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EXHIBIT 10.3
EMPLOYMENT SEPARATION AND
GENERAL RELEASE AGREEMENT
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This Employment Separation and
General Release Agreement (this
"SEPARATION AGREEMENT") is entered into this 8th day of August, 2008,
by and
between Susan Levine, an individual ("EXECUTIVE"), and Allergy
Research Group,
Inc., a Florida corporation (the "COMPANY").
WHEREAS, Executive has been
employed as the Vice President and
Secretary for the Company; and
WHEREAS, Executive and the
Company have mutually agreed to terminate
Executive's employment relationship with the Company subject to the closing of
the merger of Longhorn Acquisition Corp. with and into the Company as of the
closing date of such merger (the "SEPARATION DATE") upon the terms
set forth
herein;
NOW, THEREFORE, in consideration
of the covenants undertaken and the
releases contained in this Separation Agreement and the Consulting Agreement
attached as EXHIBIT B hereto (the "CONSULTING AGREEMENT"), Executive
and the
Company agree as follows:
I. RESIGNATION. Executive hereby
irrevocably resigns as an officer,
director, employee, member, manager and in any other capacity with the Company
and each of its Affiliates, effective as of the Separation Date. On the
Separation Date, Executive agrees that she shall confirm such resignation by
executing the letter attached as EXHIBIT A hereto and promptly delivering such
letter to the Company. The Company and its Affiliates hereby accept such
resignation, effective as of the Separation Date. Executive waives any right or
claim to reinstatement as an employee of the Company or any of its Affiliates
by
which she was employed at any time prior to the Separation Date. (For purposes
of this Separation Agreement, the term "AFFILIATE" has the meaning
accorded to
such term in Rule 12b-2 under the Securities Exchange Act of 1934, as amended.)
Executive acknowledges and agrees that Executive has received all amounts owed
for her regular and usual salary (including, but not limited to, any severance,
overtime, bonus, accrued vacation, commissions, or other wages), reimbursement
of expenses, and usual benefits, and that all payments due to Executive from
the
Company have been received.
II. CONSULTING AGREEMENT.
Concurrently with the execution of this
Separation Agreement, Executive shall execute the Consulting Agreement attached
as EXHIBIT B hereto.
III. RELEASE. Executive, on
behalf of herself, her descendants,
dependents, heirs, executors, administrators, assigns, and successors, and each
of them, hereby covenants not to sue and fully releases and discharges the
Company and each of its parents, subsidiaries and Affiliates, past and present,
as well as each of their respective trustees, directors, officers, members,
managers, partners, agents, attorneys, insurers, employees, stockholders,
representatives, assigns, and successors, past and present, and each of them
(hereinafter together and collectively referred to as the
"RELEASEES") with
respect to and from any and all claims, wages, demands, rights, liens,
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agreements or contracts (written or oral), covenants, actions, suits, causes of
action, obligations, debts, costs, expenses, attorneys' fees, damages,
judgments, orders and liabilities of whatever kind or nature in law, equity or
otherwise, whether now known or unknown, suspected or unsuspected, and whether
or not concealed or hidden (each, a "CLAIM"), which she now owns or
holds or she
has at any time heretofore owned or held or may in the future own or hold as
against any of said Releasees (including, without limitation, any Claim arising
out of or in any way connected with Executive's service as an officer,
director,
employee, member or manager of any Releasee, Executive's separation from her
position as an officer, director, employee, manager and/or member, as
applicable, of any Releasee, or any other transactions, occurrences, acts or
omissions or any loss, damage or injury whatever), resulting from any act or
omission by or on the part of said Releasees, or any of them, committed or
omitted prior to the date of this Separation Agreement including, without
limiting the generality of the foregoing, any Claim under Title VII of the
Civil
Rights Act of 1964, the Age Discrimination in Employment Act of 1967
("ADEA"),
the Americans with Disabilities Act, the Family and Medical Leave Act of 1993,
the California Fair Employment and Housing Act, the California Family Rights
Act, or any other federal, state or local law, regulation, or ordinance, or any
Claim for severance pay, bonus, sick leave, holiday pay, vacation pay, life
insurance, health or medical insurance or any other fringe benefit, workers'
compensation or disability. However, this release does not cover any Claim that
cannot be so released as a matter of applicable law and does not prohibit
either
party from filing a claim to enforce or challenge the validity of the terms of
this Separation Agreement pursuant to the provisions hereof. Executive
acknowledges and agrees that she has received any and all leave and other
benefits that she has been and is entitled to pursuant to the Family and
Medical
Leave Act of 1993.
Without limiting the
generality of the foregoing release,
Executive hereby expressly waives any right to indemnification, advancement of
legal fees and expenses, reimbursement or any other form of recovery from the
Company and its current and future affiliates to the extent that Executive
incurs any judgment or award ("LOSS") resulting from, based upon,
arising out of
or related to the pending litigation entitled BRONSON V. ALLERGY RESEARCH
GROUP,
INC. in Palm Beach County, Florida (including any current or future allegations
of breach of fiduciary duty by Executive during the periods to which such
litigation relates, but excluding any future action taken by Bronson and its
affiliates to the extent that such future action does not relate to such
allegations of breach of fiduciary duty by Executive during the periods to
which
such litigation relates) (the "BRONSON LITIGATION"), except to the
extent that
such Loss is covered by directors and officers liability insurance purchased by
and maintained by the Company for such periods to which the Bronson Litigation
relates. Executive shall indemnify and hold harmless the Company and its
present
and future affiliates, to the fullest extent lawful, from and against any Loss,
promptly as incurred, directly or indirectly resulting from, based upon,
arising
out of, or related to the Bronson Litigation, except to the extent that such
Loss is covered by directors and officers liability insurance purchased by and
maintained by the Company for such periods to which the Bronson Litigation
relates; provided, however, that Company shall not be liable to indemnify
Executive for any amounts paid in settlement of any of the Bronson Litigation
effected without the Company's written consent, and the Company shall not
settle
any of the Bronson Litigation in a manner which would impose any penalty or
limitation on Executive without Executive's written consent, which consent, in
either case, shall not be unreasonably withheld.
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IV. WAIVER OF CIVIL CODE SECTION
1542. This Separation Agreement is
intended to be effective as a general release of and bar to each and every
Claim
hereinabove specified. Accordingly, Executive hereby expressly waives any and
all rights and benefits conferred by Section 1542 of the California Civil Code
and any similar provision of any other applicable state law as to the Claims.
Section 1542 of the California Civil Code provides:
"A GENERAL RELEASE
DOES NOT EXTEND TO ANY CLAIMS WHICH THE
CREDITOR DOES NOT KNOW
OR SUSPECT TO EXIST IN HIS OR HER FAVOR
AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR."
Executive acknowledges that she later may discover claims, demands,
causes of action or facts in addition to or different from those which
Executive
now knows or believes to exist with respect to the subject matter of this
Agreement and which, if known or suspected at the time of executing this
Separation Agreement, may have materially affected its terms. Nevertheless,
Executive hereby waives, as to the Claims, any claims, demands, and causes of
action that might arise as a result of such different or additional claims,
demands, causes of action or facts.
V. ADEA WAIVER. Executive
expressly acknowledges and agrees that by
entering into this Separation Agreement, she is waiving any and all rights or
claims that she may have arising under the ADEA, which have arisen on or before
the date of execution of this Separation Agreement. Executive further expressly
acknowledges and agrees that:
(a) In return for this
Separation Agreement, she will receive
consideration beyond that which she was already entitled to receive before
entering into this Separation Agreement;
(b) She is hereby
advised in writing by this Separation
Agreement to consult with an attorney before signing this Separation Agreement;
(c) She has voluntarily chosen to enter
into this Separation
Agreement and has not been forced or pressured in any way to sign it;
(d) She was given a
copy of this Separation Agreement on July
18, 2008 and informed that she had twenty-one (21) days within which to
consider
the Separation Agreement and that if she wished to execute this Separation
Agreement prior to expiration of such 21-day period, she should execute the
Acknowledgement and Waiver attached hereto as EXHIBIT C;
(e) She was informed that she
has seven (7) days following the
date of execution of this Separation Agreement in which to revoke this
Separation Agreement, and this Separation Agreement will become null and void
if
Executive elects revocation during that time. Any revocation must be in writing
and must be received by the Company during the seven-day revocation period. In
the event that Executive exercises her right of revocation, neither the Company
nor Executive will have any obligations under this Separation Agreement; and
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(f) Nothing in this
Separation Agreement prevents or precludes
Executive from challenging or seeking a determination in good faith of the
validity of this waiver under the ADEA, nor does it impose any condition
precedent, penalties or costs from doing so, unless specifically authorized by
federal law.
VI. NO TRANSFERRED CLAIMS.
Executive warrants and represents that
Executive has not heretofore assigned or transferred to any person not a party
to this Separation Agreement any released matter or any part or portion thereof
and she shall defend, indemnify and hold the Company and each of its Affiliates
harmless from and against any claim (including the payment of attorneys' fees
and costs actually incurred whether or not litigation is commenced) based on or
in connection with or arising out of any such assignment or transfer made,
purported or claimed.
VII. MISCELLANEOUS
A. ASSIGNMENT. This
Separation Agreement is personal in its
nature and neither of the parties hereto shall, without the consent of the
other, assign or transfer this Separation Agreement or any rights or
obligations
hereunder; PROVIDED, HOWEVER, that in the event of a merger, consolidation, or
transfer or sale of all or substantially all of the assets of the Company with
or to any other individual(s) or entity, this Separation Agreement shall,
subject to the provisions hereof, be binding upon and inure to the benefit of
such successor and such successor shall discharge and perform all the promises,
covenants, duties, and obligations of the Company hereunder.
B. NUMBER AND GENDER;
EXAMPLES. Where the context requires, as
used in this Separation Agreement, the singular shall include the plural, the
plural shall include the singular, and any gender shall include all other
genders. Where specific language is used to clarify by example a general
statement contained herein, such specific language shall not be deemed to
modify, limit or restrict in any manner the construction of the general
statement to which it relates.
C. SECTION HEADINGS.
The section headings of, and titles of
paragraphs and subparagraphs contained in, this Separation Agreement are for
the
purpose of convenience only, and they neither form a part of this Separation
Agreement nor are they to be used in the construction or interpretation
thereof.
D. GOVERNING LAW. This
Separation Agreement will be governed
by and construed in accordance with the laws of the state of California,
without
giving effect to any choice of law or conflicting provision or rule (whether of
the state of California or any other jurisdiction) that would cause the laws of
any jurisdiction other than the state of California to be applied. In
furtherance of the foregoing, the internal law of the state of California will
control the interpretation and construction of this Separation Agreement, even
if under such jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily apply.
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E. SEVERABILITY. If any
provision of this Separation Agreement
or the application thereof is held invalid, the invalidity shall not affect
other provisions or applications of this Separation Agreement which can be
given
effect without the invalid provisions or applications and to this end the
provisions of this Separation Agreement are declared to be severable.
F. ENTIRE AGREEMENT.
This Separation Agreement, together with
the Consulting Agreement, embodies the entire agreement of the parties hereto
respecting the matters within its scope. This Separation Agreement supersedes
all prior and contemporaneous agreements of the parties hereto that directly or
indirectly bears upon the subject matter hereof. Any prior negotiations,
correspondence, agreements, proposals or understandings relating to the subject
matter hereof shall be deemed to have been merged into this Separation
Agreement, and to the extent inconsistent herewith, such negotiations,
correspondence, agreements, proposals, or understandings shall be deemed to be
of no force or effect. There are no representations, warranties, or agreements,
whether express or implied, or oral or written, with respect to the subject
matter hereof, except as expressly set forth herein. Notwithstanding the
foregoing, the Non-Competition Agreement between Executive and the Company
entered into on or about the date hereof is outside of the scope of the
integration provisions of this Section VII.F.
G. MODIFICATIONS. This
Separation Agreement may not be
amended, modified or changed (in whole or in part), except by a formal,
definitive written agreement expressly referring to this Separation Agreement,
which agreement is executed by both of the parties hereto.
H. WAIVER. Neither the
failure nor any delay on the part of a
party to exercise any right, remedy, power or privilege under this Separation
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any
waiver of any right, remedy, power or privilege with respect to any occurrence
be construed as a waiver of such right, remedy, power or privilege with respect
to any other occurrence. No waiver shall be effective unless it is in writing
and is signed by the party asserted to have granted such waiver.
I. ARBITRATION. Any
dispute, claim or controversy arising out
of or relating to this Separation Agreement or the Consulting Agreement, the
enforcement or interpretation of any provision hereof or thereof, or because of
an alleged breach, default, or misrepresentation in connection with any
provision hereof or thereof, including the determination of the scope or
applicability of this agreement to arbitrate, shall be submitted to final and
binding arbitration, to be held in San Francisco, California before a sole
arbitrator (the "ARBITRATOR") selected from the American Arbitration
Association, as the exclusive forum for the resolution of such dispute;
provided, however, that provisional injunctive relief may, but need not, be
sought by either party to this Agreement in a court of law while arbitration
proceedings are pending, and any provisional injunctive relief granted by such
court shall remain effective until the matter is finally determined by the
Arbitrator. Final resolution of any dispute through arbitration may include any
remedy or relief which the Arbitrator deems just and equitable, including any
and all remedies provided by applicable state or federal statutes. At the
conclusion of the arbitration, the Arbitrator shall issue a written decision
that sets forth the essential findings and conclusions upon which the
Arbitrator's award or decision is based. Any award or relief granted by the
Arbitrator hereunder shall be final and binding on the parties hereto and may
be
enforced by any court of competent jurisdiction. The parties acknowledge and
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agree that they are hereby waiving any rights to trial by jury in any action,
proceeding or counterclaim brought by either of the parties against the other
in
connection with any matter whatsoever arising out of or in any way connected
with this Agreement or Executive's employment or the Consulting Agreement. The
parties agree that the Company shall be responsible for payment of the forum
costs of any arbitration hereunder, including the Arbitrator's fee, but that
each party shall bear its own attorneys fees and other expenses.
J. NOTICES. Any notice
required to be delivered hereunder
shall be in writing and shall be addressed:
(i) if to the Company, to:
c/o
Country Life, LLC
180
Vanderbilt Motor Parkway
Hauppauge, New York 11788
Attention: Richard Belenski
with
a copy to:
O'Melveny & Myers LLP
275 Battery Street,
Suite 2600
San
Francisco, California 94111
Attn:
Michael J. Kennedy, Esq. and Eric C.
Sibbitt, Esq.
(ii) if to
Executive, to Executive's last known
address as reflected on the books and records of the Company; or, in each case,
to such other address as such party may hereafter specify for the purpose by
written notice to the other party hereto. Any such notice shall be deemed
received on the date of receipt by the recipient thereof if received prior to
5:00 p.m. in the place of receipt and such day is a business day in the place
of
receipt. Otherwise, any such notice shall be deemed not to have been received
until the next succeeding business day in the place of receipt.
K. LEGAL COUNSEL;
MUTUAL DRAFTING. Each party recognizes that
this is a legally binding contract and acknowledges and agrees that they have
had the opportunity to consult with legal counsel of their choice. Each party
has cooperated in the drafting, negotiation and preparation of this Separation
Agreement. Hence, in any construction to be made of this Separation Agreement,
the same shall not be construed against either party on the basis of that party
being the drafter of such language. Executive agrees and acknowledges that she
has read and understands this Separation Agreement, is entering into it freely
and voluntarily, and has been advised to seek counsel prior to entering into
this Separation Agreement and has had ample opportunity to do so.
L. COUNTERPARTS. This
Separation Agreement may be executed in
any number of counterparts, each of which shall be deemed an original as
against
any party whose signature appears thereon, and all of which together shall
constitute one and the same instrument. This Separation Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
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shall bear the signatures of all of the parties reflected hereon as the
signatories. Photographic copies of such signed counterparts may be used in
lieu
of the originals for any purpose.
M. TAXES. The Company
shall have the right to withhold from
any payment hereunder or under any other agreement between the Company and
Executive the amount required by law to be withheld with respect to such
payment
or other benefits provided to Executive. Other than as to such withholding
right, Executive shall be solely responsible for any taxes due as a result of
the payments and benefits received by Executive contemplated by this Separation
Agreement.
[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK.]
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The undersigned have
read and understand the consequences of
this Separation Agreement and voluntarily sign it. The undersigned declare
under
penalty of perjury under the laws of the State of Florida that the foregoing is
true and correct.
ALLERGY RESEARCH GROUP, INC.
By: /s/ Manfred Salomon
--------------------------------
Name: Manfred Salomon
Title: President
EXECUTIVE
/s/ Susan Levine
----------------------------------
Name: Susan Levine
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EXHIBIT A
RESIGNATION LETTER
September ___, 2008
To: The Boards of Directors of
Allergy Research Group, Inc. and
Nutricology, Inc.
From: Susan Levine
I hereby resign as an
employee, officer, director, member,
manager and in any other capacity with Allergy Research Group, Inc.,
Nutricology, Inc. and each of their respective affiliates, effective as of the
date set forth above.
----------------------
Susan Levine
A-1
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EXHIBIT B
CONSULTING
AGREEMENT
THIS CONSULTING
AGREEMENT (this "AGREEMENT") is entered into
this 8th day of August 2008, by and between Susan Levine, an individual (the
"CONSULTANT"), and Allergy Research Group, Inc., a Florida
corporation (the
"COMPANY").
RECITALS
THE PARTIES ENTER THIS
AGREEMENT on the basis of the following
facts, understandings and intentions:
A. The Company desires
that the Consultant provide consulting
services to the Company as described below, on the terms and conditions
hereinafter set forth.
B. The Consultant
desires to provide such services to the
Company on such terms and conditions.
C. This Agreement,
together with that certain Employment
Separation and General Release Agreement, dated as of August 8, 2008, by and
between Executive and the Company (the "SEPARATION AGREEMENT"), shall
govern the
relationship between the Consultant and the Company from and after the
Effective
Date and supersedes and negates all previous agreements with respect to such
relationship.
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. ENGAGEMENT. The Company hereby
engages the Consultant and the
Consultant hereby accepts such
engagement, upon the terms and
conditions hereinafter set
forth, subject to the closing of the merger
of Longhorn Acquisition Corp.
with and into the Company, for the period
commencing on the closing date
of such merger (the "EffectIVE DATE")
and ending on the second
anniversary of the Effective Date, subject to
earlier termination as provided
in Section 4 herein (such period is
referred to as the
"CONSULTING TERM").
2. CONSULTING SERVICES.
2.1 SERVICES. The Consultant shall serve as
the Company's
Marketing Consultant
and perform consulting services during
the Consulting Term as
reasonably requested from time to time
on matters with which
the Consultant was familiar and/or about
which the Consultant
acquired knowledge, expertise and/or
experience during the
time that the Consultant was employed by
the Company. Such consulting
services shall include assisting
with planning and
representation of the Company at trade
shows, relevant
industry conferences and similar events, and
providing such other
advice to and consultation with the
Company and such of its
affiliates as the Company may
reasonably request.
B-1
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2.2 TIME COMMITMENT. The Consultant agrees to
devote sufficient
time to the business of
the Company and its affiliates to
accomplish the projects
assigned by the Company. The
Consultant agrees that
she will not accept other engagements
(employment, consulting
or otherwise) during the Consulting
Term that would
interfere with her ability to accomplish such
projects.
2.3 PERFORMANCE. The Consultant agrees to
honestly and faithfully
present and conduct
herself at all times during the
performance of services
for the Company. The Consultant agrees
to perform her
responsibilities hereunder in a diligent,
timely, and competent manner. The Consultant
agrees to
truthfully and
faithfully account for and deliver to the
Company all property
(including, without limitation, monies,
materials, securities,
etc.) belonging to the Company or any
of its affiliates which
the Consultant may receive from or on
account of the Company
or any of its affiliates, and that upon
the Consultant's
termination or the Company's demand the
Consultant will
immediately deliver to the Company all such
property belonging to
the Company or any of its affiliates.
3. COMPENSATION.
3.1 CONSULTING FEE. As consideration for the
Consultant's
performance of these
services, the Company shall pay the
Consultant an annual
fee of One Hundred Thousand Dollars
($100,000) (the
"CONSULTING FEE") during the Consulting Term,
such amount to be paid in substantially
equal installments in
accordance with the
Company's standard payroll schedule. The
parties expressly agree
that, except as provided below in this
Section 3, the
Consultant shall not be entitled to any other
compensation for her
services hereunder except as provided in
this Section 3.1.
3.2 REIMBURSEMENT OF EXPENSES. The Consultant
shall be entitled to
reimbursement for all reasonable
business expenses, including
reasonable business
travel expenses, the Consultant incurs
during the Consulting
Term in connection with carrying out the
Consultant's duties for
the Company; provided that (i) such
expenses are approved
in advance by the Company, and (ii) the
Consultant provides the
Company with documentation acceptable
to the Company
evidencing such expenses and such expenses are
otherwise incurred and
submitted for reimbursement in
accordance with the
Company's expense reimbursement policies
in effect from time to
time. Any such reimbursement shall be
made as soon as
reasonably practicable and in all events not
later than the end of
the calendar year following the year in
which the related
expense was incurred.
B-2
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4. TERMINATION.
4.1 TERMINATION BY THE COMPANY. The
Consultant's engagement by the
Company, and the
Consulting Term, may be terminated at any
time by the Company:
(i) with Cause (as defined in Section
4.4), or (ii) with no
less than thirty (30) days advance
notice to the
Consultant, without Cause, or (iii) in the event
of the Consultant's
death.
4.2 TERMINATION BY THE CONSULTANT. The
Consultant's engagement by
the Company, and the
Consulting Term, may be terminated by the
Consultant with no less
than thirty (30) days advance notice
to the Company.
4.3 OBLIGATIONS OF THE COMPANY UPON
TERMINATION. If the
Consultant's engagement
is terminated by the Company under
Section 4.1(i) or
4.1(iii) or by the Consultant under Section
4.2, the Consulting Term
shall terminate without further
obligations to the
Consultant other than for the payment of
any Consulting Fee
payable pursuant to Section 3.1 to the
extent earned by but
not previously paid to the Consultant as
of the Termination Date
(the "Accrued Obligations"), which
shall be paid to the
Consultant within five (5) business days
after the Termination
Date. If the Consultant's engagement is
terminated without Cause under
Section 4.1(ii), the Consulting
Term shall terminate,
and the Consultant shall be entitled to
(a) payment of any
Accrued Obligations within five (5)
business days after the
Termination Date, and (b) continued
payment of the
Consulting Fee as provi






