the following reasons: (i) Employee fails to substantially perform his duties hereunder (other than any such failure due to his physical or mental illness), and such l failure is not remedied within ten (10) business days after written notice from the Company’s board of directors, which written notice shall state that failure to remedy such conduct may results in an involuntary termination for Cause; (ii) Employee engages in willful and serious misconduct (including, but not limited to, an act of fraud or embezzlement) that has caused or is reasonably expected to result in material injury to the Company or any of its Affiliates; (iii) Employee is convicted of or enters a plea of guilty or nolo contendere to a: (A) crime that materially adversely affects his ability to perform his duties on behalf of the Company; or (B) felony; (iv) Employee engages in alcohol or substance abuse which adversely affects his ability to perform his duties; or (v) Employee willfully breaches any of his obligations hereunder or under any other agreement between himself and the Company, and such willful breach is not remedied within ten (10) business days after written notice from the Company’s board of directors, which written notice shall state that failure to remedy such conduct may result in an involuntary termination for Cause.
ARTICLE III
COMPENSATION AND BENEFITS
3.1 Compensation. During Employee’s employment, the Company shall pay Employee such salary, bonus and other benefits and awards as set forth on Exhibit A.
3.2 Payment. Except as otherwise provided herein, all compensation shall be payable in intervals in accordance with the general payroll payment practice of the Company. The compensation shall be subject to such withholdings and deductions by the Company as are required by law.
3.3 Vacation. The Employee shall be entitled to receive four (4) weeks of personal time off (“PTO”) each year of the Employment Term (prorated for fractional years).
3.4 Other Benefits. Employee shall be entitled to participate in any retirement, pension, profit-sharing, stock option, health plan, insurance, disability income, incentive compensation and welfare or any other benefit plan or plans of the Company which may now or hereafter be in effect and for which the Employee is eligible or for which all executives in general are eligible. Notwithstanding the forgoing, the Company shall be under no obligation to institute or continue the existence of any such benefit plan.
ARTICLE IV
CONFIDENTIALITY, NON-SOLICITATION, NON-COMPETE
AND QUIT CLAIM AGREEMENT
4.1 Non-Disclosure of Confidential Information. Employee hereby acknowledges and agrees that, as of a result of the employment hereunder, Employee will acquire, develop, and use information that is not generally known to the public or to the Company’s industry, including but not limited to, certain records, phone locations, documentation, software programs, email and mobile strategies, price lists, customer lists, contract prices for the Company’s services, business plans and prospects of the Company, equipment configurations, ledgers and general information, employee records, mailing lists, accounts receivable and payable ledgers, financial and other
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records of the Company or its affiliates, and other similar matters, as well as any information disclosed to the Company by any third party under which the Company has a confidentiality obligation to the third party (all such information pertaining to the Company, its affiliates or disclosed to Company under confidentiality from third parties being hereinafter referred to as “Confidential Information”). Employee further acknowledges and agrees that the Confidential Information is of great value to the Company and its affiliates and that the restrictions and agreements contained in this Agreement are reasonably necessary to protect the Confidential Information and the goodwill of the Company. Accordingly, Employee hereby agrees that:
(a) Employee will not, while employed by the Company or for three years thereafter, directly or indirectly, except in connection with Employee’s performance of the duties under this Agreement, or as otherwise authorized in writing by the Company for the benefit of the Company or its “Affiliates” (as hereinafter defined), divulge to any person, firm, corporation, limited liability company, or organization, other than the Company or its Affiliates (hereinafter referred to as “Third Parties”), or use or cause or authorize any Third Parties to use, the Confidential Information, except as required by law; and
(b) Upon the termination of Employee’s employment for any reason whatsoever, Employee shall deliver or cause to be delivered to the Company any and all Confidential Information, including drawings, notebooks, notes, records, keys, disks data and other documents and materials belonging to the Company or its Affiliates which is in his possession or under his control relating to the Company or its Affiliates or abstracts therefrom, regardless of the medium upon which it is stored, and will deliver to the Company upon such termination of employment any other property of the Company or its Affiliates which is in his possession or control.
4.2 Non-Solicitation Covenant. Employee hereby covenants and agrees that while employed by the Company and for a period of two (2) years following the termination of the Employee’s employment with the Company for any reason, Employee shall not: (i) directly or indirectly, endeavor to entice away from the Company or its Affiliates any person, firm, corporation, limited liability company or other entity that was a customer of the Company at any time while Employee was an employee of the Company or its Affiliates or who is a “prospective vendor or customer” of the Company; or (ii) induce, attempt to induce or hire any employee (or any person who was an employee during the year preceding the date of any solicitation) of the Company or its Affiliates to leave the employ of the Company or its Affiliates or to otherwise perform services directly or indirectly for others, or in any way interfere with the relationship between any such employee and the Company or its Affiliates. For purposes hereof, “prospective vendor or customer” shall mean any person or entity which has been solicited for business by Employee or any officer or other employee of the Company or its Affiliates at any time during Employee’s employment.
4.3 Non-Competition Covenant. Employee acknowledges that the covenants set forth in this Section 4.3 are reasonable and are granted in part in consideration of the new management team of the Company to join the Company and arrange for Employee to be a substantial shareholder. Employee also acknowledges that the enforcement of the covenants set forth in this Section 4.3 will not preclude Employee form being gainfully employed in such manner and to the extent as to provide a standard of living for himself, the members of his family and the others dependent upon him of at least the level to which he and they have become accustomed and may
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expect. Employee hereby agrees that he shall not, during his employment and for a period of two (2) years after the end of his employment directly or indirectly, engage in any proprietorship, partnership, firms trust, company, limited liability company or other entity, other than the Company (whether as owner, partner, trustee, beneficiary, stockholder, member, officer, director, employee, independent contractor, agent, servant, consultant, manager, lessor, lessee, or otherwise) that competes with the Company in the Business of the Company in the Restricted Territory (as defined herein), other than acquiring an ownership interest in a company listed on a recognized Stock exchange in an amount which does not exceed five percent (5%) of the outstanding Stock of such corporation. For purposes of this Agreement: (i) the term “Business of the Company” shall include all business activities and ventures in which the Company is engaged in from time to time, including but not limited to the sale of nutraceutical products, provided in no event shall the sale of any liquid oxygen products be deemed a violation of any of the restrictive covenants contained herein; and (ii) the term “Restricted Territory” means any state in the United States of America.
4.4 Remedies.
(a) Injunctive Relief. Employee expressly acknowledges and agrees that a violation of any of the provisions of Sections 4.1, 4.2 or 4.3 could cause immediate and irreparable harm, loss and damage to the Company not adequately compensable by a monetary award. Employee further acknowledges and agrees that the time periods and territorial areas provided for herein are reasonable in order to adequately protect the Business of the Company, the enjoyment of the Confidential Information and the goodwill of the Company. Without limiting any of the other remedies available to the Company at law or in equity, or the Company’s right or ability to collect money damages, Employee agrees that any actual or threatened violation of any of the provisions of Sections 4.1, 4.2, or 4.3 may be immediately restrained or enjoined by any court of competent jurisdiction, injunction may be issued in any court of competent jurisdiction, without notice and without bond. Notwithstanding anything to the contrary contained in this Agreement, the provisions of this Article IV shall survive the termination of Employee’s employment.
(b) Enforcement: It is the desire of the parties that the provisions of Sections 4.1, 4.2, or 4.3 be enforced to the fullest extent permissible under the laws and public policies in each jurisdiction in which enforcement might be sought. Accordingly, if any particular portion of Sections 4.1, 4.2 or 4.3 shall ever be adjudicated as invalid or unenforceable, or if the application thereof to any party or circumstance shall be adjudicated to be prohibited by or invalidated by such laws or public policies, such section or sections shall be: (i) deemed amended to delete there from such portions so adjudicated; or (ii) modified as determined appropriate by such a court, such deletions or modifications to apply only with respect to the operation of such section or sections in the particular jurisdictions so adjudicating on the parties and under the circumstances as to which so adjudicated.
(c) Legal Fees. In any action to enforce the terms of this Agreement, the prevailing party shall be entitled to reimbursement from the other party of reasonable legal fees and costs.
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4.5 Company. All references to the Company in this Article IV shall include “Affiliates” of the Company, as that term is construed under Rule 405 of the Securities Act of 1933, as amended.
4.6 Quit Claims. By execution of this Agreement, Employee: (i) assigns and quit claims to the Company all right, title and interest as relates to the Business of the Company in any patentable or potentially patentable invention or design within the meaning of Title 35 of the United States Code, and any utility or design created or discovered by the Employee during the course of his employment with the Company; and (ii) agrees that if during the course of his employment by the Company, he discovers, invents or produces, without limitation, any information, formulae, product, device, software, system, technique, drawing, program or process, which is a “trade secret” within applicable law or deemed to be such in the opinion of the Company’s board of directors, such information formulae, product, device, system, technique, drawing, program or process shall be assigned to the Company. Employee agrees to fully cooperate with the Company in: (A) protecting the value and secrecy of any such trade secrets, and further agrees to execute any and all documents the Company deems necessary to document any such assignment to the Company; and (B) Employee designates the Company his attorney-in-fact to execute any documents the Company may deem necessary that relates to any such trade secret or assignment thereof to the Company.
Notwithstanding anything to the contrary herein, this Agreement does not apply to any invention (“Employee Owned Invention(s)”) for which no equipment, supplies, facility or trade secret information of the Company was used and which was developed entirely on the Employee’s own time, unless: (a) the invention relates: (i) to the Business of the Company; or (ii) to the Company’s actual research or development; or (b) the invention results from any work performed by the Employee for the Company. Except as noted on the signature page hereof, Employee claims no right in any inventions as of the date hereof.
ARTICLE V
MISCELLANEOUS
5.1 Notices. All notices or other communications required or permitted hereunder shall be in writing addressed to the last known address of the Party entitled to notice and shall be deemed given, delivered and received: (a) when delivered, if delivered personally; (b) four (4) days after mailing, when sent by registered or certified mail, return receipt requested and postage prepaid; (c) one (1) business day after delivery to a private courier service, when delivered to a private courier service providing documented overnight service; and (d) on the date of delivery if delivered by telecopy, receipt confirmed, provided that a confirmation copy is sent on the next business day by first class mail, postage prepaid, in each case addressed as follows:
| | |
| To Employee at:
| The address set forth on the signature page hereof.
|
| | |
| To Company at:
| Emergent Health Corp
|
| | 2424 N. Federal Highway
|
| | Boca Raton, Florida 33431
|
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Any party may change its address for purposes of this paragraph by giving the other party written notice of the new address in the manner set forth above.
5.2 Entire Agreement; Amendments, Etc. This Agreement contains the entire agreement and understanding of the parties hereto, and supersedes all prior agreements and understandings relating to the subject matter hereof. Except as provided in Section 4.4(b) above, no modification, amendment, waiver or alteration of this Agreement or any provision or term hereof shall in any event be effective unless the same shall be in writing, executed by both parties hereto, and any waiver so given shall be effective only in the specific instance and for the specific purpose for which given.
5.3 Benefit. This Agreement shall be binding upon, and inure to the benefit of, and shall be enforceable by, the heirs, successors, legal representatives and permitted assignees of Employee and the successors, assignees and transferees of the Company. This Agreement or any right or interest hereunder may not be assigned by Employee without the prior written consent of the Company.
5.4 No Waiver. No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder or pursuant hereto shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder or pursuant thereto.
5.5 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law but, if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provision of this Agreement. If any part of any covenant is unenforceable or the making of any covenant hereunder is unenforceable, the parties hereto agree, and it is their desire, that the court shall substitute a judicially enforceable limitation in its place, and that as so modified this Agreement, as so modified, shall be binding upon the parties as if originally set forth herein.
5.6 Compliance and Headings, Counsel. Time is of the essence of this Agreement. The headings in this Agreement are intended to be for convenience and reference only, and shall not define or limit the scope, extent or intent or otherwise affect the meaning of any portion hereof. This Agreement has been prepared by Taft, Stettinius & Hollister (“Taft”) in its capacity as counsel for Employee. The parties acknowledge that following the date of execution of this Agreement, Employee may be in a control position of the Company and may request Taft to provide certain services for the benefit of the Company. By execution of this Agreement, Company acknowledges that it has retained separate counsel with respect to this Agreement and the issues set forth in this Section 5.6, and further agrees that following the date hereof, should it elect to retain Taft as counsel, that it is aware of the conflict of interest with respect to Taft’s prior representation of Employee, and that both it and Employee will consent to Taft’s ongoing representation of the Company despite the conflict of interest with respect to which it has been advised. Both parties are aware that should a dispute arise in the future between Employee and the Company, Taft may elect to represent neither of the parties with respect to such dispute,
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which could result in both parties incurring greater legal expense than in retaining Taft as counsel.
5.7 Arbitration. If there is any dispute between the parties concerning any matter relating to this Agreement, the exclusive basis for adjudication of this Agreement (except with respect to the performance of the covenants and obligations as set forth in Article IV above) shall be by arbitration as detailed herein. Either party may submit the dispute to binding arbitration. Any such arbitration proceeding will be conducted in Cook County, Illinois and except as otherwise provided in this Agreement, will be conducted under the auspices of JAMS/Mediation, Inc., in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association. The arbitrator shall allow such discovery as the arbitrator determines appropriate under the circumstances. The arbitrator shall determine which party, if either, prevailed and shall award the prevailing party its costs. Each party will bear his, her or its respective attorneys’ fees. The award and decision of the arbitrator shall be conclusive and binding on all parties to this Agreement and judgment on the award may be entered in any court of competent jurisdiction. The parties acknowledge and agree that any arbitration award may be enforced against either or both of them in a court of competent jurisdiction and each waives any right to contest the validity or enforceability of such award. The parties further agree to be bound by the provisions of any statute of limitations which would be applicable in a court of law to the controversy or claim which is the subject of any arbitration proceeding initiated under the Agreement. The parties further agree that they are entitled in any arbitration proceeding to the entry of an order, by a court of competent jurisdiction pursuant to an opinion of the arbitrator, for specific performance of any of the requirements of this Agreement.
In any action to enforce any of the provisions of Article IV hereof, the action shall be litigated in the state or federal courts situated in Cook County, Illinois, to which jurisdiction and venue all parties consent. Each party hereby waives his, her or its right to trial by jury with respect to such action and agrees that the prevailing party such action shall be entitled to reimbursement from the other party of his, her or its legal fees and costs incurred in connection with such actions. Company shall be entitled to injunctive relief, without the necessity of posting bond to remedy any breach of any of the terms of Article IV of this Agreement by Employee.
5.8 Governing Law. The parties agree that this Agreement shall be governed by, interpreted and construed in accordance with the laws of the State of Illinois.
5.9 Counterparts. This Agreement may be executed in one or more counterparts, whether by original, photocopy, facsimile or e-mail attachment in PDF format, each of which will be deemed an original and all of which together will constitute one and the same instrument.
5.10 Recitals. The Recitals set forth above are hereby incorporated in and made a part of this Agreement by this reference.
5.11 Survival. Employee’s obligations under Article IV hereof shall survive any termination of this Agreement
5.12 Additional Covenant. Attached hereto as Exhibit A and incorporated by reference herein is the form of Promissory Note (“Note”) issued by the Company to Employee on or about
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the date hereof. As a material inducement to Employee to fund the Note, Company agrees that it shall not apply any amount of the Note proceeds toward the payment of salary or other obligations of the Company to any of its current or past employees, officers or directors or any of their respective Affiliates that were accrued prior to the Effective Date without the prior written consent of Employee. In addition, Employee shall have the right to exercise any of the rights set forth in the Note for his own benefit and enforcement of any of those rights shall not be deemed a breach of any fiduciary duty or other obligation owing from Employee to the Company. Employee shall have the right for injunctive relief without the necessity of posting bond to enforce any of his rights with respect to the Note.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth above.
| | | | | |
COMPANY:
| | EMPLOYEE:
|
| | |
Emergent Health Corp
| | |
| | /s/Chris Swenson
|
| | Chris Swenson
|
By:
| /s/Scott Maguire
| | |
Name:
| Scott Maguire
| | Address:
| 1132 Oak St
|
Title:
| Chairman
| | | Winnetka, IL 60093
|
| | |
| | Employee Owned Inventions:
| None
|
Signature Page
Employment Agreement
EXHIBIT A
COMPENSATION
| |
1.
| Base Salary. $275,000.00 per annum, subject to increase in the sole discretion of the Board of Directors of the Company.
|
| |
2.
| Stock Option. The Company awards 1,000,000 shares of Common Stock for a ten year option, vested immediately at an exercise price of $100,000 in total ($0.10 per share with no increase in purchase price for anti-dilution rights). Based upon current capitalization of the Company of approximately 41,930,000 shares before giving effect to this represents approximately 2.33% of the Company fully diluted before giving effect to the executive options in #3 below. This stock option will have anti-dilutions rights so that after giving effect to this option and the stock option in Section 3 below and the issuances of capital stock and options through the placement of the first $3,000,000 in additional equity of the Company, Employee will hold options to purchase up to 2.33% of the Company (fully diluted) per this Section 2 and up to 5% of the Company (fully diluted) per Section 3 below.
|
| |
3.
| Executive options. Employee will be granted stock options with an exercise price of $226,233 in the aggregate to purchase an amount equal to 5% of the fully diluted capitalization of the Company (inclusive of the options per Sections 2 and 3 hereof) after giving effect to the issuances of the next $3,000,000 in equity capital raised by the Company, as well as any new stock options granted through the date of closing upon such equity. The impact of the options per Sections 2 and 3 hereof in additional converted financing raised through the S1 and a full option pool (enough to anticipate all future grants to distributors and new employees). These options will vest monthly over three years and will fully vest upon change in change in control.
|
| |
3.
| Bonus. Employee shall earn an annual bonus of $150,000 upon aggregate fresh capital raised of $2,500,000 by the Company following the date of this Agreement.
|
| |
4.
| Benefits. Employee shall be entitled to receive all offered health benefits for himself and his family, at no additional cost, in an amount not less than the greatest level of coverage offered to other employees in the Company.
|
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