Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT by and between Arcadia Resources, Inc., a Nevada corporation
(“Arcadia” or “Employer”), and Marvin Richardson (the “Executive”), is effective
as of August 12, 2009; and
WHEREAS, Employer desires to employ Executive in the position described herein;
and
WHEREAS, Executive desires to serve in that capacity,
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment. Employer shall employ the Executive, and the Executive shall
serve Employer and its subsidiaries, if any, on the terms and conditions set
forth in this Agreement, for the period beginning on the date hereof (the
“Employment Date”) and continuing until terminated as provided below in
Section 4 (the “Employment Period”).
2. Position and Duties.
(a) As of the date of this Agreement, and during the Employment Period, the
Executive will be employed as President and Chief Executive Officer of Employer
and such of its subsidiaries as may be determined by Employer’s Board of
Directors, performing such duties as may be designated by the Board of Directors
from time to time which shall be consistent with the general nature of the
duties and authority of a President and Chief Executive Officer in similarly
situated companies. Executive shall report to Employer’s Board of Directors.

 

 

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(b) During the Employment Period, excluding any periods of vacation and absence
due to intermittent illness to which the Executive is entitled, and any services
or activities on behalf of civic or charitable institutions that do not
significantly interfere with the performance of his responsibilities to Employer
or violate the provisions of Section 9, the Executive shall devote his full time
and attention to the business and affairs of Employer and its subsidiaries.
Except as stated in the previous sentence, during the Employment Period,
Executive shall have no other employment or business interests; provided,
however, that the Executive shall be able to invest his personal assets in
investments and entities as long as such investments do not violate Section 9
and do not require a material amount of the Executive’s time. The Executive
shall use reasonable efforts to faithfully and efficiently carry out all duties
and responsibilities assigned to him.
3. Compensation.
(a) Base Salary. During the Employment Period, the Executive shall receive an
annual Base Salary of $450,000 payable in accordance with the regular payroll
practices of Employer. The Executive’s base salary shall be reviewed annually by
Employer, in accordance with Employer’s standard practices for executives
generally, and may be increased, but not decreased, as determined by the Board
of Directors, in their sole discretion, or by any committee of the Board of
Directors to which such authority has been delegated. The parties acknowledge
that as an accommodation to the Employer, Executive agreed effective April 1,
2009 to temporarily receive a ten percent (10%) reduction in his Base Salary
(the “Reduced Base”). The amount of Executive’s Reduced Base salary is presently
$405,000 annually and shall remain in effect until March 31, 2010. All severance
payments due to Executive under this Agreement shall be calculated based on
Executive’s Base Salary, not Executive’s Reduced Base.

 

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(b) Stock Grant. Employer, per the approval of its Board of Directors, awarded
Executive effective February 21, 2007, from and subject to the terms and
conditions of the 2006 Arcadia Resources, Inc. Equity Incentive Plan and the
Plan’s restricted stock award agreement, 400,000 shares of Arcadia common stock
(the “Restricted Shares”). The Restricted Shares, until vested, shall be subject
to restrictions on transferability and held in escrow as described below. The
Restricted Shares shall vest over a four (4) year period at the rate of 25,000
shares at the end of each Arcadia fiscal quarter following the date of the
Restricted Stock award to executive (the “Vesting Date”), provided that on the
first Vesting Date of March 31, 2007 12,500 Restricted Shares became vested, on
the second Vesting Date of June 30, 2007 37,500 Restricted Shares became vested,
and on each Vesting Date thereafter, 25,000 Restricted Shares became vested or
shall vest. The Executive shall acquire rights as a shareholder in Restricted
Shares upon each Vesting Date. Any unvested portion of the stock grant shall
only by forfeited in the event of Executive’s Termination for Cause (as defined
in Paragraph 4(b) below) or in the event of Executive’s Termination without Good
Reason (as defined in paragraph 4(d) below). If the Executive’s employment is
terminated without Cause or for Good Reason, all unvested Restricted Shares
shall vest immediately upon such termination of employment.
(c) Stock Options. Subject to the terms and conditions of this Agreement and the
plan adopted by the Employer’s Board of Directors, Executive has been granted
options to purchase 1.8 million shares of the Employer’s common stock at the
strike price of $0.72 per share, of which 600,000 became vested and exercisable
on March 31, 2009. So long as Executive remains employed by the Employer,
Executive shall be entitled to exercise the remaining 1.2 million Stock Options
pursuant to the following vesting schedule: 600,000 options vested and
exercisable March 31, 2010, and 600,000 options vested and exercisable March 31,
2011. The options granted pursuant to this paragraph are subject to the
following terms and conditions:
(i) Except as otherwise described in the paragraph immediately below, Executive
shall forfeit all unvested options upon a termination of Executive’s employment.
Executive shall have one calendar year from the date of termination to exercise
any vested but not yet exercised options.

 

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(ii) Executive’s unvested options shall vest immediately upon the termination of
Executive’s employment only if the Executive’s employment is terminated without
Cause or for Good Reason within one calendar year of a Change in Control of the
Employer. Executive shall have one calendar year from the date of termination to
exercise any options vested pursuant to this paragraph.
(iii) For the purposes of this agreement, a Change in Control means the
occurrence of any of the following: (1) a reorganization, merger or
consolidation in which the Employer is not the surviving corporation, (2) a sale
of all or substantially all of the assets of the Employer to another person or
entity, (3) the acquisition of beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act) of an aggregate of 25% or more of the voting power
of the Employer’s outstanding voting securities by any single person or group
(as such term is used in Rule 13d-5 under the Exchange Act), unless such
acquisition was approved by the Employer’s Board of Directors prior to the
consummation thereof, or (4) the appointment of a trustee in a Chapter 11
bankruptcy proceeding involving the Employer or the conversion of such a
proceeding into a case under Chapter 7.
(iv) To the extent that the vesting and/or payment upon termination provisions
of this Agreement differ from such provisions in any other compensation plan
document of Employer, the provisions in this Agreement shall control.
(d) Bonus Compensation. Executive shall be eligible to participate in executive
bonus plans as approved by the Compensation Committee, including the 2008
Executive Performance Based Compensation Plan.

 

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(e) Other Benefits. To at least the same extent as other senior executives of
Employer, except as required by law or applicable government regulations, the
Executive shall be entitled to participate in: (i) any short-term and long-term
incentive, savings, and retirement plans; (ii) all practices, policies and
programs including vacation policies established by Employer; and (iii) the
Executive and/or the Executive’s family, as the case may be, shall be eligible
for participation in, and shall receive all benefits under, all welfare benefits
plans, practices, policies and programs provided by Employer.
(f) Expenses. During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by the
Executive in carrying out the Executive’s duties under this Agreement, provided
that the Executive complies with the generally applicable policies, practices
and procedures of Employer for submission of expense reports, receipts, or
similar documentation of such expenses.
(g) Vacation. Executive shall be entitled to four (4) weeks of paid vacation
leave annually.

 

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4. Termination of Employment.
(a) Death or Disability. The Executive’s employment and the Employment Period
shall terminate automatically upon the Executive’s death or Disability during
the Employment Period. “Disability” means Executive’s inability, because of
mental or physical illness or incapacity, whether total or partial, to perform
one or more primary duties of the Executive’s employment with reasonable
accommodation, and which continues for a period of one hundred eighty (180) days
within any twelve (12) month period. If any question shall arise during the
Executive’s employment hereunder regarding the Executive’s inability, because of
mental or physical illness or incapacity, whether total or partial, to perform
one or more primary duties of the Executive’s employment with reasonable
accommodation, Executive, at the request of Employer, shall submit to a medical
examination by a physician selected by Employer (the “Employer Physician”) to
determine whether the Executive is so disabled. In the event that the Executive
disagrees with the findings of the Employer Physician, Executive shall have the
right to submit to a second medical examination by a physician selected by the
Executive (the “Executive Physician”). If the Employer Physician’s and the
Executive Physician’s findings agreed with respect to Executive’s disability
status, such determination shall be binding on Employer and the Executive. If
the Employer Physician’s and the Executive Physician’s findings do not agree
with respect to Executive’s disability status, the Employer Physician and the
Executive Physician shall together designate a third physician to make the
determination with respect to Executive’s disability status and such
determination shall be binding on the Employer and the Executive. The date of
the Executive’s Disability shall be the date on which a Physician (whether
employer, Executive or third Physician) makes a final, binding determination of
Executive’s disability.
(b) By Employer. Employer may terminate the Executive’s employment under this
Agreement during the Employment Period for Cause or without Cause. “Cause”
means:
(i) The Executive’s fraud, theft or embezzlement committed with respect to
Employer, its affiliates or customers;
(ii) the continued failure by the Executive to perform his duties as
contemplated by this Agreement (other than any such failure resulting from his
Disability or any such actual or anticipated failure after the issuance by the
Executive of a Notice of Termination for Good Reason) over a period of not less
than ninety (90) days; provided however, that Employer may terminate the
Executive’s employment for “Cause” under this subdivision only if Employer has
provided notice to the Executive of his performance failures and such failures
have not been cured by the Executive within thirty (30) days of the receipt of
notice by the Executive;

 

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(iii) the willful or negligent misconduct of the Executive that is materially
injurious to Employer (including, without limitation, any breach by the
Executive of Section 9 of this Agreement), and, in the case of negligent
misconduct, such misconduct is not cured by Executive within thirty (30) days of
the receipt of notice by the Executive from Employer;
(iv) the Executive’s conviction of a misdemeanor which directly causes material
financial harm to Employer, which harm is not cured by the Executive within
thirty (30) days of the receipt of notice by the Executive from the Employer of
such harm;
(v) the Executive’s conviction of a felony (including a felony constituting a
crime of moral turpitude);
(vi) Executive’s material breach of this Agreement causing material harm to
Employer that is not cured within thirty (30) days of receipt of notice thereof
(any breach by the Executive of Section 11 of this Agreement shall be deemed a
material breach); provided that no “cure” shall be deemed to have been effected
unless both the breach and the harm have been cured;
(vii) the Executive’s breach of a fiduciary duty owed to Employer or its
Affiliates; or
(viii) the Executive’s willful failure to carry out any material directive of
Employer which does not require unlawful action nor breach this Agreement.
(ix) Provided, however, that the Executive shall be limited to one cure during
any twelve (12) month period for all descriptions of cause and only for those
causes where a cure period is permitted.

 

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(c) A termination of Executive’s employment for Cause shall be effectuated by
giving the Executive written notice (“Notice of Termination for Cause”) of the
termination, setting forth in reasonable detail the specific conduct that
constitutes Cause and the specific provision(s) of this Agreement on which
Employer relies. The Executive shall have 30 days to remedy the conduct set
forth in the Notice of Termination for Cause. A termination of Executive’s
employment for Cause shall be effective on the thirtieth business day following
the date when the Notice of Termination for Cause is given, unless the conduct
set forth in the notice is remedied by the Executive within the 30 day period;
provided, however, that the Executive shall be able to cure such conduct only
once within a twelve (12) month period.
(d) By the Executive. The Executive may terminate employment under this
Agreement for Good Reason or without Good Reason. “Good Reason” means:
(i) any reduction in the Executive’s Base Salary;
(ii) removal of the Executive from his positions as President and Chief
Executive Officer or failure to re-elect the Executive to such position, except
for “Cause” as defined in paragraph (b) above;
(iii) any change in Executive’s reporting assignment such that he is no longer
reporting to Employer’s Board of Directors, except such a change that is made by
mutual agreement between the Executive and Employer;
(iv) a material failure by Employer to comply with any provision of Sections 2
and 3 of this Agreement, other than (i) a purely monetary failure with respect
to an amount less than $5,000, (ii) a failure within Executive’s control or
(iii) an isolated, insubstantial or inadvertent failure that is not taken in bad
faith and is remedied by Employer within 15 days after receipt of written notice
thereof from the Executive;

 

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(v) any action by Employer, except as required by law or applicable government
regulations, which is specific to the Executive that would or does adversely
affect Executive’s participation in bonus or incentive plans or the Other
Benefits as described in Section 3; and
(vi) any failure by Employer to obtain from any successor in interest thereto
assent to the terms of this Agreement.
(e) A termination of employment by the Executive for Good Reason shall be
effectuated by giving Employer written notice (“Notice of Termination for Good
Reason”) of the termination, setting forth in reasonable detail the specific
conduct that constitutes Good Reason and the specific provision(s) of this
Agreement on which the Executive relies. Employer shall have 30 days to remedy
the conduct set forth in the Notice of Termination for Good Reason. A
termination of employment by the Executive for Good Reason shall be effective on
the thirtieth business day following the date when the Notice of Termination for
Good Reason is given, unless the conduct set forth in the notice is remedied by
Employer within the 30 day period; provided, however, that Employer shall be
able to cure such conduct only once within a twelve (12) month period.
(f) A termination of the Executive’s employment by the Executive without Good
Reason shall be effectuated by giving Employer at least 30 days’ advance written
notice of the termination.
(g) Date of Termination. The “Date of Termination” means the date of the
Executive’s death, the date of the Executive’s Disability, the date the
termination of the Executive’s employment under this Agreement by Employer for
Cause or without Cause or by the Executive for Good Reason or without Good
Reason, as the case may be, is effective. The Employment Period shall end on the
Date of Termination.

 

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(h) “Affiliate” of Employer means any person or entity directly or indirectly
controlling, controlled by, or under common control with, Employer. For purposes
of this definition, the terms “Control,” “Controlling,” and “Controlled” mean
the right to elect a majority of the members or the board of directors or other
comparable body responsible for management and direction of a person or entity
by contract, by virtue of share ownership or otherwise.
5.  Obligations of Employer upon Termination. If Employer terminates the
Executive’s employment under this Agreement (other than for Cause) or the
Executive terminates employment under this Agreement for Good Reason, and
provided the Executive continues to abide by the provisions of Section 9 of this
Agreement:
(a) Severance Payment. The Executive shall be entitled to a continued payment
for one year of the Executive’s Base Salary, payable in regular intervals, in
accordance with the regular payroll practices of Employer.
(b) Base Salary Reimbursement. The Executive shall be entitled to immediate
reimbursement of all unpaid Base Salary resulting from the 10% reduction in
Executive’s Base Salary described in paragraph 3(a) above. The amount of
reimbursement shall be the difference between the amount Executive should have
received in Base Salary and the amount of Reduced Base actually paid to
Executive since April 1, 2009.
(c) Pro Rata Bonus. The Executive shall receive a pro rata portion of any bonus
or incentive plan amount for that portion of the year prior to the Date of
Termination, but only to the extent the Executive’s performance measures are
likely to be achieved by the end of the fiscal year. One-half of the Executive’s
pro rata bonus shall be paid immediately upon termination of the Executive’s
employment; the other half (with appropriate adjustments to reflect actual
performance) shall be paid within 60 days of the end of the fiscal year.

 

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(d) COBRA Reimbursement. If after the Date of Termination the Executive elects
to receive continuation coverage under Employer’s group health plans pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the
Executive shall be entitled to reimbursement from the Employer for the COBRA
premium costs of medical, prescription, dental and vision coverage, if any,
under Employer’s group health plans (as in effect from time to time) for the
Executive and, to the extent permitted under COBRA, the Executive’s spouse and
eligible dependents, such reimbursement not to exceed the COBRA rates for such
coverage and, unless terminated sooner as described below, such reimbursement to
continue for one year after the Date of Termination; provided, however, that the
Executive shall be required to submit to Employer reasonable evidence of payment
by the Executive of any such COBRA premiums in order to obtain reimbursement
from Employer and that the Executive may not submit any requests for
reimbursement of such payments more than once per calendar month; provided,
further, that Employer, in its sole discretion, may elect for the first two
calendar months (or portions thereof) of the Severance Period, as applicable, to
remit any such payments directly on behalf of the Executive rather than
requiring the Executive to remit such payments and seek reimbursement therefore
from Employer; provided, further, that the obligations of Employer to reimburse
any such payments shall terminate on the date of occurrence of the first to
occur of any of the following, if any of the following should occur prior to the
end of the Severance Period: (i) the date of commencement of eligibility of the
Executive under the group health plan of any other employer or (ii) the date of
commencement of eligibility of the Executive for

 

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Medicare benefits under Title XVIII of the Social Security Act (“Medicare
Benefits”); and provided, further, that the Executive nevertheless shall be
entitled to elect COBRA continuation coverage without reimbursement under
Employer’s group health plans at the applicable COBRA premium rates through the
date that is 18 months after the Date of Termination or, if earlier, the date
that the Executive becomes covered under the group health plan of another
employer or becomes eligible for Medicare Benefits, if the obligations of
Employer to reimburse the Executive for COBRA premiums for continuation coverage
under Employer’s group health plans should terminate prior to such date.
Notwithstanding anything to the contrary set forth above, employer, in its sole
discretion, may discontinue any coverage contemplated hereunder in the event
that such continuation is not permitted under or would adversely affect the tax
status of the plan or plans of Employer pursuant to which the coverage is
provided, in which case Employer shall make supplemental severance payments to
the Executive in monthly amounts equal to the amounts to which the Executive
otherwise would have been entitled to reimbursement hereunder in respect of such
coverage for the remainder of the period that Employer otherwise would have been
obligated to make reimbursements hereunder to the Executive. Any amounts that
are reimbursed to the Executive by Employer or paid directly to the Executive as
supplemental severance payments will be considered taxable income to the
Executive and any taxes on such amounts will be the Executive’s responsibility
and subject to applicable tax withholding.
(e) Accrued Obligations. Employer shall also pay, or cause to be paid, to the
Executive, in a lump sum in cash within 30 days after the Date of Termination
certain of Executive’s accrued but unpaid cash compensation (the “Accrued
Obligations”), which shall include but not be limited to the Executive’s base
salary through the Date of Termination that has not yet been paid, any accrued
but unpaid vacation pay, and similar unpaid items that have accrued and as to
which the Executive has become entitled as of the Date of Termination, including
declared but unpaid bonuses and unreimbursed employee business expenses.

 

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(f) Death or Disability. If the Executive’s employment is terminated by reason
of the Executive’s death or Disability during the Employment Period, Employer
shall pay the Accrued Obligations to the Executive or the Executive’s estate or
legal representative, as applicable, in a lump sum in cash within 30 days after
the Date of Termination. In addition, Employer shall pay a pro-rata portion of
the Executive’s bonus to Executive or his estate or legal representative,
determined and paid in the manner set forth in subparagraph 5(c) above. Pro rata
bonuses shall be paid within 60 days of the end of the fiscal year for that
portion of the year prior to the Date of Termination but only to the extent the
Executive’s performance measures are achieved at the end of the fiscal year. In
such event, Employer shall have no further obligations under this Agreement or
otherwise to or with respect to the Executive other than for any entitlements
under the terms of any other plans or programs of Employer in which the
Executive participated and under which the Executive has become entitled to a
benefit.
(g) By Employer for Cause; By the Executive Other than for Good Reason. If the
Executive’s employment is terminate by Employer for Cause or the Executive
voluntarily terminates his employer other than for Good Reason, Employer shall
pay the Executive, or shall cause the Executive to be paid, the Executive’s base
salary through the Date of Termination that has not been paid and the amount of
any declared but unpaid bonuses, accrued but unpaid vacation pay, and
unreimbursed employee business expenses, and Employer shall have no further
obligations under this Agreement or otherwise to or with respect to the
Executive other than for any entitlements under the terms of any other plans or
programs of Employer in which the Executive participated and under which the
Executive has become entitled to a benefit.

 

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6. Tax Treatment. It is the intention of the parties that payments to be made to
the Executive whether under the terms of this Agreement or otherwise shall not
constitute “excess parachute payments” within the meaning of Section 280G of the
Internal Revenue Code of 1986 (as amended from time to time) (the “Code”) and
any regulations thereunder. If the independent accountants serving as auditors
for Employer on the date of this Agreement (or any other independent certified
public accounting firm designated by Employer) determine that any payment or
distribution by Employer to or for the benefit of the Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise) would be nondeductible by Employer under Section 280G of the Code
(or any successor provision), then the amounts payable or distributable under
this Agreement will be reduced to the maximum amount which may be paid or
distributed without causing such payments or distributions to be nondeductible.
The determination shall take into account (a) whether the payments or
distributions are “parachute payments” under Section 280G, (b) the amount of
payments and distributions under this Agreement that constitute reasonable
compensation, and (c) the present value of such payments and distributions
determined in accordance with Treasury Regulations in effect from time to time.
The Executive shall have the right to designate which payments or distributions
will be reduced.
7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
the Executive’s continuing or future participation in any plan, program, policy
or practice provided by Employer for which the Executive may qualify. Vested
benefits and other amounts that the Executive is otherwise entitled to receive
on or after the Date of Termination under any plan, policy, practice or program
of, or any contract or agreement with, Employer shall be payable in accordance
with such plan, policy, practice, program, contract or agreement, as the case
may be, except as explicitly modified by this Agreement.

 

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8. Mitigation. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement. Notwithstanding
this Section 8, the Executive shall continue to be subject to all of the
restrictions provided for in Section 9 of this Agreement during the Severance
Period.
9. Confidential Information; Non-solicitation; Non-competition.
(a) The Executive agrees and acknowledges that by reason of his employment by
and service to Employer, he will have access to, become exposed to and/or become
knowledgeable about confidential information of Employer and its Affiliates (the
“Confidential Information”) from time to time during the Employment Period,
including, without limitation, proposals, plans, inventions, practices, systems,
programs, processes, methods, techniques, research, records, supplier sources,
customer lists and other forms of business information that are not known to
Employer’s competitors, are not recognized as being encompassed within standard
business or management practices and/or are kept secret and confidential by
Employer. Executive agrees that at no time during or after the Employment Period
will he disclose or use the Confidential Information except as may be required
in the prudent course of business for the benefit of Employer, or as may be
required by law or in a legal proceeding.

 

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(b) The Executive acknowledges that Employer’s business plan is to engage in
business throughout the United States. During the Executive’s employment by
Employer and for the duration of the Restricted Period (defined below), the
Executive agrees that he will not, unless acting with the prior written consent
of Employer, directly or indirectly, own, manage, control, or participate in the
ownership, management or control of, be financially interested in, or be
employed or engaged by, or otherwise affiliated or associated with, as an
officer, director, employee, consultant, independent contractor or otherwise,
any other corporation, partnership, proprietorship, firm, association or other
business entity, which is engaged in the management, ownership or operation of
retail pharmacies in the United States or any other business that, as of the
Date of Termination, is engaged in by Employer in the United States, has been
reviewed with the Board of Directors of Employer for development to be owned or
managed by Employer, within nine (9) months of the Date of Termination, and/or
has been divested by Employer but as to which Employer has an obligation to
refrain from involvement for so long as such restriction applies to Employer;
provided, however, that the ownership of not more than 5% of the equity of a
publicly traded entity shall not be deemed to be a violation of this paragraph.
Notwithstanding the foregoing, the Executive shall be relieved of the covenants
provided for in this subsection in the event that Employer fails to make
payments to Executive as provided for in Section 5 of this Agreement and
Employer has not cured such failure within fifteen (15) calendar days after
receipt of written notice from Executive. The foregoing will be construed to
permit the Executive to own or operate an independent pharmacy or to practice as
a licensed pharmacist in an independent or retail pharmacy at any time following
the Date of Termination.
(c) The Executive also agrees that he will not, directly or indirectly, during
the Restricted Period induce any person who is an employee, officer, director,
or agent of Employer, to terminate such relationship, or employ, assist in
employing or otherwise be associated in business with any present or former
employee or officer of Employer or its Affiliates, including without limitation
those who commence such positions with Employer or its Affiliates after the Date
of Termination.

 

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(d) During the Restricted Period, the Executive shall not attempt in any manner
to contact or solicit any individual, firm, corporation or other entity (i) that
is or has been, a customer, supplier or vender or Employer or its Affiliates at
any time during the Restricted Period, (ii) to which a proposal has been made by
Employer during the Restricted Period or (iii) to which employer has made a
proposal during the nine (9) months preceding the Date of Termination, for the
purpose of implementing retail pharmacies or providing retail pharmacy or
services or products similar to the services and products provided by Employer
at the Date of Termination. In addition, during the Restricted Period, the
Executive shall not persuade or attempt to persuade any customer, supplier,
vendor, licensor or other entity or individual doing business with Employer to
discontinue or reduce its business with Employer or otherwise interfere in any
way with the business relationships and activities of Employer. For purposes of
this paragraph (d), a customer of Employer or its Affiliates includes any
retail/grocery establishment, physician’s office, clinic or any healthcare or
retail host business in which Employer or its subsidiaries has located or has
proposed to locate a pharmacy or provide pharmacy services.
(e) The Executive acknowledges and agrees that the restrictions contained in
this Section 9 are reasonable and necessary to protect and preserve the
legitimate interests, properties, goodwill and business of Employer, that
Employer would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by Employer should the
Executive breach the provisions of this Section. The Executive represents and
acknowledges that (i) the Executive has been advised by Employer to consult the
Executive’s own legal counsel in respect of this Agreement, (ii) the Executive
has consulted with and been advised by his own counsel in respect of this
Agreement, and (iii) the Executive has had full opportunity, prior to execution
of this Agreement, to review thoroughly this Agreement with the Executive’s
counsel.

 

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(f) The Executive further acknowledges and agrees that a breach of the
restrictions in this Section 9 may not be adequately compensated by monetary
damages. The Executive agrees that actual damage may be difficult to ascertain
and that, in the event of any such breach, Employer may be entitled to
injunctive relief in addition to such other legal or equitable remedies as may
be available to Employer. In the event that the provisions of this Section 9
should ever be adjudicated to exceed the limitations permitted by applicable law
in any jurisdiction, it is the intention of the parties that the provision shall
be amended such that those provisions are made consistent with the maximum
limitations permitted by applicable law, that such amendment shall apply only
within the jurisdiction of the court that made such adjudication and that those
provisions otherwise be enforced to the maximum extent permitted by law.
(g) For purposes of this Section 9, the term “Restricted Period” following the
Date of Termination means (i) if Employer terminates the Executive’s employment
without Cause or if the Executive terminates his employment with Good Reason,
the entire period during which payments to the Executive continue pursuant to
Section 5, or (ii) in any other case, a period of one (1) year following the
Date of Termination.
(h) All Confidential Information; all innovations, inventions and discoveries of
Employer; and all correspondence, files, documents, advertising, sales,
manufacturers’ and other materials or articles or other information of any kind,
in any media, form or format, whether or not deemed confidential, shall be and
remain the sole property of Employer (“Employer Property”). Upon termination or
at Employer’s request, whichever is earlier, Executive shall immediately deliver
to Employer all such Employer Property.

 

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(i) If, contrary to the effort and intent of the parties, any covenant or other
obligation contained in this Section 9 shall be found not to be reasonably
necessary for the protection of, to be unreasonable as to duration, scope or
nature of restrictions, or to impose an undue hardship on Executive, then it is
the desire of the parties that such covenant or obligation not be rendered
invalid thereby, but rather that the duration, scope or nature of the
restrictions be deemed reduced or modified, with retroactive effect, to render
such covenant or obligation reasonable, valid and enforceable. The parties
further agree that in the event a court, despite the efforts and intent of the
parties, declares any portion of the covenants or obligations in this Section 9
invalid, the remaining provisions of this Section 9 shall nonetheless remain
valid and enforceable.
10. Governing Law and Arbitration. This Agreement and all disputes arising out
of Executive’s employment hereunder shall be governed by and construed in
accordance with the laws of the State of Indiana without reference to principles
of conflict laws, notwithstanding the fact that any party hereto is or may
hereafter become domiciled or located in a different state. Any dispute,
controversy or claim arising out of or relating to this Agreement or Executive’s
employment, whether arising in contract, tort or otherwise, including all claims
assertable under any federal or state law prohibiting discrimination in
employment, shall be resolved at arbitration in accordance with the rules of the
American Arbitration Association, except for any equitable or injunctive relief
sought by Employer under this Agreement. The arbitration shall be held at a
location within Marion County, Indiana. The parties hereto agree that any
arbitration award rendered on any claim submitted to arbitration shall be final
and binding upon the parties, subject to appeal, and that judgment may be
entered upon any arbitration award by any circuit court located in Indiana or by
any other court of competent jurisdiction. The parties hereto agree that the
expenses of any arbitration shall be borne equally by the parties to the
proceeding, except that the party determined to have prevailed in any
arbitration or civil action shall be awarded its reasonable attorneys fees and
costs of its own experts, evidence and the like. The parties hereto acknowledge
and agree that by making this agreement to submit all claims to binding
arbitration, they are waiving the right to litigate in a court of law, and to
trial by jury if applicable, all claims, including all claims assertable under
any federal or state law prohibiting discrimination in employment.

 

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11. Successors.
(a) This Agreement is personal to the Executive and, without the prior written
consent of Employer, shall not be assignable by the Executive otherwise than by
will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive’s legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Employer and its successors and assigns.
(c) The Employer shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Employer expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Employer would
have been required to perform it if no such succession had taken place. As used
in this Agreement, “Employer” shall mean both Employer as defined above and any
such successor that assumes and agrees to perform this Agreement, by operation
of law or otherwise.

 

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12. Miscellaneous.
(a) The captions of this Agreement are not part of the provisions hereof and
shall have no force or effect. This Agreement may not be amended or modified
except by a written agreement executed by the parties hereto or their respective
successors and legal representatives. This Agreement supersedes all prior
agreements between Employer and Executive with respect to its subject matter,
including Executive’s employment agreements with PrairieStone, and constitutes
(along with the documents referred to in this Agreement) a complete and
exclusive statement of the terms of the Agreement between Employer and Executive
with respect to its subject matter.
(b) All notices and other communications under this Agreement shall be in
writing and shall be given by hand to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Marvin Richardson
16116 Grand Cypress Drive
Noblesville, IN 46060
If to the Employer:
Arcadia Resources, Inc.
9229 Delegates Row, Suite 260
Indianapolis, IN 46240
Attn: Chief Financial Officer
or to such other address as either party furnishes to the other in writing in
accordance with paragraph (b) of this Section. Notices and communications shall
be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision together with all
other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.

 

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(d) Notwithstanding any other provision of this Agreement, Employer may withhold
from amounts payable under this Agreement all federal, state, local and foreign
taxes that are required to be withheld by applicable laws or regulations.
(e) The Executive’s or Employer’s failure to insist upon strict compliance with
any provision of, or to assert any right under, this Agreement (including,
without limitation, the right of the Executive to terminate employment for Good
Reason pursuant to paragraph (d) of Section 4 of this Agreement) shall not be
deemed a waiver of such provision or right or of any other provision of or right
under this Agreement.
(f) this Agreement may be executed in several counterparts, each of which shall
be deemed an original, and said counterparts shall constitute but one and the
same instrument.
13. The respective rights and obligations of the parties hereunder shall survive
any termination of the Executive’s employment to the extent necessary to the
intended preservation of such rights and obligations, including, but not by way
of limitation, those rights and obligations set forth in Sections 3, 5, 6, 8 and
9.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization of the Board of Directors, Employer has caused
this Agreement to be executed in its name and on its behalf, all as of the day
and year first above written.
ARCADIA RESOURCES, INC.

             
By:
  /s/ Steven L. Zeller              
 
  Name:   Steven L. Zeller    
 
  Title:   Chief Operating Officer    
 
            EXECUTIVE           /s/ Marvin Richardson           Marvin
Richardson    

 

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