Document:

exv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS AGREEMENT by and between PrairieStone Pharmacy, LLC, a Delaware limited liability company
(hereinafter the “Company”), and John J. Brady (the “Executive”), dated and effective as of
February 15, 2007.

     WHEREAS, the Executive is a founder of the Company;

     WHEREAS, the Executive is currently employed by the Company;

     WHEREAS, the Company has been acquired by Arcadia Resources, Inc. (“Arcadia”); and

     WHEREAS, the Board of Managers of the Company (the “Board”), has determined that it is in the
best interests of the Company and its owner, Arcadia, to continue to employ Executive as an officer
of the Company and the Executive desires to serve in that capacity.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1. Employment. The Company shall employ the Executive, and the Executive
shall serve the Company 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 of the Company and such of its subsidiaries as may be
determined by the Board, performing such duties as may be designated by the Board from time to
time which shall be consistent with the general nature of the duties and authority of a President
in similarly situated companies.

          (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 the Company or violate the provisions of Section 10, the Executive shall
devote his full time and attention to the business and affairs of the Company 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 10 and do not require a material amount of the Executive’s time. The Executive shall use
reasonable efforts to carry out all duties and responsibilities assigned to him faithfully and
efficiently.

     3. Compensation.

          (a) Base Salary. During the Employment Period, the Executive shall receive
an annual base salary of $180,000 payable in accordance with the regular payroll practices of the
Company. The Executive’s base salary shall be reviewed annually by the Board, in accordance with
the Company’s standard practices for executives generally, and may be increased, but not decreased,
as determined by the Board, in its sole discretion, or by any person or persons to whom the Board
has delegated such authority.

 

 

          (b) Annual Bonus and Incentive Plans; Other Benefits. Beginning in 2007
and during the Employment Period, the Executive shall be eligible to participate in any bonus or
incentive plans that are available to the Company’s senior executives.

          (c) Other Benefits. To at least the same extent as other senior executives
of Arcadia or the Company, 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 the Company; 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
benefit plans, practices, policies and programs provided by the Company.

          (d) 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 the Company for submission of expense
reports, receipts, or similar documentation of such expenses.

          (e) Automobile Allowance. The Company will provide Executive with an
automobile allowance of $750 per month throughout the term of this Agreement.

          (f) Carry Over of Vacation. Executive shall be entitled to four (4) weeks
of paid vacation/holiday leave annually.

     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) 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 the Company, shall submit to
a medical examination by a physician selected by the Company (the “Company Physician”) to determine
whether the Executive is so disabled. In the event that the Executive disagrees with the findings
of the Company 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 Company Physician’s
and the Executive Physician’s findings agree with respect to Executive’s disability status, such
determination shall be binding on the Company and the Executive. If the Company Physician’s and
the Executive Physician’s findings do not agree with respect to Executive’s disability status, the
Company 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 Company and the Executive. The date of the Executive’s Disability shall be the date
on which a Physician (whether Company, Executive or third Physician) makes a final, binding
determination of Executive’s disability.

          (b) By the Company. The Company may terminate the Executive’s employment
under this Agreement during the Employment Period for Cause or without Cause. “Cause” means:

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               (i) The Executive’s fraud, theft or embezzlement committed with respect to the
Company, 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 the Company may only
terminate the Executive’s employment for “cause” under this subdivision only if the Company 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;

               (iii) the willful or negligent misconduct of the Executive that is materially
injurious the Company (including, without limitation, any breach by the Executive of Section 10 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 the Company;

               (iv) the Executive’s conviction of a misdemeanor which directly causes material
financial harm to the Company, which harm is not cured by the Executive within thirty (30) days of
the receipt of notice by the Executive from the Company 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 the
Company that is not cured within thirty (30) days of receipt of notice thereof (any breach by the
Executive of Section 11of 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 the Company or its
Affiliates; or

               (viii) the Executive’s willful failure to carry out any material directive of the
Board 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.

          (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 the Company 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:

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               (i) any reduction in the Executive’s base salary;

               (ii) removal of the Executive from his position as President, or failure to elect or
re-elect the Executive to such position, except for “Cause” as defined in paragraph (b) above;

               (iii) a material failure by the Company 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 the Company within 15 days
after receipt of written notice thereof from the Executive;

               (iv) any action by the Company, 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 Sections 3(b)
and/or 3(c); and

               (v) failure by the Company 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 the Company 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. The Company 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 the Company within the 30 day period; provided,
however, that the Company 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 effected by giving the Company 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 the Company 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. For all purposes of this Agreement, no termination of
the Executive’s employment shall be deemed to have occurred if the Executive’s employment is
transferred during the Employment Period from one PrairieStone Pharmacy Affiliate as the employer
to another PrairieStone Pharmacy Affiliate as the employer.

          (h) “Affiliate” of the Company or any other person or entity means any person or
entity directly or indirectly controlling, controlled by, or under common control with, such first
person or entity. For purposes of this definition, the terms “Control,” “Controlling,” and
“Controlled” mean having 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 by contract, by virtue
of share ownership or otherwise.

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     5. Obligations of the Company upon Termination.

          (a) Termination During Initial 36 Months. If, during the first 36 months of the
Employment Period, the Company terminates the Executive’s employment (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, all of the Executive’s
employment compensation and benefits in effect on the Date of Termination shall be continued in
effect until the latter of (i) 36 months after the effective date of this Agreement, or (ii) 12
months after the Date of Termination.

          (b) Termination After Initial 36 Months. If, after the initial 36 months of
the Employment Period, the Company terminates the Executive’s employment under this Agreement
(other than for Cause) or the Executive terminates employment under this Agreement for Good Reason
(any such termination of employment being a “Section 5(b) Termination”) and provided the Executive
continues to abide by the provisions of Section 9 of this Agreement:

               (i) the Executive shall be entitled to a continued payment for one year of the
Executive’s current base salary (as in effect on the Date of Termination), payable in regular
intervals, in accordance with the regular payroll practices of the Company;

               (ii) 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 achieved at the end of the fiscal year. Pro rata bonuses
shall be paid within 60 days of the end of the fiscal year. 

               (iii) if after the Date of Termination the Executive elects to receive continuation
coverage under the Company’s group health plans pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”), the Executive shall be entitled to reimbursement from the
Company for the COBRA premium costs of medical, prescription, dental and vision coverage, if any,
under the Company’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 the Company reasonable
evidence of payment by the Executive of any such COBRA premiums in order to obtain reimbursement
from the Company and that the Executive may not submit any requests for reimbursement of such
payments more than once per calendar month; provided, further, that the Company, 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 the Company;
provided, further, that the obligations of the Company 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 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 the Company’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
the Company to reimburse the Executive for COBRA premiums for continuation coverage under the
Company’s group health plans should terminate prior to such date. Notwithstanding anything to the
contrary set forth

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above, the Company, 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 the Company pursuant to which the coverage is provided, in which
case the Company 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 the Company otherwise
would have been obligated to make reimbursements hereunder to the Executive. Any amounts that are
reimbursed to the Executive by the Company 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.

               (iv) the Company 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.

          (c) Death or Disability. If the Executive’s employment is terminated by
reason of the Executive’s death or Disability during the Employment Period, the Company 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, the
Company 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(a)(ii) 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, the Company 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 the Company in which the
Executive participated and under which the Executive has become entitled to a benefit.

          (d) By the Company for Cause; By the Executive Other than for Good Reason.
If the Executive’s employment is terminated by the Company for Cause or the Executive voluntarily
terminates his employment other than for Good Reason, the Company 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 the Company 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 the Company in which the Executive
participated and under which the Executive has become entitled to a benefit.

     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 the Company on the date of this Agreement (or any other
independent certified public accounting firm designated by the Company) determine that any payment
or distribution by the Company 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 the Company 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

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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 the Company 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, the Company 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.

     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 the Company, he will have access to, become exposed to and/or become knowledgeable about
confidential information of the Company 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 the
Company’s competitors, are not recognized as being encompassed within standard business or
management practices and/or are kept secret and confidential by the Company. 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 the
Company, or as may be required by law or in a legal proceeding.

          (b) The Executive acknowledges that the Company’s business plan to engage in
business throughout the United States. During the Executive’s employment by the Company 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 the Company, 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 the Company in the United
States, has been reviewed with the Board of Managers for development to be owned or managed by the
Company, within nine (9) months of the Date of Termination, and/or has been divested by the Company
but as to which the Company has an obligation to refrain from involvement for so long as such
restriction applies to the Company; 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 the Company fails to make payments to Executive as provided for
in Section 5(a) or (b) of this Agreement and the Company 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

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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 the Company,
to terminate such relationship, or employ, assist in employing or otherwise be associated in
business with any present or former employee or officer of the Company or its Affiliates, including
without limitation those who commence such positions with the Company or its Affiliates after the
Date of Termination.

          (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 vendor of the Company or its Affiliates at any time during the Restricted
Period, (ii) to which a proposal has been made by the Company during the Restricted Period or (iii)
to which the Company 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 the Company 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 the Company to discontinue or reduce its business with the Company or otherwise interfere in
any way with the business relationships and activities of the Company. For purposes of this
paragraph (d), a customer of the Company or its Affiliates includes any retail/grocery
establishment, physicians office, clinic or any healthcare or retail host business in which the
Company 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 the Company, that the Company would not have entered into this
Agreement in the absence of such restrictions and that irreparable injury will be suffered by the
Company should the Executive breach the provisions of this Section. The Executive represents and
acknowledges that (i) the Executive has been advised by the Company 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.

          (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, the Company
may be entitled to injunctive relief in addition to such other legal or equitable remedies as may
be available to the Company. 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) If the Executive breaches his obligations under this Section 9, he agrees that
suit may be brought, and that he consents to personal jurisdiction, in the United States District
Court for the District of Minnesota, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Minneapolis, Minnesota; consents to the
exclusive jurisdiction of any such court in any such suit, action or proceeding; and waives any
objection which he may have to the laying of venue of any such suit, action or proceeding in any
such court.

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           (h) For purposes of this Section 9, the term “Restricted Period” following the Date
of Termination means (i) if the Company terminates the Executives 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(a) or 5(b), or (ii) in any other case, a period of
one (1) year following the Date of Termination.

          (i) All Confidential Information; all innovations, inventions and discoveries of the
Company; 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 the Company (“Company
Property”). Upon termination or at the Company’s request, whichever is earlier, Executive
shall immediately deliver to the Company all such Company Property.

          (j) 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 the Company, 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. Successors.

          (a) This Agreement is personal to the Executive and, without the prior written
consent of the Company, 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 Company and
its successors and assigns.

          (c) The Company 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 Company expressly to assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, “Company” shall mean both the Company as
defined above and any such successor that assumes and agrees to perform this Agreement, by
operation of law or otherwise.

     11. Miscellaneous.

          (a) This Agreement shall be governed by, and construed in accordance with, the laws
of the State of Minnesota, without reference to principles of conflict of laws. 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.

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          (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:

John J. Brady

7928 Preservation Drive,

Indianapolis, Indiana 46278

If to the Company:

PrairieStone Pharmacy, LLC

2800 Campus Drive, Suite 30

Plymouth, MN 55441

Attn: Alan Lotvin

With a copy to:

Arcadia Resources, Inc.

405 5th Avenue South, Suite 6

Naples, Florida 34102

Attn: President and CEO

or to such other address as either party furnishes to the other in writing in accordance with this
paragraph (b) of Section 11. 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.

          (d) Notwithstanding any other provision of this Agreement, the Company 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 the Company’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 (c) of Section
5 of this Agreement) shall not be deemed to be 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.

     12. 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.

10

 

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization of the Committee, the Company has caused this Agreement to be executed in its name on
its behalf, all as of the day and year first above written.

	 	 	 	 	 
	PRAIRIESTONE PHARMACY, LLC

 	 	 
	By:  	/s/  Marvin R. Richardson
 	 	 
	 	Name:  	Marvin R. Richardson 	 	 
	 	Title:  	President and CEO 	 	 
	 
	EXECUTIVE
	 
	
/s/ John J. Brady	 	 
	John J. Brady
	 	 	 
	 

11exv10w2

 

Exhibit
10.2

EMPLOYMENT AGREEMENT

     THIS AGREEMENT (“Agreement”) is made as of the effective date designated below (“Effective
Date”), by and between Care Clinic, Inc., a Delaware corporation, (“Employer”) and the undersigned
individual (“Employee”). Arcadia Resources, Inc. (“KAD”), a Nevada corporation and parent of
Employer, joins in the execution of this Agreement solely for purposes of Section 3(I) herein.

Recitals

     Subject to the terms of this Agreement, Employer desires to employ, or continue the employment
of, Employee in the position(s) set forth herein, and Employee desires to accept such employment.

     NOW, THEREFORE, in consideration of the recitals and covenants herein and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto
agree as follows:

     1. Employment. Beginning on the Effective Date, Employer agrees to employ, or to
continue the employment of, Employee and Employee hereby accepts such employment, subject to and
contingent on the terms specified herein.

     2. Duties and Responsibilities. Employee shall serve in the position(s) designated
below on a full-time basis and shall report to Employer’s President and CEO. Employer may
hereafter change Employee’s reporting relationships upon obtaining Employee’s written consent which
shall not be unreasonably withheld. Employee shall perform such duties and responsibilities as are
consistent with and required by such position(s) held by Employee and/or assigned by Employer and
subject to Employer’s policies and procedures applicable to its employees generally. Employee
agrees to use Employee’s best efforts to perform any and all such duties and responsibilities
necessary or appropriate to perform the functions of such position(s). Employee shall have the
right to determine the location at which such employment services will be provided. While employed
by Employer, Employee agrees not to work for any other business or enterprise, whether as an
employee, agent, independent contractor or in any other capacity whatsoever. For purposes of this
Agreement, all matters requiring or permitting the agreement, consent, or other determination or
action of Employer shall be made by Employer’s Board of Directors or Employer’s Chairman of the
Board.

     3. Compensation and Benefits. Employer agrees to pay and provide Employee, and
Employee agrees to accept in full consideration for Employee’s services to Employer, the following:

     A. Salary. An annual base salary in the amount designated below (“Annual Base
Salary”), less applicable withholdings, payable in accordance with the normal payroll
practices of Employer. Employee’s Annual Base Salary may be increased by Employer from time
to time in the discretion of Employer’s Board of Directors and will be subject to annual
review by the Board of Directors.

 

 

     B. Vacation and Sick Time. Employee shall be entitled to take three (3) weeks
paid vacation during the first year of employment and four (4) weeks of paid vacation
annually during the second and subsequent years of employment, plus a limited amount of paid
time off for sickness, disability, or other personal reasons in accordance with the
Employer’s general time-off policies in effect from time to time for its employees. There is
no cash payment for unused vacation and other unused paid time off benefits. Unused vacation
and other unused paid time off benefits do not carry over from year to year.

     C. Fringe Benefits/Retirement Plan. Employee shall be entitled to health care
benefits, and additionally to participate in such additional fringe benefits and qualified
retirement plans and other plans offered by Employer to its employees generally from time to
time, in accordance with Employer’s eligibility and participation provisions of such plans.

     D. Expense Reimbursement. The Employer shall reimburse Employee all reasonable
out-of-pocket expenses incurred by Employee in connection with the performance of duties
hereunder and upon Employee’s submission of such receipts and records as Employer requires to
evidence such expenses.

     E. Annual Bonus. Employer’s Board of Director’s, in its discretion, will
establish an annual Employee bonus compensation plan.

     F. [Intentionally Omitted]

     G. D& O Insurance. During the term of Employee’s employment and for a
period of three years thereafter, Employer shall at all times keep in place a directors and
officers’ liability insurance policy (or policies).

     H. Indemnification. The Employer agrees that (i) if the Employee is made
a party, or is threatened to be made a party, to any proceeding by reason of the fact that he
is or was a director, officer, employee, agent or representative of the Employer or was
serving at the request of Employer as a director, officer, employee, agent or representative
of another person or entity or (ii) if any claim is made, or threatened to be made, that
arises out of or relates to the Employee’s service in any of the foregoing capacities, then
the Employee shall promptly be indemnified and held harmless by the Employer to the fullest
extent legally permitted or authorized by the Employers’ certificate of incorporation, bylaws
or board of directors resolutions or, if greater, by the laws of the State of Florida,
against any and all costs, expenses, liabilities and losses (including without limitation,
attorney’s fees, judgments, interest, expenses of investigation, penalties, fines, and
amounts paid or to be paid in settlement) incurred or suffered by the Employee in connection
herewith, if the Employee acted in good faith and in a manner he or she reasonably believed
to be in, or not opposed to, the best interests of the Employer and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the Employee’s conduct was
unlawful, and such indemnification shall continue as to the Employee even if the Employee has
ceased to be a director, officer, employee, agent, or representative of the Employer or any
other person or entity and shall inure to the benefit

 

 

of the Employers heirs, executors and administrators. Employer shall advance to the
Employee all costs and expenses reasonably incurred by the Employee in connection with a
proceeding or claim within fifteen (15) days after receiving written notice of such costs and
expenses and requesting such an advance. Such notice shall include an undertaking by the
Employee to repay the amount advanced if the Employee is ultimately determined not to be
entitled to indemnification against such costs and expenses. For the purposes of this
Agreement, “proceeding” shall mean any threatened or actual action, suit, or proceeding
(whether civil, criminal, administrative, investigative, appellate or other) and “claim”
shall mean any claim, demand, request, investigation, dispute, controversy, threat, discovery
request, or request for testimony or information.

Notwithstanding the foregoing, indemnification or advancement of expenses shall not be made
to or on behalf of the Employee, if a judgment or other final adjudication establishes that
Employee’s actions, or omissions to act, were material to the cause of action so adjudicated
and constitute:

(a) A violation of the criminal law, unless the Employee had reasonable cause to
believe Employee’s conduct was lawful or had no reasonable cause to believe Employee’s
conduct was unlawful;

(b) A transaction from which the Employee derived an improper personal benefit
within the scope of Section 831 of the Florida Business Corporation Act;

(c) A circumstance under which the liability provisions of Section 834 (unlawful
distributions) of the Florida Business Corporation Act are applicable; or

(d) Willful misconduct or a willful disregard for the best interests of the Employer in
a proceeding by or in the right of the Employer to procure a judgment in its favor or in a
proceeding by or in the right of a shareholder.

Notwithstanding anything in this Agreement to the contrary, Employee shall not be entitled to
the rights of indemnification provided in this Section 3(H) in the event that Employee’s
employment is terminated by Employer for cause pursuant to Section 4(c)(i), 4(c)(ii) or
4(c)(iii) as a result of said event.

     I. Equity Compensation. KAD restricted shares of common stock (the “KAD
Restricted Shares”), and the Care Clinic, Inc. restricted shares of common stock (the “CCI
Restricted Shares”) as referenced herein are sometimes referred to individually as a
“Security” or collectively as the “Securities.” All Securities shall be non-assessable and
subject to the same rights, privileges, preferences and distributions as the same class of
Securities held by other holders. The term “Issuer” shall mean Arcadia Resources, Inc. in
the case of the KAD Restricted Shares and shall mean Care Clinic, Inc. in the case of the CCI
Restricted Shares. The term “CCI Divestiture” shall mean the acquisition of the beneficial
ownership under the Securities Exchange Act of 1934 of 51% percent or more of the voting
securities of Care Clinic, Inc., from the shares of CCI common stock held by KAD, or all or
substantially all of CCI’s assets, by a single person or entity or a group of affiliated
persons or entities unaffiliated with Arcadia Resources, Inc. or Care Clinic, Inc.

 

 

	 	(1)	 	KAD Restricted Shares. Conditioned and contingent on
compliance by Employee with all terms and conditions specified in this
Agreement, Employee will be awarded 300,000 KAD Restricted Shares which are
restricted as to transferability and additionally subject to forfeiture in the
event that Employee is not employed by the Employer as of each vesting date
(the “Vesting Date”) in subsection (a), subject to subsections (b) and (c)
below. Employee will acquire rights as a shareholder in the KAD Restricted
Shares upon each Vesting Date. Vested Securities shall not be subject to
forfeiture under any circumstance or for any reason.

	 	a.	 	Vesting. Subject to acceleration or
forfeiture as specified in section (1) immediately above and subject to
subsections (b) and (c) below, the Employee’s KAD Restricted Shares
shall vest in four (4) equal installments as follows:

	 	(1)	 	25% of the Employee’s KAD
Restricted Shares shall vest on April 1, 2007;
	 
	 	(2)	 	An additional 25% of the
Employee’s KAD Restricted Shares shall vest on April 1, 2008;
	 
	 	(3)	 	An additional 25% of the
Employee’s KAD Restricted Shares shall vest on April 1, 2009;
and
	 
	 	(4)	 	An additional 25% of the
Employee’s KAD Restricted Shares shall vest on April 1, 2010; on
which date all of the Employee’s KAD Restricted Shares shall be
vested.

	 	b.	 	Accelerated Vesting. All of the
Employee’s KAD Restricted Shares, other than those forfeited, shall
vest immediately upon the first to occur of (a) a Change in Control, or
(b) the CCI Divestiture, provided that Employee is employed by
Employer as of either such event.

	 	(2)	 	CCI Restricted Shares. Conditioned and contingent on
compliance by Employee with all terms and conditions specified in this
Agreement, Employee will be awarded or will be permitted to purchase 18,000
shares of shares of CCI common stock which are restricted as to transferability
and additionally subject to forfeiture in the event that Employee is not
employed by the Employer as of each vesting date (the “Vesting Date”) in
section (a) below. Employee will acquire rights as a shareholder in the CCI
Restricted Shares upon each Vesting Date.

	 	a.	 	Vesting. Subject to forfeiture, the
Employee’s CCI Restricted Shares shall vest in two (2) equal
installments as follows:

	 	(1)	 	50% of the Employee’s CCI
Restricted Shares shall vest on September 1, 2007; and

 

 

	 	(2)	 	An additional 50% of the
Employee’s CCI Restricted Shares shall vest on September 1,
2008, on which date all of the Employee’s CCI Restricted Shares
shall be vested.

	 	b.	 	Transferability Restriction and KAD Right
of First Refusal. Prior to the consummation of the CCI
Divestiture, Employee agrees not to sell or otherwise transfer any
interest in any of the CCI Restricted Shares to any third party, except
as follows: (i) Employee shall first present the opportunity to KAD in
writing the (“Sale Notice”) and (ii) KAD, in its discretion, may elect
to purchase the CCI Restricted Shares on the same terms and conditions
as presented or, if KAD does not choose to purchase the CCI Restricted
Shares, it shall give its written consent to the proposed sale or other
transfer within ten (10) business days of receipt of the Sale Notice.
Except as set forth herein, Employee agrees not to sell or otherwise
transfer any interest in any of the CCI Restricted Shares to any third
party prior to the consummation of the CCI Divestiture.
Notwithstanding the foregoing and subject to the other terms and
conditions of this Agreement, Employee may transfer Employee’s CCI
Restricted Shares, in the case of Employee’s death, by will or the laws
of descent and distribution or, during Employee’s lifetime, to
Employee’s “family member” (as defined in Form S-8) through gift or
domestic relations order as permitted by Form S-8 (as currently in
effect or as it may be amended).
	 
	 	c.	 	Employee Put Right. In the event the
CCI Divestiture is not consummated by September 1, 2008 and provided
that Employee is then and remains employed by CCI through the closing
date referenced below, and that the holders of a majority of the CCI
Restricted Shares held by the Employee Management Team then employed by
Employer has given KAD written notice obligating KAD to purchase all of
their CCI Restricted Shares at a price equal to the fair market value
per share, as of the last day of the fiscal quarter most recently ended
before the date of Employee’s notice, determined by an independent
appraisal, Employee may also then give KAD written notice to purchase
all of Employee’s CCI Restricted Shares at the same time for the same
valuation. The appraiser shall be appointed by and mutually acceptable
to KAD and Employee, which acceptance shall not be unreasonably
withheld. KAD and Employee shall share equally in the cost of the
appraisal and hereby agree to be bound by the valuation determined
thereby. At its election, KAD may pay up to 50% of the purchase price
in shares of KAD stock, with the balance paid in cash at closing. KAD
and Employee shall reasonably cooperate to complete and close the sale
and purchase within 120 days of the date of Employee’s notice to KAD.

 

 

	 	d.	 	Shareholding Position. KAD agrees that
prior to consummation of the CCI Divestiture, up to 1,000,000 shares of
CCI common stock shall be authorized and issued, with up to 110,000
shares being held by the Employee Management Team including Employee
and an additional 40,000 shares of CCI common stock being reserved for
future employees (collectively, the 150,000 CCI Restricted Shares shall
be known as the “Management CCI Restricted Shares”).

	 	(3)	 	Nature of Securities. All Management KAD Restricted
Shares shall be issued pursuant to the Arcadia Resources, Inc. 2006 Equity
Compensation Plan or other available plan contingent on and subject to approval
by KAD’s shareholders and listing on AMEX, and compliance with all terms and
conditions specified therein. KAD represents and warrants that the 2006 Equity
Compensation Plan and the Management KAD Restricted Shares to be issued
thereunder are approved by the KAD Board of Directors. KAD represents that it
shall use its best efforts to fully comply with all applicable AMEX rules and
regulations relative to issuance of the KAD Restricted Shares.
	 
	 	(4)	 	Change in Control. “Change of Control” shall mean, for
purposes of this Agreement, the occurrence of any of the following: (i)
reorganization, merger or consolidation with an unaffiliated entity and in
which KAD is not the surviving corporation, except as determined otherwise by
the KAD Board of Directors, (ii) a sale of all or substantially all of the
assets of KAD to another person unaffiliated with Arcadia Resources, Inc. or
Care Clinic, Inc., (iii) 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 KAD’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 KAD Board of Directors prior to the
consummation thereof, or (iv) the appointment of a trustee in a Chapter 11
bankruptcy proceeding involving KAD or the conversion of such a proceeding into
a case under Chapter 7.
	 
	 	(5)	 	Registration of Securities. Arcadia Resources, Inc.
agrees to file with the U.S. Securities and Exchange Commission a registration
statement within six months from the execution of this Agreement on form S-8 or
such other form as Arcadia may be eligible to register the award and resale of
the KAD Restricted Shares and to comply with the undertakings specified by the
Commission’s rules relative to the filing of post-effective amendments for such
registration form. Employee agrees that all sales and transfers of any
interest in the KAD Restricted Shares shall be made in compliance with
applicable federal and state law, this Agreement and KAD’s policies on insider
trading in effect from time to time applicable to employees of KAD and its
subsidiaries which shall not be arbitrarily applied and which generally
prohibit trading ten calendar days before the

 

 

	 	 	 	end of a fiscal quarter through the first trading day after KAD’s earnings
release or as determined by KAD due to an individual’s possession of
material, non-public information. In the event that Employee seeks to sell,
assign, transfer or otherwise dispose of Securities on the basis of an
exemption from registration under the Securities Act of 1933, as amended,
and under the provisions of applicable state law, Employee shall provide to
Arcadia, at Employee’s cost, an opinion of Employee’s counsel reasonably
acceptable to the effect that the transaction is exempt from registration,
and Arcadia shall issue appropriate instructions to its transfer agent at no
cost necessary to effectuate the sale.
	 
	 	(6)	 	Adjustments Upon Changes in Capitalization. In the
event of changes in the outstanding securities of the Issuer by reason of
distributions, dividends, splits, reverse splits, recapitalizations, mergers,
consolidations, combinations or exchanges of units or shares, reorganizations,
or liquidations, the number of Securities to be issued pursuant to the KAD
Restricted Shares and the CCI Restricted Shares shall be correspondingly
adjusted, so that Employee’s proportionate interest in the Issuer, any
successor thereto, or in the cash, assets or other securities into which the
Securities are converted or exchanged, shall be maintained to the same extent,
as near as may be practicable, as immediately before the occurrence of any such
event. Furthermore, in the event of offerings of shares of common stock of CCI
or any other securities which shall be convertible into shares of common stock
of CCI for a purchase price up to Twenty ($20,000,000) Million Dollars, the
number of Employee’s CCI Restricted Shares shall be correspondingly adjusted,
so that Employee’s proportionate interest in the Issuer, any successor thereto,
or in the cash, assets or other securities into which the Securities are
converted or exchanged, shall be maintained to the same extent, as near as may
be practicable, as immediately before the occurrence of any such sale;
provided, however, that this provision shall not apply to subsequent offerings
after the Twenty ($20,000,000) Million Dollar threshold is reached; and further
provided that if the first such offering exceeds Twenty ($20,000,000) Million
Dollars, the preceding anti-dilution provision shall apply.
	 
	 	(7)	 	Non-Transferability of the Securities. Subject to any
express terms and conditions of this Agreement to the contrary, the Securities
shall not be transferable until each restriction specified herein shall
terminate. Notwithstanding the foregoing and subject to the other terms and
conditions of this Agreement, Employee may transfer Employee’s Securities, in
the case of Employee’s death, by will or the laws of descent and distribution
or, during Employee’s lifetime, to Employee’s “family member” (as defined in
Form S-8) through gift or domestic relations order as permitted by Form S-8 (as
currently in effect or as it may be amended). Upon the vesting of the
Securities pursuant to the Vesting Schedules herein, the Employee shall be
entitled to sell the Securities subject to and

 

 

	 	 	 	in compliance with all applicable federal and state securities laws, the
terms of this Agreement and KAD’s policies on insider trading in effect from
time to time applicable to employees of KAD and its subsidiaries which shall
not be arbitrarily applied and which generally prohibit trading ten calendar
days before the end of a fiscal quarter through the first trading day after
KAD’s earnings release or as determined by KAD due to an individual’s
possession of material, non-public information.
	 
	 	(8)	 	Award Agreements. The KAD Restricted Shares and the CCI
Restricted Shares shall be evidenced by award agreements and such other
documents and terms as Employer shall require that are consistent with the
terms described in this Agreement.
	 
	 	(9)	 	Tax Obligations and Withholdings. Employee shall be
responsible for all tax obligations arising from the Securities awarded
hereunder. Employee shall cooperate as Employer deems necessary for the
withholding of taxes.

     4. Termination of Employment and Obligation Upon Termination of Employment.
Employee’s term of employment shall commence on the Effective Date and shall continue until
terminated as follows:

     A. Termination without Cause. Employer may terminate the Employee without
cause upon ten (10) business days written notice. If the Employer terminates Employee’s
employment without cause, Employer shall pay Employee the unpaid Annual Base Salary and
benefits earned and accrued, plus all unreimbursed expenses through such date, plus the
Employer shall pay, as severance, an amount equal to (i) six (6) months of Employee’s Annual
Base Salary at the rate in effect on the date of termination, if employment terminates
within one year of the Effective Date of this Agreement, and (ii) an amount equal to twelve
(12) months of Employee’s Annual Base Salary at the rate in effect on the date of
termination, if employment terminates after the completion of one year from the Effective
Date of this Agreement or thereafter. Such severance amount, less applicable withholdings,
shall be paid over six (6) months if Employee is terminated pursuant to Section 4A(i) or
twelve (12) months if Employee is terminated pursuant to Section 4A(ii), respectively,
following the termination of Employee’s employment in accordance with Employer’s normal
payroll practices. No interest shall be paid on the severance amounts set forth in this
paragraph. Termination without cause shall include a termination by the Employer due to the
failure of Employee to fully achieve all of any one or more, including any subpart, of the
applicable annual Management by Objectives (“MBO”) goals specified in the Addendum (attached
to this Agreement and incorporated herein by this reference) or as the same may be amended
in writing by Employer and Employee.

     B. Termination Upon Death or Disability. Employee’s employment hereunder shall
terminate upon the death or disability of the Employee. For purposes of this Agreement,
“Disability” of the Employee will be deemed to have occurred whenever the Employee has
suffered physical or mental illness, injury, or infirmity that prevents the Employee from
performing, with or without reasonable accommodation, the Employee’s

 

 

essential job functions under this Agreement for a period of ninety (90) consecutive
days; provided that the ninety (90) day period shall be available to Employee only once
during any twenty-four month period. In the event of a termination due to death or
Disability, Employer shall be obligated to pay Employee or Employee’s estate, the amount of
any unpaid Annual Base Salary earned and accrued through the date of termination, together
with any unreimbursed expenses.

     C. Termination For Cause. Employee’s employment may be terminated by the
Employer for cause upon written notice from the Employer specifying in detail the particular
events and circumstances upon which the Employer is relying in terminating Employee’s
employment for cause. The Employee shall have ten (10) business days following receipt of
the written notice to correct such events and circumstances. In the event that Employee
does not correct such events and circumstances at the end of the ten (10) day notice period,
he may be terminated for cause, If the Employer terminates Employee for cause, it shall only
be obligated to pay Employee the amount of any unpaid Annual Base Salary earned and accrued
through the date of termination, together with any unreimbursed expenses. For the purposes
of this agreement “cause” means any of the following:

     (i) The conviction by Employee of any crime involving moral turpitude;

     (ii) The conviction by Employee of, or pleading guilty or no contest to, any crime,
whether or not involving the Employer, constituting a felony in the jurisdiction involved,
which Employer, in its sole discretion, determines may have an injurious effect on it;

     (iii) The Employee’s gross negligence, willful misconduct, insubordination, or the
willful and repeated failure or refusal to perform such duties as may be properly delegated
to Employee by Employer hereunder; or

     (iv) The Employee’s failure to act in the best interest of the Employer consistent with
Employee’s fiduciary duty as defined by law or the non-performance of Employee’s duties
provided such duties are normally associated with Employee’s position and not violative of
applicable laws; provided, however, that termination hereunder for cause shall not include a
termination by the Employer due to Employee’s failure to fully achieve all of any one or
more, including any subpart, of the applicable annual MBO goals per Section 4(A).

     D. Termination For Good Reason. Employee may terminate this Agreement for
“Good Reason” at any time by written notice to the Employer. “Good Reason” shall be limited
to the following circumstances: (i) a material breach of this Agreement by the Employer
which is not cured after ten days written notice to the Employer, (ii) a reduction by the
Employer in the base salary of Employee, (iii) a dissolution or liquidation of the Employer;
or (iv) failure to maintain Employee in a position commensurate with that referred to in
Section 2 of this Agreement and/or changing Employee’s title as set forth in “Employee
Specific Information” of this Agreement without Employee’s written consent which shall not
be unreasonably

 

 

withheld. In the event that the Employee terminates this Agreement for Good Reason,
Employee shall be entitled to receive the severance payments set forth in Section 4A.

     E. Resignation by the Employee. The Employee may resign at any time upon
thirty (30) days written notice. In the event of a resignation by the Employee, the
Employer shall only be obligated to pay Employee the amount of any unpaid Annual Base Salary
earned and accrued through the date of termination, together with any unreimbursed expenses.

     F. No Further Obligations. Upon the termination of Employee’s employment,
Employer shall have no further liability or obligation whatsoever to Employee or Employee’s
personal representative, estate, heirs, beneficiaries, or any other person claiming by,
under or through Employee, except as stated in such Sections.

     5. [Intentionally Omitted].

     6. Inventions. If any at time during the term of Employee’s employment, Employee
shall, either alone or with others, make, devise, create, invent or discover any inventions,
improvements, modifications, developments, ideas, products, property, formulas, know-how, designs,
models, processes, prototypes, sketches, drawings, plans or other matters whatsoever (whether or
not capable of being protected by letters of patent, registration, copyright, registered trademark,
service marks or other protection) which, in any manner, relate to, arise out of, or are in
connection with the present or future business prospects or activities of Employer relative to the
medical clinic business conducted by Employer including retail store walk-in clinics, corporate
relationships, and strategic alliances with health systems, providers and others (collectively
“Inventions”), all such Inventions shall immediately be and remain the sole and exclusive property
of Employer and Employee shall immediately and confidentially communicate a description of the
Invention to Employer and to no other party at any time, and if Employer so desires, Employee shall
execute all documents and instruments and do all things as may be requested by Employer in order to
forever vest all right, title and interest in such Invention solely in Employer and to obtain such
letters of patent, copyrights, registrations or other protections as Employer may, from time to
time, desire.

     7. Confidentiality. Employee acknowledges and agrees that at all times during and
following the termination of employment with Employer under any circumstances, Employee shall not
use or disclose (i) any information, knowledge or data relating in any way to the business,
financial condition, sales, public and private sources of financing, sales, customers, operations,
suppliers, products, services, Inventions, business relationships, manufacturing, technologies or
services of Employer, or (ii) any other proprietary or confidential information, knowledge, data or
details of the past, present or future business affairs or practices of Employer (items (i) and
(ii) are hereafter referred to as “Confidential Information”), except Employee may use any such
Confidential Information provided to Employee as necessary solely during the term of Employee’s
employment for the sole purpose of carrying out Employee’s duties hereunder for Employer’s benefit
provided Employee takes adequate measures to protect the confidentiality thereof. Employee
covenants and agrees that (i) the use and disclosure restrictions applicable to Confidential
Information shall also apply to all documents or other materials containing any

 

 

Confidential Information (“Confidential Materials”), (ii) all Confidential Materials are and
shall remain at all times the sole exclusive property of Employer and (iii) upon termination of
employment, Employee shall promptly return all Confidential Materials, and all copies and extracts
thereof, to Employer and at no time shall any Confidential Materials be used, copied, published,
circulated or disclosed, in any manner whatsoever, except as specifically authorized herein other
otherwise in writing by Employer. The term “Confidential Information” does not include information
which (i) is or becomes generally available to the public other than by breach of this provision,
(ii) the Employee learns from a third party who is not under an obligation of confidence to the
Employer or a client of the Employer, or (iii) that the Employer becomes legally obligated to
disclose.

     8. Covenant-Not-To-Compete. Employee covenants and agrees that during the term of
employment and for the two (2) year period following the resignation by Employee or termination of
employment for cause or the one (1) year period following a termination without cause, due to
disability, or for good reason (the “Restricted Period”), Employee shall not, within the greater of
any State or Territory of the United States or a 50 mile radius of any location of the Employer or
its affiliates at which Employee worked or for which Employee had managerial or other executive
responsibility while employed by Employer (collectively the “Restricted Area”), in any manner,
directly or indirectly, through intermediaries or other persons or entities, either as owner,
shareholder, director, officer, manager, member, agent, consultant, creditor, representative,
investor, partner, employee, or on behalf of any other person or entity, or in any other capacity
whatsoever (excepting Employee’s passive ownership of less than 5% of the securities of a publicly
traded entity) (i) engage in, assist, provide capital, services, advice or information to, or in
any manner whatsoever become associated with any business or enterprise that offers products or
services competitive with any business conducted by the Employer or its affiliates, (ii) contact
for any business purpose, solicit or attempt to solicit any supplier, customer, agent,
representative or employee of Employer or its affiliates, or otherwise interfere with or attempt in
any manner to disrupt any relationship or agreement between Employer or its affiliates and any of
its customers, employees, agents, representatives or others doing business with Employer or its
affiliates, or (iii) compete with Employer or its affiliates (“Restricted Activities”), provided
that during the Restricted Period, nothing herein shall prohibit Employee from engaging in any
aspect of pharmacy business including specialty, mail service, retail, benefits administration and
the like. Employee agrees that any Restricted Activities outside the Restricted Area with respect
to or directly or indirectly relating to any portion of the Restricted Area shall be deemed
conducted within the Restricted Area and prohibited hereby. As used herein, “affiliates” shall
include Employer’s affiliated agencies and direct or indirect subsidiaries or other business
ventures, and shall further include Arcadia Resources, Inc. (“Arcadia”), its subsidiaries and
affiliated agencies thereof, provided that the “business” of Arcadia, its subsidiaries and
affiliated agencies thereof shall be understood to mean the business of such entities as conducted
as of the date of this Agreement. It is further agreed that the “business” of Employer shall be
understood to mean and include Employer’s business relative to medical clinics in various settings
including retail store, corporate relationships, and strategic alliances with health systems and
other providers, and such other businesses as Employer establishes through the Term of employment.
Employee acknowledges and agrees that the legal consideration for Employee’s agreement to Sections
6, 7, 8 and 9 of this Agreement include Employee’s initial or continued employment hereunder, any
equity compensation which Employer agrees to award or cause to be awarded to Employee, and Employer’s agreement to

 

 

pay severance compensation in the circumstances described herein, and that Sections 6, 7, 8 and 9 of
this Agreement shall be enforceable by Employer’s successors and assigns.

     9. Enforceability. Employee expressly agrees and acknowledges that a loss arising
from a breach of any provision under Sections 6, 7, and 8 may not be reasonably and equitably
compensated by money damages. Therefore, Employee agrees that in a case of any such breach,
Employer shall be entitled to injunctive and/or other extraordinary relief in order to prevent
Employee from engaging in any of the foregoing prohibited activities, which relief shall be
cumulative and in addition to any and all other additional remedies to which Employer may be
entitled to at law or equity. In the event that any court of competent jurisdiction shall
determine that any part or all of the provisions of Sections 6, 7, and 8 are unenforceable or
invalid due to the scope of the activities restrained, the geographical extent of the restraints
imposed, the duration of the restraints imposed, or otherwise, the parties hereby expressly intend,
agree and stipulate that under such circumstances, the provisions of Sections 6, 7, and 8 shall be
enforceable to the fullest extent and scope permitted by law and that the parties shall be bound by
any judicial modifications to the provisions therein which said court of competent jurisdiction may
make in order to carry out the intentions of the parties as provided herein.

     10. Governing Law and Arbitration. This Agreement and all disputes arising out of
Employee’s employment shall be governed by and construed in accordance with the laws of the State
of Florida, notwithstanding the fact that either 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 Employee’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
and any claims for workers’ compensation benefits or compensation and any claims for unemployment
compensation benefits. There shall be a single, neutral arbitrator. The arbitration shall be held
at a location within Collier County, Florida, and Employer agrees to pay Employee’s reasonable
travel expenses incurred in connection therewith. The parties hereto agree that any arbitration
award rendered on any claim submitted to arbitration shall be final and binding upon the parties
and not subject to appeal and that judgment may be entered upon any arbitration award by any
circuit court located in Florida or by any other court of competent jurisdiction. The parties
hereto agree that the expenses of any arbitration (including the administrative charges of the
American Arbitration Association, as well as the fees and expenses paid to the arbitrator selected
to hear the case) shall be borne equally by the parties to the proceeding, provided that each party
shall bear its own attorneys fees and cost of its own experts, evidence and the like. Employee
acknowledges and agrees that by making this agreement to submit all claims to binding arbitration,
Employee hereby waives the right to litigate in a court of law, and to trial by jury if applicable,
all claims against Employer, including all claims assertable under any federal or state law
prohibiting discrimination in employment, except for any claims for workers’ compensation benefits
or compensation and any claims for unemployment compensation benefits. Notice of the demand for
arbitration relating to any dispute or claim related to or alleged to have arisen during the Term
of employment shall be given in writing to the other party to this Agreement no later than the
expiration of six (6) months following the expiration or termination of the Term, and as to all
other disputes or claims within six (6) months from the date the party asserting the claim should reasonably have been

 

 

aware of the same but in no event later than the period specified by the applicable statute of
limitations period. The failure to give such notice shall operate to then bar any action,
liability and damages arising from or related to such alleged dispute or claim, with the same force
and effect as if the applicable statute of limitations had expired.

     11. Waiver of Breach. The waiver of breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach. Each and every right, remedy and
power hereby granted to any party hereto or allowed it by law shall be cumulative and not exclusive
of any other.

     12. Severability. If any of the provisions of this Agreement or the application
thereof to any party under any circumstances is adjudicated to be invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provision of this Agreement or the
application thereof.

     13. Interpretation of Agreement. Where appropriate in this Agreement, words used in
the singular shall include the plural, and words used in the masculine shall include the feminine
and neuter. All headings that are used in this Agreement are for the convenience of the reader
only and shall not be used to limit or construe any of the provisions hereof.

     14. Survival of Provisions. The obligations of Employee under Sections 6, 7, 8 and 9
of this Agreement are continuing and shall survive the termination of Employee’s employment under
any circumstances whatsoever.

     15. Amendment of Agreement. The terms and provisions of this Agreement may be altered
or amended in any of their provisions only by the signed written agreement of the parties hereto.

     16. Successors. The Agreement shall inure to the benefit of Employer and its
successors and assigns, including but not limited to the provisions of Sections 6, 7, 8 and 9, but
may not be assigned or delegated by Employee as it requires Employee’s personal services.

     17. Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes any and all other previous or
contemporaneous communications, term sheets, representations, understandings, agreements,
negotiations and discussions, either oral or written, between the parties. The parties acknowledge
and agree that there are no prior or contemporaneous written or oral agreements, understandings, or
representations, directly or indirectly related to this Agreement that are not set forth herein.

     18. Counterpart/Facsimile Signatures. This Agreement may be executed in two or more
counterparts and by facsimile signature, each of which shall be deemed an original, and all of
which together shall constitute one and the same Agreement.

     19. Notices. All notices sent or required to be sent hereunder shall be sent by
facsimile, or by overnight courier or by registered or certified mail, postage prepaid, addressed
as follows:

 

 

	 	 	 	 	 
	 

	 	To Employer:
	 	Chairman of the Board
	 

	 	 	 	Care Clinic, Inc.
	 

	 	 	 	405 5th Avenue South, Suite 6
	 

	 	 	 	Naples, FL 34102
	 

	 	 	 	(239) 434-8884
	 

	 	 	 	Fax: (239) 434-5858
	 
	 	 	 	 
	 

	 	To Employee:
	 	At the address designated below

or to such address of which notice as aforesaid has previously been given, and shall be deemed to
have been given when so mailed.

	 	 	 	 	 
	Employee Specific Information

	Employee

	 	Harry Travis

	Effective Date of Agreement

	 	November 13, 2006

	Position

	 	Senior Vice President, Clinic Operations

	Annual Base Salary

	 	$200,000
	Employee Mailing Address

	 	2244 Dogwood Oaks Drive, Germantown, TN 38139

     The parties have executed this Agreement effective as of the Effective Date.

	 	 	 	 	 
	 	 	 
	 	 /s/ Harry J. Travis
 	 
	 	Employee Signature 	 
	 	 	 
	 

	 	 	 	 	 
	ACCEPTED BY EMPLOYER:

Care Clinic, Inc., a Delaware corporation

 	 	 
	By:  	/s/ John E. Elliott. II
 	 	 
	 	John E. Elliott, II 	 	 
	 	Its:  Chairman of the Board 	 	 
	 
	ARCADIA RESOURCES, INC.,

a Nevada corporation, which joins in the

execution of this Agreement solely for

purposes of Section 3(I) of this Agreement

 	 	 
	By:  	/s/ John E. Elliott, II
 	 	 
	 	Its: Chairman, CEO 	 	 
	 	 	 	 

 

 

	 	 	 	 	 

Addendum

Care Clinic, Inc. Management by Objectives (“MBO”) Goals

TO BE AGREED UPON BY EMPLOYER AND EMPLOYEE

Other

          All goals and objectives specified herein are subject to approval by Employer’s Board of
Directors. The assessment of achievement or non-achievement of each annual MBO Goal shall be
determined by Employer within 45 days of the end of each fiscal quarter or within such additional
time as Employer may reasonably require. All terms and conditions of this Addendum are subject to
all terms and conditions of Employee’s Employment Agreement and as the same may be amended from
time to time in writing mutually agreed to by Employer and Employee.

Accepted and Agreed:

	 	 	 	 	 
	/s/ Harry J. Travis

	 	/s/ John E. Elliott, II	 	 
	 

Employee

	 	 

For Care Clinic, Inc.

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