Employment Agreement - Lipid Sciences Inc. and Randy Stolworthy
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), which is effective as of
November 30, 2001, is between Lipid Sciences, Inc., an Arizona corporation (the
"Company"), and Randy Stolworthy ("Employee"), who agree as follows. The Company
and Employee are hereinafter collectively referred to as the "Parties," and may
individually be referred to as a "Party."
RECITALS
A. The Company desires assurance of the continuing services of Employee in
order to retain Employee's experience, skills, abilities, background and
knowledge, and is willing to engage Employee's services on the terms and
conditions set forth in this Agreement; and
B. Employee desires to be in the employ of the Company and is willing to
accept this employment on the terms and conditions set forth in this Agreement.
AGREEMENT
1. EMPLOYMENT.
1.1 The Company will employ Employee, and Employee hereby accepts
employment by the Company, upon the terms and conditions set forth in this
Agreement, effective as of the date first set forth above ("Effective Date"),
for the term of one year from the Effective Date. This Agreement will
automatically be renewed for the term of one year unless either party gives
notice to the other at least 60 days prior to the expiration of the then current
term of employment of such party's intention not to renew.
1.2 Employee will be the President for the Company's real estate and
lending subsidiaries. Employee will directly report to the President and Chief
Executive Officer of the Company. In addition, employee will interface directly
with the Company's Chief Financial Officer regarding day-to-day operations of
the real estate and lending subsidiaries. One such subsidiary may be the actual
employer of Employee for payroll, benefits, and tax reporting purposes.
1.3 Employee will do and perform all services, acts or things
necessary or advisable to properly perform the functions of his position,
provided, however, that at all times during his employment, Employee will be
subject to the direction of the President.
2. LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.
2.1 During his employment by the Company, Employee will devote
substantially all of business employment, interest, abilities and productive
time to the proper and efficient performance of his duties under this Agreement.
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2.2 During his employment by the Company, Employee may not engage in
competition with the Company or its subsidiaries, either directly or indirectly,
in any manner or capacity, as adviser, principal, agent, partner, officer,
director, employee, member of any association or otherwise, in any phase of the
business of developing, manufacturing and marketing of products that are in the
same field of use or which otherwise directly compete with the products or
proposed products of the Company or its subsidiaries.
3. COMPENSATION OF EMPLOYEE.
3.1 The Company will pay Employee a salary of three hundred,
twenty-four thousand dollars ($324,000.00) per year ("Base Salary"), payable in
regular semi-monthly payments in accordance with Company policy. Such salary
will be prorated for any partial year of employment on the basis of a 365-day
fiscal year.
3.2 Employee's compensation may be increased, but not decreased,
from time to time by mutual agreement of Employee and the Company.
3.3 All of Employee's compensation is subject to customary
withholding taxes and any other employment taxes as are commonly required to be
collected or withheld by the Company.
3.4 Employee will, in the discretion of the Board and in accordance
with Company policy, be entitled to participate in benefits under any employee
benefit plan or arrangement made available by the Company now or in the future
to its employees; provided, however, that such benefits and plans shall, at all
times, be economically equivalent or superior to those maintained by the Company
during June 2001, and shall include at a minimum medical, dental, vision, life,
and disability insurance. The Company shall continue to pay the same proportion
of premiums for such insurance as were paid by the Company in June 2001.
Insurance policies in place as of June 2001 shall be maintained until at least
their current expiration dates. Employee will be entitled to vacation and sick
leave in accordance with the policies in effect in June 2001.
3.5 Employee's performance will be reviewed by his supervisor on a
periodic basis (not less than once each fiscal year). Employee will be reviewed
within 12 months of commencing employment hereunder.
3.6 Employee is entitled to receive prompt reimbursement of all
reasonable expenses incurred by Employee in performing Company services,
including expenses related to travel, entertainment, parking, and business
meetings. These expenses will be accounted for in accordance with the policies
and procedures established by the Company. The Company will continue to provide
Company credit cards, telephone cards, and cellular telephones for reasonable
business use. Employee will provide the Company adequate documentation that such
expenses are related to reasonable business use.
3.7 Employee is entitled to time off and reimbursement for the costs
of continuing or professional education and development relative to Employee's
job or professional designations, consistent with Company policies.
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4. TERMINATION. Either party may terminate this Agreement and Employee's
employment without cause, upon thirty (30) days written notice. Upon
termination, the Company will be released from any and all obligations under
this Agreement, except if the Employee's employment is involuntarily terminated
by the Company other than for Cause, or if by mutual agreement under the terms
in EXHIBIT B, or if the Company gives notice that it does not intend to renew
this Agreement, as provided for in Section 1.1, then Employee will be paid a
severance amount equal to $216,000.00. Such severance shall be paid in
substantially equal semi-monthly installments over a period of twelve (12)
months. In addition, the Company will continue to pay the amounts set forth in
paragraph 3.4 above for health, dental, life and other insurance programs for a
period of twelve (12) months, after which time the Employee will have available
the full 18 months provided under COBRA. If Employee is dismissed for Cause, no
severance or continuation of insurance shall be paid to Employee. For purposes
of this Agreement, "Cause" means Employee is dismissed for fraud, theft,
embezzlement, industrial espionage, illegal use of inside information, or
similar matters that are detrimental to the Company, or for the willful and
repeated disregard of Employee's job duties to the detriment of the Company.
5. CONFIDENTIAL INFORMATION; NONSOLICITATION.
5.1 Employee recognizes that his employment with the Company will
involve contact with information of substantial value to the Company, which is
not generally known in the trade, and which gives the Company an advantage over
its competitors who do not know or use it, including, but not limited to,
techniques, designs, drawings, processes, inventions, developments, equipment,
prototypes, sales and customer information, and business and financial
information relating to the business, products, practices and techniques of the
Company (hereinafter referred to as "Confidential Information"). Employee will
at all times regard and preserve as confidential such Confidential Information
obtained by Employee from whatever source and will not, either during his
employment with the Company or thereafter, publish or disclose any part of such
Confidential Information in any manner at any time, or use the same except on
behalf of the Company, without the prior written consent of the Company;
provided, however, that Employee may disclose Confidential Information in the
best interest of the Company with properly executed Company confidentiality or
secrecy agreements with the third party. As a condition of this Agreement, the
Employee will sign and return a copy of the Company's Proprietary Information
and Inventions Agreement, attached as EXHIBIT A.
5.2 While employed by the Company and for one (1) year thereafter,
in order to protect the Company's confidential and proprietary information from
unauthorized use, Employee may not, either directly or through others, (i)
solicit or attempt to solicit any employee, consultant or independent contractor
of the Company to terminate his or her relationship with the Company in order to
become an employee, consultant or independent contractor to or for any other
person or business entity; or (ii) solicit or attempt to solicit the business of
any customer, vendor or distributor of the Company which, at the time of
termination, or one (1) year immediately prior thereto, was listed on the
Company's customer, vendor or distributor list unless such a solicitation is
with respect to an entity or business that is not in direct competition with the
Company.
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6. SUCCESSORS. The Company will require any successor (whether direct or
indirect, by purchase, merger, or consolidation) to all or substantially all of
the business and/or assets of the Company, by agreement in form and substance
reasonably satisfactory to the Employee, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
7. ASSIGNMENT AND BINDING EFFECT. This Agreement is binding on and inures
to the benefit of Employee and Employee's heirs, executors, personal
representatives, assigns, administrators and legal representatives. Because of
the unique and personal nature of Employee's duties under this Agreement,
neither this Agreement nor any rights or obligations under this Agreement are
assignable by Employee. This Agreement is binding on and inures to the benefit
of the Company and its successors, assigns and legal representatives. Except as
to the Option set forth under Section 3.6, the Company may assign its rights and
obligations under this Agreement to any of its subsidiaries.
8. NOTICES. All notices or demands of any kind required or permitted to be
given by the Company or Employee under this Agreement will be given in writing
and will be personally delivered (and receipted for) or mailed by certified
mail, return receipt requested, postage prepaid to the addresses set forth under
the signatures of the Parties.
9. CHOICE OF LAW. This Agreement will be construed and interpreted in
accordance with the laws of the State of Arizona, without regard to the conflict
of laws provision thereof.
10. INTEGRATION. This Agreement contains the complete, final and exclusive
agreement of the Parties relating to the subject matter of this Agreement, and
supersedes all prior oral and written employment agreements or arrangements
between the Parties.
11. AMENDMENT. This Agreement may not be amended or modified except by a
written agreement signed by Employee and the Company.
12. WAIVER. No term, covenant or condition of this Agreement or any breach
thereof will be deemed waived, except with the written consent of the Party
against whom the waiver is claimed, and any waiver of any such term, covenant,
condition or breach will not be deemed to be a waiver of any preceding or
succeeding breach of the same or any other term, covenant, condition or breach.
13. SEVERABILITY. The finding by a court of competent jurisdiction of the
enforceability, invalidity or illegality of any provision of this Agreement will
not render any other provision of this Agreement unenforceable, invalid or
illegal. Such court will have the authority to modify or replace the invalid or
unenforceable term or provision with a valid and enforceable term or provision
which most accurately represents the parties' intention with respect to the
invalid or unenforceable term or provision.
14. INTERPRETATION; CONSTRUCTION. The headings set forth in this Agreement
are for convenience of reference only and will not be used in interpreting this
Agreement. Employee has been encouraged to consult with his own independent
counsel and
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tax advisors with respect to the terms of this Agreement. The Parties
acknowledge that each Party and/or its counsel has reviewed and revised, or had
an opportunity to review and revise, this Agreement, and the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party will not be employed in the interpretation of this Agreement.
15. REPRESENTATIONS AND WARRANTIES. Employee represents and warrants that,
to the best of Employee's knowledge, he is not restricted or prohibited,
contractually or otherwise, from entering into and performing each of the terms
and covenants contained in this Agreement, and that his execution and
performance of this Agreement will not violate or breach any other agreements
between Employee and any other person or entity.
16. COUNTERPARTS. This Agreement may be executed in two counterparts, each
of which will be deemed an original, all of which together will constitute one
and the same instrument.
17. ATTORNEYS' FEES AND COSTS. The prevailing party in any dispute arising
out of this Agreement will be entitled to reimbursement by the losing party of
all of its or his attorneys' fees and costs including, but not limited to
expert's fees.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
THE COMPANY: LIPID SCIENCES, INC.
An Arizona corporation
By: /s/ Barry D. Michaels
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Barry D. Michaels, CFO
Lipid Sciences, Inc.
7068 Koll Center Parkway, Suite 401
Pleasanton, California 94566
EMPLOYEE: /s/ Randy Stolworthy
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Randy Stolworthy
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EMPLOYMENT AGREEMENT
EXHIBIT B
If Randy Stolworthy and the Company mutually agree that his services are no
longer required on a routine and regular basis, then his employment may be
immediately terminated provided:
1. He will be provided termination benefits as provided in Section 4 of
his employment agreement as if his employment had been involuntarily terminated
other than for Cause.
2. In consideration for the termination benefits provided he will continue
to provide service to the Company, as and when requested by the Company,
specific to the disposition of NZ assets.
3. He will provide his best efforts to secure terms favorable to the
Company in all matters related to the disposition of NZ assets.
4. The Company will compensate Mr. Stolworthy $150 per hour for all
personal services requested of him by the Company. In addition, the Company will
reimburse him for reasonable out-of-pocket expenses directly related to Mr.
Stolworthy providing post employment service to the Company.
In consideration for the cash payments and other benefits given to Mr.
Stolworthy as a result of this agreement, his obligation to provide as-needed
service to the Company shall remain in force until all pre-merger NZ assets have
been disposed or until such time as the parties mutually agree to end his
obligations, which obligations Mr. Stolworthy recognizes may extend beyond the
term of the payments payable to him under Section 4 of the Employment Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
THE COMPANY: LIPID SCIENCES, INC.
An Arizona corporation
By: /s/ Barry D. Michaels
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Barry D. Michaels, CFO
Lipid Sciences, Inc.
7068 Koll Center Parkway, Suite 401
Pleasanton, California 94566
EMPLOYEE: /s/ Randy Stolworthy
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Randy Stolworthy
Notification Address: