Exhibit 10.5
EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (this “ Agreement ”) is
made and entered into as of this 14th day of April 2008, by
and between CHROMADEX, INC., a California corporation (“
Employer ”), and FRANK L JAKSCH, JR. (“
Employee ”).
R E C I
T A L
S
A. Employer desires to obtain the benefit of the services of
Employee and Employee desires to render such services to
Employer.
B. Employer and Employee desire to set forth the terms and
conditions of Employee’s employment with Employer on the
terms and subject to the conditions of this Agreement.
A G R E
E M E N
T
In
consideration of the foregoing recitals and of the mutual covenants
and conditions contained herein, the parties, intending to be
legally bound, agree as follows:
1.
Term . Employer agrees to employ Employee, and Employee
agrees to serve Employer, in accordance with the terms of this
Agreement, for a term (the “ Term ”) beginning
on April 14th (the “ Effective Date ”) and
continuing for a period of two years thereafter unless earlier
terminated in accordance with the provisions hereof. To the extent
that Employee remains employed by Employer after the expiration of
the initial Term, and the initial Term of this Agreement is not
otherwise renewed or continued in writing by Employer and Employee,
then Employee’s employment status shall no longer be subject
to the terms and conditions of this Agreement and shall be
“at-will” without any continuing right to employment by
Employer.
2.
Employment of Employee .
(a)
Specific Positions . Employer and Employee hereby agree
that, subject to the provisions of this Agreement, Employer will
employ Employee and Employee will serve Employer as the Chief
Executive Officer of Employer. Employee shall report to, and
perform such usual and customary duties of such office and as may
be delegated to Employee from time to time by, the Board of
Directors of Employer (the “ Board ”),
including, without limitation, those specific duties set forth on
Exhibit A attached hereto, subject always to the
policies as determined from time to time by Employer. The Board may
and reserves the right to change Employee’s position and
reporting relationship subject to the needs of its business.
(b)
Promotion of Employer’s Business . During the Term,
Employee shall not engage in any business competitive with
Employer. Employee agrees to devote his full business time,
attention, knowledge, skill and energy to the business, affairs and
interests of Employer and matters related thereto, and shall use
his best efforts and abilities to promote Employer’s
interests; provided , however , that Employee is not
precluded from devoting reasonable periods of time required:
(i) for serving as a director or committee member of any
organization that does not compete with Employer or that does not
involve a conflict of interest with Employer; or (ii) for
managing his personal investments; so long as in either case, such
activities do not materially interfere with the regular performance
of his duties under this Agreement.
(c)
Principal Office . Employee’s principal office and
normal place of work shall be at Employer’s executive offices
in Southern California or as otherwise assigned by Employer
consistent with the needs of its business. Employee’s normal
place of work shall be defined as any office where Employee is
consistently requested by Employer to commute to more than one day
per week.
3.
Salary . Employer shall pay to Employee during the term of
this Agreement a base salary (“ Base Salary ”)
of $150,000 per year payable in accordance with Employer’s
normal payroll. This Base Salary shall be increased to $175,000
upon the consummation of any transaction whereby Employer shall
thereafter have publicly traded shares or is required to file
reports with the SEC. In addition, the Base Salary shall be
increased to $200,000 upon the consummation of one or more
transactions occurring after the foregoing transaction and in which
Employer receives financing in an aggregate amount of not less than
$5 million. The Base Salary may be reviewed annually
thereafter and may be increased (but not decreased) at
Employer’s sole discretion in accordance with
Employer’s normal review process.
4.
Bonus . As determined by the Board.
5.
Other . Stock options as determined by the Board.
6.
Benefits .
(a)
Fringe Benefits . During Employee’s employment by
Employer under this Agreement, Employee shall be eligible for
participation in and shall be covered by any and all such medical,
dental, life and other voluntary insurance plans and such other
similar benefits generally available to other employees of Employer
in similar employment positions, on the same terms as such
employees, subject to meeting applicable eligibility requirements.
Employee shall also be covered by long-term disability insurance,
to the extent that such insurance is available to Employer on
commercially reasonable terms and conditions, such that, upon a
termination of Employee by Employer under Section 7(c) as a result
of a disability, Employee shall be entitled to receive disability
insurance coverage in an amount and for a duration at least equal
to that made generally available to officers of Employer under
Employer’s long-term disability insurance in effect as of the
date of this Agreement.
(b)
Reimbursements . During Employee’s employment with
Employer under this Agreement, Employee shall be entitled to
receive prompt reimbursement of all reasonable expenses incurred by
Employee in performing services hereunder, including all expenses
of travel at the request of, or in the service of, Employer
provided that such expenses are incurred and accounted for in
accordance with the policies and procedures established by
Employer.
(c)
Automobile . Subject to the approval of the Board, Employer
may elect to reimburse Employee for certain costs incurred by
Employee in leasing, maintaining, operating and insuring an
automobile for use by Employee in the performance of
Employee’s duties hereunder. The extent by which such costs
are reimbursed by Employer to Employee shall be determined in
accordance with Employer’s automobile reimbursement policy
then in effect, which policy shall have been approved by the
Board.
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7.
Termination .
(a)
Termination for Cause . Employer shall have the right,
exercisable immediately upon written notice, to terminate
Employee’s employment for “Cause.”
(i)
Definition of Cause . As used herein, “ Cause
” means any of the following: (A) Employee is convicted
by a court of competent jurisdiction, pleads “no
contest” to a felony or any other conduct of a criminal
nature involving moral turpitude (other than minor traffic
violations); (B) Employee intentionally engages in fraud,
embezzlement or any other illegal conduct substantially detrimental
to the business or reputation of Employer, regardless of whether
such conduct is designed to defraud Employer or others;
(C) Employee imparts material confidential information
relating to Employer or its business to competitors or to other
third parties other than in the course of carrying out
Employee’s duties; (D) Employee refuses to perform his
duties hereunder or otherwise breaches any material covenant,
warranty or representation of this Agreement, or Employee’s
Non-Disclosure and Confidentiality Agreement with Employer, and
fails to cure such breach (if such breach is then capable of being
cured) within 10 business days following written notice thereof
specifying in reasonable detail the nature of such breach, or if
such breach is not capable of being cured in such time, a cure
shall not have been diligently initiated within such 10 business
day period, (E) violation of any rules, policies or procedures
of Employer, as documented in Employer’s Human Resources
Standards manual, associate guidebook or other written or
electronically published company policies;
(F) Employee’s willful failure to follow any lawful
directive of t
