person or entity (other than the Company
or any of the subsidiaries or affiliates of the Company) engaged in the business
of manufacturing or distributing dietary and nutritional supplements.
8. SPECIFIC PERFORMANCE. The Executive acknowledges that the services to
be rendered by the Executive are of a special, unique and extraordinary
character and, in connection with such services, the Executive will have access
to confidential information vital to the Company's Business and the subsidiaries
and affiliates of the Company. By reason of this, the
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Executive consents and agrees that if the Executive violates any of the
provisions of Sections 6 or 7 hereof, the Company and the subsidiaries and
affiliates of the Company would sustain irreparable injury and that monetary
damages will not provide adequate remedy to the Company and that the Company
shall be entitled to have Sections 6 or 7 specifically enforced by any court
having equity jurisdiction. Nothing contained herein shall be construed as
prohibiting the Company or any of the subsidiaries or affiliates of the Company
from pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of damages from the Executive.
9. ENTIRE AGREEMENT. This Agreement embodies the entire agreement of the
parties with respect to the Executive's employment and supersedes any other
prior oral or written agreements, arrangements or understandings between the
Executive and the Company. This Agreement may not be changed or terminated
orally but only by an agreement in writing signed by the parties hereto.
10. GOVERNING LAW: JURISDICTION.
(a) This Agreement shall be subject to, and governed by, the laws of the
State of California applicable to contracts made and to be performed therein.
(b) Any action to enforce any of the provisions of this Agreement shall be
brought in a court of the State of California located in Los Angeles County or
in a Federal court located in Los Angeles, California. The parties consent to
the jurisdiction of such courts and to the service of process in any manner
provided by California law. Each party irrevocably waives any objection which
it may now or hereafter have to the venue of any such suit, action or proceeding
brought in such court.
(c) The prevailing party in any action to enforce any of the provisions of
this
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Agreement shall be entitled to reimbursement from the other party for its or his
costs and expenses (including attorneys fees and expenses) incurred in
connection with such action.
11. ASSIGNABILITY. The obligations of the Executive may not be delegated
and the Executive may not, without the Company's written consent thereto,
assign, transfer, convey, pledge, encumber, hypothecate or otherwise dispose of
this Agreement or any interest herein. Any such attempted delegation or
disposition shall be null and void and without effect. The Company and the
Executive agree that this Agreement and all of the Company's rights and
obligations hereunder may be assigned or transferred by the Company to any
subsidiary or successor to the Company.
12. SEVERABILITY. If any provision of this Agreement or any part thereof,
including, without limitation, Sections 6 and 7, as applied to either party or
to any circumstances shall be adjudged by a court of competent jurisdiction to
be void or unenforceable, the same shall in no way affect any other provision of
this Agreement or remaining part thereof, which shall be given full effect
without regard to the invalid or unenforceable part thereof, or the validity or
enforceability of this Agreement.
If any court construes any of the provisions of Section 6 or 7, or any part
thereof, to be unreasonable because of the duration of such provision or the
geographic scope thereof, such court may reduce the duration or restrict or
redefine the geographic scope of such provision enforce such provision as so
reduced, restricted or redefined.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first written above.
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GLOBAL HEALTH SCIENCES, INC.
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer
/s/ XXXXXX XXXXX
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Xxxxxx Xxxxx
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