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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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THIS
EMPLOYMENT AGREEMENT (this "AGREEMENT") is made and entered into
this
8th day of August 2008 by and between Allergy Research Group, Inc.,
a Florida
corporation (the "COMPANY"), and Manfred Salomon (the
"EXECUTIVE").
RECITALS
THE
PARTIES ENTER THIS AGREEMENT on the basis of the following
facts,
understandings and intentions:
A. The Company
desires to employ the Executive, and the Executive desires
to accept such employment, on the terms and conditions set forth in
this
Agreement.
B. This
Agreement shall be effective immediately and shall govern the
employment relationship between the Executive and the Company from
and after the
date of the closing of the merger of Longhorn Acquisition Corp.
with and into
the Company (the "EFFECTIVE Date"), and, as of such date,
supersedes and negates
all previous agreements and understandings with respect to such
relationship.
AGREEMENT
NOW,
THEREFORE, in consideration of the above recitals incorporated
herein
and the mutual covenants and promises contained herein and other
good and
valuable consideration, the receipt and sufficiency of which are
hereby
expressly acknowledged, the parties agree as follows:
1. RETENTION AND DUTIES.
1.1
RETENTION. The
Company does hereby hire, engage and employ the
Executive for the Period of Employment (as defined in Section 2)
on
the terms and conditions expressly set forth in this Agreement.
The
Executive does hereby accept and agree to such hiring,
engagement
and employment, on the terms and conditions expressly set forth
in
this Agreement.
1.2
DUTIES. During
the Period of Employment, the Executive shall serve
the Company as its Chief Operating Officer and shall have the
powers, authorities and duties usually vested in the office of
the
chief operating officer of a company of a similar size and
similar
nature of the Company, and such other powers, authorities and
duties
commensurate with such position as the Company's Board of
Directors
(the "BOARD") may assign from time to time, all subject to the
directives of the Board and the corporate policies of the Company
as
in effect from time to time (including, without limitation, the
Company's business conduct and ethics policies, as they may
change
from time to time). During the Period of Employment, the
Executive
shall report to Kenichi Saito and Richard Belenski, or such
other
person or persons as may be designated by the Board in its
discretion (the "DESIGNATED PERSON").
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1.3
NO OTHER
EMPLOYMENT; MINIMUM TIME COMMITMENT. During the Period of
Employment, the Executive shall (i) devote substantially all of
the
Executive's business time, energy and skill to the performance
of
the Executive's duties for the Company, (ii) perform such duties
in
a faithful, effective and efficient manner to the best of his
abilities, and (iii) hold no other employment. The Executive's
service on the boards of directors (or similar body) of other
business entities is subject to the approval of the Board. The
Company shall have the right to require the Executive to resign
from
any board or similar body (including any association,
corporate,
civic or charitable board or similar body) if the Board
reasonably
determines that the Executive's service on such board or body
interferes with the effective discharge of the Executive's
duties
and responsibilities to the Company or that any business related
to
such service is then in competition with any business of the
Company
or any of its affiliates, successors or assigns.
1.4
NO BREACH OF
CONTRACT. The Executive hereby represents to the
Company that: (i) 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 do not and shall not
constitute
a breach of or conflict with the terms of any other agreement
or
policy to which the Executive is a party or otherwise bound or
any
judgment, order or decree to which the Executive is subject;
(ii)
the Executive has no information (including, without
limitation,
confidential information and trade secrets) relating to any
other
individual or entity which would prevent, or be violated by,
the
Executive entering into this Agreement or carrying out his
duties
hereunder; (iii) the Executive is not bound by any employment,
consulting, non-compete, confidentiality, trade secret or
similar
agreement (other than this Agreement) with any other entity;
and
(iv) the Executive understands the Company will rely upon the
accuracy and truth of the representations and warranties of the
Executive set forth herein and the Executive consents to such
reliance.
1.5
LOCATION. The
Executive's principal place of employment shall be the
Company's principal executive office as it may be located from
time
to time. The Executive acknowledges that he will be required to
travel from time to time in the course of performing his duties
for
the Company.
2. PERIOD
OF EMPLOYMENT. The "PERIOD OF EMPLOYMENT" shall be a period of
two
years
commencing on the Effective Date and ending at the close of
business
on the
second anniversary of the Effective Date; provided, however,
that
this
Agreement and the Period of Employment may be extended by
mutual
written
agreement of the Company and the Executive. The term "Period of
Employment" shall include any extension thereof pursuant to the
preceding
sentence.
A decision by either party that the Period of Employment shall
not be
extended or further extended, as the case may be, shall not
constitute
a breach of this Agreement or, in the case of such a decision
by the
Company, constitute Good Reason for purposes of this Agreement.
Notwithstanding the foregoing, the Period of Employment is subject
to
earlier
termination as provided below in this Agreement.
3.
COMPENSATION.
3.1
BASE SALARY.
During the Period of Employment, the Company shall pay
the Executive a base salary (the "BASE SALARY") in accordance
with
the Company's regular payroll practices in effect from time to
time
but not less frequently than monthly. The Executive's Base
Salary
shall be at an annualized rate of Two Hundred Twenty Thousand
Dollars ($220,000). The Board (or a committee thereof) may, in
its
sole discretion, increase (but not decrease) the Executive's rate
of
Base Salary. The Board (or committee) shall review the
Executive's
compensation annually in accordance with its established
practice.
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3.2
INCENTIVE BONUS.
Commencing with the 2008 fiscal year, the Executive
shall be eligible to receive an incentive bonus for each fiscal
year
of the Company that occurs during the Period of Employment
("INCENTIVE BONUS"). Notwithstanding the foregoing and except
as
otherwise expressly provided in this Agreement, the Executive
must
be employed by the Company at the time the Company pays the
Incentive Bonus with respect to a particular year generally in
order
to be eligible for an Incentive Bonus with respect to that year.
The
Executive's Incentive Bonus amount for each fiscal year shall
be
determined by the Board (or a committee thereof) in its sole
discretion based on performance objectives established with
respect
to that particular fiscal year by the Board (or a committee
thereof)
and communicated to the Executive at the beginning of the
applicable
fiscal year; provided, however, that in no event shall the
Executive's actual Incentive Bonus amount for the Company's
2008
fiscal year be less than Thirty Thousand Dollars ($30,000)
(subject
to the continued employment requirement set forth above).
4.
BENEFITS.
4.1
RETIREMENT,
WELFARE AND FRINGE BENEFITS. During the Period of
Employment, the Executive shall be entitled to participate in
all
employee retirement (including but not limited to plans
qualified
under Section 401(k) of the Code), pension and welfare benefit
plans
and programs, and fringe benefit plans and programs, made
available
by the Company to the Company's employees generally, in
accordance
with the eligibility and participation provisions of such plans
and
as such plans or programs may be in effect from time to time;
provided, however, that the Company shall use its commercially
reasonable efforts to provide the Executive during the Period
of
Employment (under benefit plans or arrangements maintained by
the
Company immediately prior to the Effective Date or otherwise)
with
benefits that are at least substantially comparable in the
aggregate
to the benefits the Company provided to the Executive
immediately
prior to the Effective Date.
4.2
REIMBURSEMENT OF
BUSINESS EXPENSES. The Executive is authorized to
incur reasonable expenses in carrying out the Executive's duties
for
the Company under this Agreement and shall be entitled to
reimbursement for all reasonable business expenses the
Executive
incurs during the Period of Employment in connection with
carrying
out such duties, subject to the Company's expense reimbursement
policies and any pre-approval policies in effect from time to
time.
Any such reimbursement shall be paid within ninety (90) days
after
the related expense was incurred and shall be subject to the
Executive's having timely submitted all supporting and other
documentation required under the Company's expense
reimbursement
policies in effect at the applicable time.
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4.3
VACATION AND
OTHER LEAVE. During the Period of Employment, the
Executive's annual rate of vacation accrual shall be twenty
(20)
days per year; provided that such vacation shall accrue and be
subject to the Company's vacation policies (including accrual
caps)
in effect from time to time. The Executive shall also be entitled
to
all other holiday and leave pay generally available to other
executives of the Company.
5.
TERMINATION.
5.1
TERMINATION BY
THE COMPANY. The Executive's employment by the
Company, and the Period of Employment, may be terminated at any
time
by the Company: (i) with Cause (as defined in Section 5.5), or
(ii)
without Cause with no less than ninety (90) days advance
written
notice to the Executive (such notice to be delivered in
accordance
with Section 17), or (iii) in the event of the Executive's death,
or
(iv) in the event that the Board determines in good faith that
the
Executive has a Disability (as defined in Section 5.5).
5.2
TERMINATION BY
THE EXECUTIVE. The Executive's employment by the
Company, and the Period of Employment, may be terminated by the
Executive with no less than ninety (90) days advance written
notice
to the Company (such notice to be delivered in accordance with
Section 17); provided, however, that in the case of a
termination
for Good Reason (as defined in Section 5.5), the Executive may
provide immediate written notice of termination once the
applicable
cure period (as contemplated by the definition of Good Reason)
has
lapsed if the Company has not reasonably cured the
circumstances
that gave rise to the basis for the Good Reason termination.
5.3
BENEFITS UPON
TERMINATION. If the Executive's employment by the
Company is terminated during the Period of Employment for any
reason
by the Company or by the Executive, or upon or following the
expiration of the Period of Employment (in any case, the date
that
the Executive's employment by the Company terminates is referred
to
as the "SEVERANCE DATE"), the Company shall have no further
obligation to make or provide to the Executive, and the
Executive
shall have no further right to receive or obtain from the
Company,
any payments or benefits except as follows:
(a) The
Company shall pay the Executive (or, in the event of his
death, the Executive's estate) any Accrued Obligations (as such
term
is defined in Section 5.5);
(b) If, during the Period of Employment, the Executive's
employment
with the Company terminates as a result of either (i) a
termination
by the Company without Cause pursuant to Section 5.1(ii) or (ii)
a
termination by the Executive for Good Reason, the Executive shall
be
entitled to (in addition to the Accrued Obligations), subject to
the
following provisions of this Section 5.3 and Section 5.4 and
subject
to tax withholding and other authorized deductions, an amount
equal
to the Base Salary that the Executive would have been entitled
to
receive for the period commencing on the Severance Date and
ending
on the second anniversary of the Effective Date, or with respect
to
any renewal period from the commencement of the Severance Date
to
the end of the renewal period (the "SEVERANCE PERIOD"), had the
Executive continued to be employed with the Company throughout
such
period at the annualized rate in effect on the Severance Date
(the
"SEVERANCE BENEFIT"). The Severance Benefit shall be paid in
substantially equal installments in accordance with the
Company's
standard payroll practices over a number of months equal to the
number of months in the Severance Period, with the first such
installment payable, subject to Section 5.7, in the month
following
the month in which the Executive's Separation from Service (as
defined in Section 5.5) occurs. The Company shall also promptly
pay
to the Executive any Incentive Bonus that would otherwise be paid
to
the Executive had his employment not terminated with respect to
any
fiscal year that ended before the Severance Date, to the extent
not
theretofore paid.
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(c) Notwithstanding the foregoing provisions of this Section 5.3,
if
the Executive breaches his obligations under Section 6 at any
time,
from and after the date of such breach and not in any way in
limitation of any right or remedy otherwise available to the
Company, the Company will no longer be obligated to pay any
remaining unpaid amount contemplated by Section 5.3(b);
provided
that, if the Executive provides the release contemplated by
Section
5.4, in no event shall the Executive be entitled to benefits
pursuant to Section 5.3(b) of less than $5,000, which amount
the
parties agree is good and adequate consideration, in and of
itself,
for the Executive's release contemplated by Section 5.4.
(d) The foregoing provisions of this Section 5.3 shall not
affect:
(i) the Executive's receipt of benefits otherwise due
terminated
employees under group insurance coverage consistent with the
terms
of the Company's welfare benefit plans; (ii) the Executive's
rights
under COBRA to continue participation in health insurance
coverage;
or (iii) the Executive's receipt of benefits otherwise due in
accordance with the terms of the Company's 401(k) plan (if
any).
5.4
RELEASE;
EXCLUSIVE REMEDY.
(a) This Section 5.4 shall apply notwithstanding anything else
contained in this Agreement to the contrary. As a condition
precedent to any Company obligation to the Executive pursuant
to
Section 5.3(b), the Executive shall, upon or promptly following
his
last day of employment with the Company, provide the Company with
a
valid, executed general release agreement in a form acceptable
to
the Company, and such release agreement shall have not been
revoked
by the Executive pursuant to any revocation rights afforded by
applicable law.
(b) The Executive agrees that the payments and benefits
contemplated
by Section 5.3 shall constitute the exclusive and sole remedy
for
any termination of his employment and the Executive covenants not
to
assert or pursue any other remedies, at law or in equity, with
respect to any termination of employment. The Company and the
Executive acknowledge and agree that there is no duty of the
Executive to mitigate damages under this Agreement. The
Executive
agrees to resign, on the Severance Date, as an officer and
director
of the Company and any affiliate of the Company, and as a
fiduciary
of any benefit plan of the Company or any affiliate of the
Company,
and to promptly execute and provide to the Company any further
documentation, as requested by the Company, to confirm such
resignation.
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5.5
CERTAIN DEFINED
TERMS.
(a) As used herein, "ACCRUED OBLIGATIONS" means (i) any Base
Salary
that had accrued but had not been paid (including accrued and
unpaid
vacation time) on or before the Severance Date; and (ii) any
reimbursement due to the Exec
