Document:

exv10w1

 

Exhibit 10.1

CONFIDENTIAL SEVERANCE AGREEMENT AND GENERAL

RELEASE OF CLAIMS

     THIS SEVERANCE AGREEMENT AND GENERAL RELEASE OF CLAIMS (the “Agreement”) dated as of December
14, 2006 is entered into by and between Stephen K. Onody, an individual (“Executive”), and
Lifevantage Corporation (f/k/a Lifeline Therapeutics, Inc.), a Colorado corporation
(“Lifevantage”).

     WHEREAS, Lifevantage and Executive entered into an Employment Agreement effective as of
November 28, 2005 (the “Employment Agreement”);

     WHEREAS, Lifevantage and the Executive herein desire to terminate Executive’s employment and
amend the terms of the Employment Agreement to the extent, and only to the extent, provided herein;

     NOW, THEREFORE, in consideration of the mutual promises and covenants set forth below, the
parties, intending to be legally bound, agree as follows:

          1. Termination of Employment.

     Executive’s employment with Lifevantage, including any and all director and officer positions
with Lifevantage or any partially-owned or wholly-owned subsidiary of Lifevantage, shall terminate
effective December 15, 2006 (“Termination Date”).

          2. Severance Payment.

     As full, sufficient and complete consideration for Executive’s promises and releases contained
herein, Lifevantage agrees to provide Executive the following:

	 	2.1	 	Cash Payment. Lifevantage shall provide cash payment to Executive in
the following amounts: (a) Executive’s accrued unpaid Base Salary to the Termination
Date and any bonus earned but not paid as of the Termination Date; and (b) an amount
equal to three (3) months of Executive’s Salary, at the rate in effect as of the
Termination Date, not including any bonus, benefits nor other payments, from which the
normal payroll and tax deductions will be made (the “Cash Severance”). The Cash
Severance shall be paid as follows: (i) subparagraph (a) shall be paid on the
Termination Date and (ii) subparagraph (b) shall be paid in equal installments in
accordance with Lifevantage’s normal payroll cycle during the three months following
the Termination Date.
	 
	 	2.2	 	Stock Options. As of the Termination Date, stock options for a total
of three hundred thirty three thousand three hundred and thirty three (333,333) shares
of Lifevantage’s common stock previously have vested pursuant to the Employment
Agreement and the Option, as defined in the Employment Agreement, and

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Executive’s rights to any additional vesting under the Option shall
terminate. Except as provided herein, the terms and conditions of such
Option shall continue to be governed and controlled pursuant to the
corresponding option agreement.

	 	2.3	 	Additional Benefits. Lifevantage shall provide Executive with
continued long term care insurance and medical insurance, including disability, plans
or arrangements for a period of 60 days following the Termination Date (the “Benefit
Period”). In addition, Lifevantage shall provide Executive with his personal laptop
computer and cash in lieu of any accrued vacation on the Termination Date to be paid
in the January 1, 2007 payroll payment.
	 
	 	2.4	 	COBRA Coverage. Executive shall be eligible for COBRA coverage on
the first date following the Benefit Period payable 100% by Executive.
	 
	 	2.5	 	Consulting Arrangement. In consideration for the foregoing benefits
in this Section 2, Executive agrees to provide consulting services to the Board of
Directors of Lifevantage in connection with the transition after Executive’s
employment during the three-months following the Termination Date, not to exceed 15
hours per week of commitment by Executive.

     For purposes of this Agreement, the consideration set forth in this paragraph 2 shall
collectively be referred to as the “Severance.”

          3. Additional Payment or Actions.

     Except as provided under paragraph 2 of this Agreement, Executive agrees that no additional
payments or actions of any kind are due under this Agreement or the Employment Agreement, except
that reimbursable expenses incurred by Executive prior to the Termination Date shall be paid in
accordance with Lifevantage’s established practices

          4. Acknowledgment of Additional Consideration; No Admission.

     Executive acknowledges that the payment and other undertakings described above in Section 2,
will fully discharge and satisfy all of Lifevantage’s obligations for monies and any other
consideration due to Executive by reason of his employment, including, but not limited to, all
Lifevantage’s obligations under the Employment Agreement, and that these undertakings will also
provide him with additional monies and undertakings that are not otherwise due to Executive
now, nor in the future, and that constitute valuable consideration for Executive’s release of
claims and other promises herein. This Agreement is not an admission by either Lifevantage
or Executive of any wrongdoing or liability.

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          5. Release.

     In exchange for Lifevantage’s payments and other undertakings as described herein, Executive,
for himself and his heirs, legal representatives, successors and assigns, does hereby completely
release and forever discharge Lifevantage, its parent, subsidiaries and affiliated companies, and
their respective shareholders, officers, directors, representatives, employees, former employees,
agents, attorneys, successors and assigns (herein collectively the “Releasees”) from all claims,
rights, demands, actions, obligations and causes of action of any and every kind, nature and
character, known or unknown, that Executive may now have or has ever had or will have against them
based on any act or omission that occurred through the date this Agreement is signed, including
without limitation : (a) any and all claims of “wrongful discharge,” breach of express or implied
contract, breach of the implied covenant of good faith and fair dealing, wrongful discharge in
violation of public policy, intentional infliction of emotional distress, negligent infliction of
emotional distress, fraud and defamation; (b) any tort of any nature; (c) any and all claims
arising under any federal, state, county or municipal statute, constitution or ordinance, including
but not limited to Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans with
Disabilities Act, the Employee Retirement Income Security Act, and any other laws and regulations
relating to Executive’s employment; (d) any and all claims for compensation, bonuses, severance
pay, stock options, restricted stock, vacation pay, expense reimbursement, attorneys’ fees and
costs; and (e) any and all claims for relief of any kind, regardless of the basis for such claim or
the nature of the remedy sought, subject only to the exclusion set forth in the following sentence.

          6. Return of Property.

     To the extent he has not already done so, Executive shall immediately return to Lifevantage
all of Lifevantage’s property, including all keys, credit cards, files, documents, business
records, customer records, computer discs and other Lifevantage property and assets that may be in
his possession or control. Executive shall not keep copies of any documents or other property that
he received in his capacity as an officer, employee or director of Lifevantage.

          7. Non-Disclosure Covenant.

     Executive further agrees that Executive will no discuss or otherwise disclose the terms and
conditions of this Agreement. Executive will not disclose, discuss nor reveal the monetary or other
terms of this Agreement to any other persons, entities or organizations, except his immediate
family members, attorneys, tax preparers, financial advisors, and any agency to which he is
required to report his income, unless disclosure is compelled by subpoena or other legal process or
is necessary to enforce his rights under this Agreement. In the event Executive discloses the terms
of this Agreement to any of the aforementioned individuals to whom disclosure is permitted,
Executive shall specifically advise the recipient of the confidentiality provision herein and shall
expressly condition the disclosure upon the recipient’s agreement to maintain the confidentiality
of

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this Agreement. If at any time in the future Executive believes that he may be required by
subpoena or other legal process to disclose the terms of this Agreement, he will provide written
notification to Lifevantage immediately, and in no event less than seventy-two (72) hours before
any such compelled disclosure is due to be made. Executive recognizes that Lifevantage may
disclose part or all of the terms and conditions of this Agreement.

          8. Governing Law.

     This Agreement shall be construed in accordance with the laws of the State of Colorado without
regard to the conflicts of laws provisions thereof. Venue for any adjudication hereof shall be
only in the appropriate state or federal court in Colorado, and the parties consent to personal
jurisdiction in such state and federal courts.

          9. Severability.

     The provisions of this Agreement shall be considered to be separable and independent of each
other. In the event any provision of this Agreement is found by a court of competent jurisdiction
to be invalid, such finding shall not affect the validity or effectiveness of any or all of the
remaining provisions of this Agreement.

          10. Voluntary Execution of Agreement.

     This Agreement is executed voluntarily and without any duress or undue influence on the part
or on behalf of the parties hereto, with the full intent of releasing all claims. Each party
acknowledges that (i) they have been advised by the other to consult an attorney regarding any
potential claims as well as the terms and conditions of this Agreement before executing it, (ii)
they have read the Agreement and they fully understand the terms of this Agreement including,
without limitation, the significance and consequences of the general release in Section 5 hereof,
(iii) they are executing this Agreement in exchange for consideration in addition to anything of
value to which they are entitled, and (iv) they are fully satisfied with the terms of this
Agreement and are executing this Agreement voluntarily, knowingly and willingly and without duress.

          11. Noncompetition, Nonsolicitation and Confidentiality.

     The terms and conditions set forth in Section 4, Noncompetition, Nonsolicitation, and Section
5, Confidentiality, of the Employment Agreement shall remain in full force and effect. Nothing
contained in this Agreement shall be deemed to revoke or limit in any way the provisions and
survivability of Sections 4 and 5 of the Employment Agreement.

          12. Cooperation with Legal Proceedings.

     Executive agrees to reasonably cooperate with Lifevantage and any other party upon request of
Lifevantage in the defense or prosecution of any claims or actions now in existence or that may be
brought in the future against or on behalf of Lifevantage, which relate to events or occurrences
that transpired while the Executive was employed by

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Lifevantage. Executive’s reasonable cooperation in connection with such claims or actions
shall include, but not be limited to, being available to meet with counsel to prepare for discovery
or trial and to act as a witness. Executive also agrees to reasonably cooperate, upon the request
of Lifevantage or its parent in connection with any investigation or review by any federal, state,
or local regulatory authority that relates to events or occurrences that transpired while Executive
was employed by Lifevantage.

          13. Non-Disparagement.

     As of the Termination Date, Executive agrees not to make any oral or written statements or
otherwise engage in any act that is intended or may reasonably be expected to harm the reputation,
business, prospects or operations of Lifevantage or any of its respective directors or executive
officers or any persons related to the foregoing. As of the Termination Date, Lifevantage further
agrees not to, and to use its reasonable best efforts to ensure that its directors and executive
officers will not, make any oral or written statements to employees or members of the Board of
Directors of Lifevantage or other outside individuals or otherwise engage in any act that is
intended or may reasonably be expected to harm the reputation, business or prospects of Executive.

          14. Public Statements.

     At a time to be determined in Lifevantage’s sole discretion, Lifevantage may issue a statement
for dissemination announcing Executive’s resignation. Executive will not issue any statement
either within or outside Lifevantage regarding his resignation or the terms of this Agreement
without first obtaining Lifevantage’s prior written approval, such approval not to be unreasonably
withheld, conditioned or delayed. However, Executive will, at all times, be permitted to freely
state that he has “resigned” from Lifevantage.

          15. Counterparts.

     This Agreement may be executed in any number of counterparts, each of which shall be deemed an
original and all of which together shall be deemed to be one and the same instrument.

          16. Notices.

     All notices, requests, claims, demands or other communications hereunder shall be in writing
and shall be deemed given when delivered personally, upon receipt of a transmission confirmation if
sent by telecopy or like transmission and on the next business day when sent by a reputable
overnight carrier service to the parties at the following addresses (or at such other address for a
party as shall be specified by like notice):

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If to Lifevantage:

Lifevantage Corporation

6400 South Fiddler, Suite 1750

Engelwood, CO 80111

Attention: Corporate Secretary

With a copy to:

Patton Boggs LLP

1660 Lincoln Street, Suite 1900

Denver, Colorado 80264

Attention: Alan Talesnick, Esq.

If to Executive:

Stephen K. Onody

6640 S. Waco Way

Aurora, CO 80016

          17. Entire Agreement.

     This Agreement constitutes the entire agreement between the parties and supersedes all other
agreements and understandings between them that may have related to the subject matters contained
herein. This Agreement shall not in any manner limit the obligations of Executive or rights of
Lifevantage under Sections 4, 5, 6 and 10 of the Employment Agreement; provided, however, that if
there is a conflict between the terms and conditions of this Agreement and the Employment
Agreement, the terms and conditions of this Agreement shall control. No modification, amendment nor
waiver of any of the provisions of this Agreement shall be effective unless approved in writing by
both parties.

     The parties to this Agreement have executed this Agreement as of the day and first written
above.

	 	 	 
	LIFEVANTAGE CORPORATION	 	EXECUTIVE
	 
	 	 
	By: /s/ John Van Heuvelen

	 	/s/ Stephen K. Onody
	Name: John Van Heuvelen

	 	Stephen K. Onody
	Title: Chairman
	 	 

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Exhibit 10.2

January 2, 2007

James J. Krejci

1133 Race Street 16N

Denver, Colorado 80206

Dear Mr. Krejci:

     On behalf of Lifevantage Corporation, a Colorado corporation (the “Company”), I am pleased to
formally offer you a position as the Company’s Chief Executive Officer reporting to the Company’s
Board of Directors. Pursuant to our prior verbal agreement, the effective date of your employment
was December 21, 2006.

     Base Salary. During your employment as the Company’s Chief Executive Officer, the Company
will pay you a base salary, payable in accordance with the Company’s standard schedule for salary
payments to its employees, at an annual rate of $185,000.

     Bonus. The Company may determine, in its sole discretion, whether to pay you a bonus and the
amount of any such bonus.

     Stock Options. The Company has granted you an option under the Company’s 2007 Long-Term
Incentive Plan to purchase 1,000,000 shares of the Company’s common stock for $0.61 per share. A
portion of the option that would permit you to purchase 250,000 shares vested as of your start date
of December 21, 2006. The remaining option will vest with respect to 250,000 shares on December 21,
2007, 250,000 shares on December 21, 2008, and 250,000 shares on December 21, 2009.

     Benefits. You will, to the extent applicable, be allowed to participate in any health
insurance plan, group term life insurance plan, and disability insurance plan made generally
available to executive officers of the Company. In addition, you will be reimbursed for your costs
associated with any replacement plans covering the same matters to the extent you pay directly for
such plans, you do not utilize the Company offered plans and such replacement plans are less
expensive than plans available through the Company.

     Vacation. You will be entitled to vacation and holiday time, sick leave and such other
related benefits as may be provided by the Company to its other executive officers generally from
time to time.

 

 

     At-Will. Your employment is “at-will”, meaning that both the Company and you have the right
to terminate the employment relationship at any time with or without cause or notice. In addition,
all terms and conditions of employment may be changed with our without notice or cause including,
but not limited to demotion, promotion, transfer, compensation, benefits, duties and location of
work. Proof of citizenship or immigration status and legal right to work in the United States
will be required upon employment.

     This letter agreement supersedes in all respects our prior verbal agreement with respect to
your employment. This letter constitutes our total employment agreement.

     Please confirm your agreement to and acceptance of the contents of this letter by executing it
in the area indicated below and returning a signed copy to the
Company.

     We look forward to having you lead our organization as its new Chief Executive Officer.

	 	 	 	 	 
	 	Sincerely,

 	 
	 	/s/ John Van Heuvelen
 	 
	 	John Van Heuvelen        	 
	 	Chairman of the Board of Directors

Lifevantage Corporation 	 
	 

I accept this offer of employment as outlined above:

	 	 	 
	/s/ James J. Krejci

	 	Dated: January 2, 2007
	 

James J. Krejci

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