Mr. Curtis
Broome
c/o Natural Health Trends Corp.
2050 Diplomat Drive
Dallas, Texas 75234
I am pleased to
set forth the terms and conditions of your employment with Natural
Health Trends Corp. (the “Company”), effective as of
April 23, 2007 (the “Commencement Date”). We look
forward to your significant contributions toward the achievement of
our goals.
You will continue
to serve the Company as President of NHT Global, with the authority
and responsibility to direct, manage and supervise all of the
Company’s markets worldwide. You will be an executive officer
of the Company and will report to the President of the
Company.
Your base salary
is $250,000 per year, subject to a minimum of 3% annual increase
per year every January 1 st as
approved by the Board, and you will also be eligible to receive
annual incentive compensation, in accordance with the
Company’s Annual Incentive Plan. The incentive bonus will be
paid in cash immediately following the completion of the
Company’s year end audit of its financial
statements.
You will also be
provided with a housing and living allowance equal to $80,000 per
annum for the period of time during which you reside in Hong Kong.
This housing and living allowance may be evaluated by an
independent appraiser retained by the Company from time to time. If
any such appraisal reveals that an adjustment is warranted, this
housing and living allowance will be increased or decreased
accordingly.
Your compensation
will also include participation in our standard benefits program
available to our U.S. based employees.
You will be
eligible for a “staking grant” of restricted shares no
later than April 23 2007 in accordance with the
Company’s 2005 Stock Option Plan, as amended. The restricted
shares will vest over a three year period on a pro rata quarterly
basis following the Commencement Date (unless your employment with
the Company is sooner terminated). You will also be entitled to an
annual equity grant in accordance with the Company Annual Incentive
Plan or Annual Equity Plan.
You will be
entitled to four (4) weeks vacation per annum, in accordance
with the Company’s vacation policy.
You will be
entitled to Severance Payments (as defined below) if any of the
following events occur: (i) the Company terminates you without
Cause (as defined below) during the period commencing on the date
that is thirty (30) days prior to a Change of Control (as
defined below) through and including the date that is
18 months following such Change of Control (a “Change of
Control Termination”); (ii) you
Mr. Curtis
Broome
April 23, 2007
Page 2 of 3
provide the
Company with written notice of your resignation for Good Reason (as
defined below) and the Company has not cured such event within
30 days following its receipt of such written notice; or
(iii) the Company terminates you without Cause (other than in
connection with a Change of Control as contemplated in
(i) above).
However, in order
to receive any Severance Payments you must execute and deliver to
the Company a full general release of all claims against the
Company and its affiliates in form and substance satisfactory to
the Company.
As used herein,
the term:
(a) “Severance
Payments” shall mean the continuation of the payment of your
base salary then in effect (plus health and medical insurance
coverage as previously provided to you or, if required in lieu
thereof, COBRA payments providing such coverage) for a period of
one (1) years following the termination date, or until such
earlier date on which you become engaged in any Competitive
Activity (as defined in the Non-Competition Agreement) or otherwise
breach the terms and conditions of the Non-Competition Agreement
(each, a “Severance Payment Termination Event); provided
however, that with respect to a Change of Control Termination, the
Employee shall be entitled to receive Severance Payments equal to
your base salary for two (2) years, due and payable to you in
a lump sum 30 days after the termination date; ;
(b) “Cause”
shall include, without limitation, the following: (i) failure
or neglect, by you to perform the duties of your position;
(ii) your failure to obey orders given by the Company or your
supervisors; (iii) your misconduct in connection with the
performance of any of your duties, including, without limitation,
misappropriation of funds or property of the Company, securing or
attempting to secure personally any profit in connection with any
transaction entered into on behalf of the Company,
misrepresentation to the Company, or any violation of law or
regulations on Company premises or to which the Company is subject;
(iv) your commission of an act involving moral turpitude,
dishonesty, theft or unethical business conduct, or conduct which
impairs or injures the reputation of, or harms, the Company;
(v) your disloyalty, including without limitation, aiding a
competitor; (vi) your failure to devote your full time and
best efforts to the Company’s business and affairs;
(vii) your failure to work exclusively for the Company;
(viii) your failure to fully cooperate in any investigation by
the Company; (ix) your material breach of this Agreement or
Company rules; (x) any other act of misconduct by you that
could reasonably be expected to have a material adverse effect on
the Company, its business, prospects or reputation; (xi) your
abuse of alcohol or other drugs or controlled substances; or
(xii) your resignation (other than for Good
Reason).
(c) “Change
of Control” shall mean: (i) when any
“person” as defined in Section 3(a)(9) of the
Securities and Exchange Act of 1934, as amended (the
“Exchange Act”), and as used in Section 13(d) and 14(d)
thereof, including a “group” as defined in Section
13(d) of the Exchange Act, but excluding the Company or any
subsidiary or any affiliate of the Company or any employee benefit
plan sponsored or maintained by the Company or any subsidiary of
the Company (including any trustee of such plan acting as trustee),
becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act) of securities of the
Company representing more than 50% of the combined voting power of
the Company’s then outstanding securities; or (ii) when,
during any period of twenty-four (24) consecutive months, the
individuals who, at the beginning of such period, constitute the
Board of Directors (the “Incumbent Directors”) cease
for any reason other than death to constitute at least a majority
thereof, provided, however, that a director who was not a director
at the beginning of such 24-month period shall be deemed to have
satisfied such 24-month requirement (and be an Incumbent Director)
if such director was elected by, or on the recommendation of or
with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors either actually (because they were
directors at the beginning of such 24-month period) or through the
operation of this provision; or (iii) the occurrence of a
transaction requiring stockholder approval under applicable state
law for the acquisition of the Company by an entity other than the
Company or a subsidiary or an affiliated company of the Company
through the purchase of assets, or by merger, or otherwise;
provided however, that none of the foregoing shall constitute a
Change of Control if such transaction, event or occurrence shall be
approved by, or consented to, by the Employee;
Mr. Curtis
Broome
April 23, 2007
Page 3 of 3
(d) “Good
Reason” shall mean the occurrence of any of the following
without your written consent or approval: (A) the assignment
to you of duties inconsistent with this Agreement or a material
diminution in your title, authority or base compensation;
(B) any change in reporting responsibility so that you report
to any person other than the Board of Directors thereof;
(C) any material breach of the Agreement by this Company or
(D) the Company requires you to relocate more than 50 miles
outside of the Dallas-Fort Worth Metroplex metropolitan
area.
Non-Competition and Confidentiality
Agreement
The Company agrees
to provide you with confidential and proprietary information so
that you may perform your duties under this Agreement. You agree to
enter into a Non-Competition and Proprietary Rights Assignment
Agreement, a form of which is attached hereto as Exhibit A
(the “Non-Competition Agreement”), pursuant to which
you will agree that you will keep in confidence the Company’s
confidential information, you will not compete with the Company,
and you will not solicit employees or independent distributors of
the Company.
This Agreement
shall be deemed a contract made under the laws of Texas and for all
purposes shall be construed in accordance with the laws of said
State applicable to contracts made and to be performed within said
State.
All disputes
between Parties in connection with arising out of the existence,
validity, construction, performance and termination of this
Agreement shall be finally settled by arbitration under the Federal
Arbitration Act. The arbitration shall be held in Dallas, Texas in
accordance with the Rules of the American Arbitration Association
for employment disputes by one or more arbitrators appointed in
accordance with the said Rules and the award of such arbitrators
shall be final and binding upon the Parties. The non-prevailing
party shall pay for all reasonable costs and expenses incurred in
connection with such dispute, including filing and arbitrator fees
as well as the reasonable costs and expenses of opposing legal
counsel.
You understand
that your employment will be at will, and either you or the Company
may terminate the relationship at any time upon four (4) weeks
notice; provided however, that the at will relationship will not in
any way affect the Company’s obligation to pay severance to
you as set forth above under “Severance”.
We all look
forward to working with you and know that you will do an
outstanding job in this critical role. All of the benefits
described in this letter are conditioned upon your acceptance of
this offer. Please indicate your acceptance and agreement with the
terms of this letter by signing below in the space provided and by
signing the Non-Competition Agreement.
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Sincerely,
NATURAL HEALTH TRENDS CORP.
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By:
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/s/ Chris T.
Sharng
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Name:
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Chris T.
Sharng
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Title:
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President
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NATURAL HEALTH TRENDS
CORP.
NON-COMPETITION AND
PROPRIETARY RIGHTS
ASSIGNMENT AGREEMENT
Employee’s
Name: Curtis Broome
(“Employee”)
In
consideration of Employee’s continued employment by or other
similar relationship with Natural Health Trends Corp. (the
“Company”) and in consideration for and as a condition
to the transactions contemplated by that certain Employment
Agreement dated as of the date hereof by and between the Company
and Employee (the “Employment Agreement”), including
without limitation the Company’s promise to provide Employee
with confidential information, Employee hereby agrees with the
Company as follows:
1.
Confidential Information . During the term of this
Agreement and in the course of Employee’s performance of
services for the Company, the Company agrees to provide Employee
with confidential or competitively sensitive information of the
Company, which may include information of a third party with which
the Company has a business relationship, relating to the
Company’s or such third party’s current or prospective
business, research and development activities, products,
technology, strategy, organization and/or finances (collectively,
“Confidential Information”). Such Confidential
Information, which may be disclosed orally or in writing, shall
include, without limitation, Technology (as defined in
Section 2(a)), Work Product (as defined in Section 2(a)),
plans, strategies, negotiations, customer or prospect identities,
market analyses, projections, forecasts, cost and performance data,
sales data, financial statements, price lists, pre-release
information regarding the Company’s products, personnel lists
and data, and all documents and other materials (including any
notes, drawings, reports, manuals, notebooks, summaries, extracts
or analyses), whether in written or electronic form, that disclose
or embody such Confidential Information.
Confidential
Information shall not include information that is now, or
he
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