Document:

exv10w1

 

Exhibit
10.1

	 	 	 
	STATE OF TEXAS

	 	)
	SEVERANCE AGREEMENT

	COUNTY OF DALLAS

	 	)

THIS SEVERANCE AGREEMENT is entered into as of the 21st day of February, 2007 (the “Effective
Date”), by and between Natural Health Trends Corp. (referred to hereinafter as the “Company”), and
Stephanie S. Hayano (referred to hereinafter as “Hayano”).

W I T N E S S E T H:

WHEREAS, as of the Effective Date, Hayano is currently President, Chief Executive Officer and
Director of the Company; and

WHEREAS, the parties mutually desire to terminate the employment of Hayano upon the terms and
conditions contained herein; and

WHEREAS, the parties agree that a protracted dispute as to the separation of Hayano from the
Company would not be in the Company’s best interests and desire to compromise and settle their
dispute;

NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

	 	1.	 	Hayano has tendered, and the Board of Directors has accepted, her resignation as
President, Chief Executive Officer and Director of the Company, effective at 5:00 p.m.
Central Standard Time on February 21, 2007.
	 
	 	2.	 	The parties agree that the Non-Competition Agreement entered into by the parties on
or about the 31st day of July, 2006 (the “Non-Competition Agreement”), is hereby modified
so that the Company’s sole remedy for any violation of Section 5 of the Non-Competition
Agreement shall be termination of the Company’s obligation to continue paying any amount
that is otherwise required under this Agreement.
	 
	 	3.	 	The parties agree that the “Letter of Employment Terms” dated the 31st day
of July, 2006, signed by the parties and setting forth the terms of Hayano’s employment
(the “Letter”), shall be terminated and no longer be of any force and effect, it being the
specific intent of the parties that nothing under this Agreement shall be deemed a breach
by either party of the terms of the Letter.
	 
	 	4.	 	The Company will pay to Hayano all accrued but unpaid salary due Hayano by the
Company up through and including February 21, 2007, in accordance with its normal payroll
practice.

 

 

	 	5.	 	The Company will promptly reimburse Hayano for all travel and other expenses
previously paid by Hayano on behalf of the Company in accordance with the Company’s policy
on reimbursements.
	 
	 	6.	 	Upon the full execution of this Agreement, the Company will pay Hayano Twelve
Thousand Eight Hundred Sixty-Nine and 82/100 Dollars ($12,869.82), representing the
accrued but unpaid vacation pay due Hayano by the Company.
	 
	 	7.	 	As a severance payment, the Company will continue to pay Hayano her current salary
(net of applicable payroll taxes) (the “Severance Payment”) for twelve months following
the date of this Agreement (the “Severance Period”); provided, however, that (a) there
shall be deducted from the Severance Payment any compensation that Hayano is paid, earns,
or is promised for employment or other services provided during the Severance Period and,
provided further, that (b) no Severance Payment shall be due to Hayano from and after the
date that Hayano engages in a Competitive Activity, as defined in the Non-Competition
Agreement, or otherwise breaches the Non-Competition Agreement. Each acceptance by
Hayano of an installment of the Severance Payment shall constitute a representation and
warranty to the Company that, to the best of her knowledge, the amount accepted was due to
Hayano under the terms of this Agreement. Hayano will promptly comply with reasonable
requests of the Company for confirmation and verification that Hayano has not, during the
Severance Period, received, earned, or been promised compensation for services rendered
during the Severance Period or breached any provision of this Agreement or the
Non-Competition Agreement.
	 
	 	8.	 	For so long as the Company is required by this Agreement to continue paying the
Severance Payment to Hayano, the Company will maintain Hayano and any beneficiaries of
Hayano currently listed under such policies as a covered employee on its health
and dental insurance plans or, if the Company is legally or contractually precluded from
maintaining Hayano as a covered employee on its health and dental insurance plans, the
Company will pay the COBRA premiums for Hayano and any beneficiaries of Hayano currently
listed under such policies.
	 
	 	9.	 	As provided in the Letter, the Company will pay Hayano a bonus of $62,500 for 2006 as
follows: (a) $2,500 upon execution in full of this Agreement and (b) the balance
($60,000) immediately following the completion of the audit of the Company’s year end
audit of its financial statements for the year ended December 31, 2006.
	 
	 	10.	 	Hayano agrees that she will make no defamatory statements about the Company, its
subsidiaries, or their business, finances, prospects, shareholders, directors, officers,
agents, attorneys, consultants and past and present employees. The Company will make no
defamatory statements about Hayano. Nothing in this paragraph is intended to prevent any
party from testifying truthfully under oath if compelled to do so by a subpoena or order
issued by a court or administrative

- 2 -

 

	 	 	 	agency with competent jurisdiction, from speaking in confidence with their attorneys, or
complying with applicable securities or other laws.
	 
	 	11.	 	Hayano hereby agrees, on behalf of herself and all of her heirs or personal
representatives, to release the Company, its predecessors and successors, parent company,
all affiliates, and all of their present or former directors, officers, agents, partners,
employees, employee benefit programs, and the trustees, administrators, fiduciaries and
insurers of such programs (collectively hereafter “the Released Parties”), from any and
all claims for relief of any kind, whether now known or unknown, and concerning events
occurring at any time up to the Effective Date of this Agreement including, but not
limited to, those which in any way arise out of or relate to Hayano’s employment or the
termination of her employment with the Company, any and all claims of discrimination of
any kind, including, but not limited to claims of discrimination due to sex, age, race,
ethnicity, color, religion, national origin, disability, marital status, sexual
orientation, or political affiliation, and any contractual, tort or other common law
claims. This settlement and waiver includes all such claims, whether under any applicable
federal laws, including, but not limited to, the Age Discrimination in Employment Act, as
amended, Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of
1991, 42 U.S.C. § 1981, the Americans with Disabilities Act, the Fair Labor Standards Act,
the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the Employee
Retirement Income Security Act, the Family and Medical Leave Act, the Sarbanes-Oxley Act
of 2002, or under any other applicable federal, state or local laws or ordinances or any
other legal restrictions on the Company’s rights, including but not limited to the Texas
Commission on Human Rights Act. Hayano further agrees not to file a suit of any kind
against the Company or other Released Parties relating to her employment, or to
participate voluntarily in any employment-related claim brought by any other party against
the Company or other Released Parties. Hayano understands that this Agreement effectively
waives any right she might have to sue the Company and other Released Parties for any
claim arising out of her employment or the termination thereof. This paragraph shall not
be construed as releasing or affecting any claim Hayano may have under this Agreement or
for benefits vested under any ERISA or pension plan. Nothing in this Agreement is meant
to waive any right Hayano may have to elect COBRA continuation coverage. This Agreement
extends to all claims of every nature and kind, presently existing or resulting from or
attributable to any act or omission of any of the Released Parties, occurring prior to the
execution of the Agreement.
	 
	 	12.	 	Hayano agrees to reasonably cooperate with any investigation conducted by the
Company, its Audit Committee, or any independent investigator retained by the Company or
its Audit Committee into any alleged ethical or legal violation by the Company, its
subsidiaries, officers, directors, employees, agents, consultants, or distributors.
Reasonable cooperation includes, but is not limited to, making herself available at
reasonable times and places and on reasonable notice to be interviewed or to testify as to
such matters. Hayano acknowledges that she has

- 3 -

 

	 	 	 	fully disclosed to the Company’s Audit Committee and/or General Counsel any known or
suspected ethical or legal violation by the Company, its subsidiaries, officers, directors,
employees, agents, consultants, or distributors and the Company acknowledges that it will
appropriately investigate and respond to any such violations.
	 
	 	13.	 	The Company hereby agrees, on behalf of itself and its affiliates, subsidiaries,
agents, representatives, employees, shareholders, predecessors and successors, to release
Hayano from any and all claims for relief of any kind, and concerning events occurring at
any time up to the Effective Date, including, but not limited to, those which in any way
arise out of or relate to the performance of Hayano during her tenure with the Company,
her actions or inactions on the job, breach of fiduciary duty, and any contractual, tort
or other common claims (whether brought directly or derivatively), arising from or
relating to any facts or information currently known by any member of the Company’s board
of directors, executive management or general counsel. The Company understands that this
Agreement effectively waives any right it may have to sue Hayano for any claim arising out
of her service with the Company based on any facts or information currently known by any
member of the Company’s board of directors, executive management or general counsel. This
Agreement extends to all claims of every nature and kind, presently existing or resulting
from or attributable to any act or omission of Hayano, occurring prior to the execution of
this Agreement, arising from or relating to any facts or information currently known by
any member of the Company’s board of directors, executive management or general counsel.
	 
	 	14.	 	The Company agrees that it will not specifically exclude Hayano from any D&O
insurance it may carry in the future for former directors and officers of the Company.
	 
	 	15.	 	The parties to this Agreement understand and agree that this Agreement represents the
settlement of the termination of Hayano’s employment with the Company, and is not
intended, nor shall it be construed to be, and admission of liability on the part of
either party.
	 
	 	16.	 	The parties agree that it would be difficult to measure any damages caused to the
other party which might result from any breach of the promises set forth in this
Agreement, and that in any event money damages would be an inadequate remedy for any such
breach. Accordingly, if either party breaches, or proposes to breach, any portion of this
Agreement, the other party shall be entitled, in addition to all other remedies that it
may have, to an injunction or other appropriate equitable relief to restrain any such
breach without showing or proving any actual damage it.
	 
	 	17.	 	The parties agree to execute any further or additional documents and to take such
further action as may be reasonably necessary to fully and completely carry out the
intention of the parties hereto and the terms of this Agreement.

- 4 -

 

	 	18.	 	The Company agrees to provide Hayano with a letter of reference in the form of the
attached Exhibit “A”.
	 
	 	19.	 	The parties agree that the contents of this Agreement and the terms of the settlement
are confidential. Accordingly, both parties agree not to comment upon, discuss or
disclose to any person or entity any information concerning the terms, conditions and
provisions of this Agreement, or any other matter relating to the resignation of Hayano,
except to the extent required to comply with any law or court-ordered disclosure,
including without limitation applicable securities laws; provided, however, that each
party shall be allowed to discuss the matter with financial and legal advisors who agree
to be bound by this confidentiality provision to the greatest extent of the law. If asked
to discuss the reasons for the termination of Hayano’s employment from the Company, the
Company shall direct its officers, directors, employees, contractors, subcontractors,
agents, successors and/or assigns to respond only that “Ms. Hayano voluntarily resigned
from the Company for personal reasons;” except to the extent required to comply with any
law or court-ordered disclosure, including without limitation applicable securities laws.
	 
	 	20.	 	The parties acknowledge that each has carefully read and reviewed this Agreement, has
had the opportunity to review it with counsel, understands its contents, and is satisfied
with the terms and conditions of this Agreement.
	 
	 	21.	 	Texas law shall govern the interpretation of this Agreement without regard to any
choice of law or conflict of law provisions existing under Texas law or the laws of any
other state. This Agreement is intended to be effective as an instrument executed under
seal. Exclusive jurisdiction of any dispute arising from or related to this Agreement
shall lie in the state or federal court in Dallas County, Texas.
	 
	 	22.	 	In the event any provision of this Agreement shall be found to be void or invalid for
any reason, then such portion or provision shall be deemed severable from the remaining
provisions or portions of this Agreement, and shall not affect the validity of the
remaining provisions, which shall be given full effect as if the void or invalid provision
had not been included herein.
	 
	 	23.	 	The prevailing party in any proceeding to construe or enforce this Agreement, and any
party successfully asserting a release hereunder as a defense in any proceeding, shall
recover reasonable attorneys’ fees and the cost of enforcement.
	 
	 	24.	 	This Agreement may be executed in one or more counterparts, each of which shall
constitute an original, and all of which shall constitute a single memorandum.
	 
	 	25.	 	No modification or amendment of this Agreement shall be effective unless the same be
in a writing duly executed by all parties hereto.

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	 	26.	 	This Agreement supersedes all previous agreements, negotiations or understandings
between the parties, whether written or oral. This Agreement constitutes the entire
agreement between the parties, and no other promise, statement or representation not
expressed specifically herein has been made to or relied upon by either party.
	 
	 	27.	 	The representative of the Company executing this Agreement represents and warrants
that he is authorized to enter into this Agreement on behalf of the Company, and that this
Agreement shall be the legal, valid and binding obligation of the Company.

IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have willingly,
knowingly, and upon the advice and consent of counsel, executed this Agreement on the date and
year first written above.

	 	 	 	 	 	 	 	 	 
	COMPANY:	 	 	 	HAYANO:	 	 
	Natural Health Trends Corp.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Chris Sharng
	 	 	 	/s/ Stephanie S. Hayano
	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Stephanie S. Hayano	 	 
	Title: President	 	 	 	 	 	 

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EXHIBIT “A”

To Whom It May Concern:

Stephanie S. Hayano worked for Natural Health Trends Corp. from July 31, 2006, until February 19,
2007, as President, Chief Executive Officer and Director of the Company. During that time she 1)
participated in negotiations resulting in the settlement of lawsuits and potential lawsuits, 2)
launched two new products, and 3) initiated and implemented significant cost-saving plans. Ms.
Hayano voluntarily resigned from the Company for personal reasons.

	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:exv10w2

 

Exhibit 10.2

	 	 	 	 	 
	STATE OF TEXAS
	 	)	 	 
	 
	 	 	 	SEVERANCE AGREEMENT
	COUNTY OF DALLAS
	 	)	 	 

THIS
SEVERANCE AGREEMENT is entered into as of the
21st day of February, 2007, by and
between Natural Health Trends Corp. (referred to hereinafter as the “Company”), and Gernot Senke
(referred to hereinafter as “Senke”).

W I T N E S S E T H:

WHEREAS, the parties mutually desire to allow Senke to resign as the Chief Operating Officer of the
Company under the terms of this Agreement; and

NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

	 	1.	 	Senke has tendered, and the Company accepts, Senke’s resignation as Chief Operating
Officer of the Company, effective February 21, 2007.

	 
	 	2.	 	The parties agree that the Non-Competition Agreement entered into by the parties on
or about the 21st day of December, 2006 (the “Non-Competition Agreement”), is hereby
modified so that the Company’s sole remedy for any violation of Section 5 of the
Non-Competition Agreement shall be termination of the Company’s obligation to continue
paying any amount otherwise required under this Agreement.

	 
	 	3.	 	The parties agree that the “Letter of Employment Terms” dated the 21st day
of December, 2006, signed by the parties and setting forth the terms of Senke’s employment
(the “Letter”), shall be terminated and no longer be of any force and effect, it being the
specific intent of the parties that nothing under this Agreement shall be deemed a breach
by either party of the terms of the Letter.

	 
	 	4.	 	The Company will pay to Senke all accrued but unpaid salary due Senke by the Company
up through but not including February 21, 2007, in accordance with its normal payroll
practice.

	 
	 	5.	 	The Company will promptly reimburse Senke $14,736.99 in expenses incurred by Senke in
the process of relocating to Dallas, Texas.

 

 

	 	6.	 	The Company will make severance payments (the “Severance Payments”) to Senke on each
date that the Company’s payroll is normally paid in an amount based on an annualized gross
salary of $220,000. The Severance Payments will continue until the earlier of (a)
February 20, 2008, (b) the date the Senke accepts other employment, or (c) the date that
Senke breaches any provision of this Agreement or the Non-Competition Agreement (as
amended hereby) (the “Severance Period”). Any amount that Senke receives, earns, or is
promised for consulting work performed during the Severance Period will be deducted from
the Severance Payments otherwise due hereunder. Each acceptance by Senke of an
installment of the Severance Payment shall constitute a representation and warranty to the
Company that the amount accepted was due to Senke under the terms of this Agreement.
Senke will promptly comply with reasonable requests of the Company for confirmation and
verification that Senke has not, during the Severance Period, accepted other employment
received, earned, or been promised compensation for services rendered during the Severance
Period or breached any provision of this Agreement or the Non-Competition Agreement.

	 
	 	7.	 	For so long as the Company is required by this Agreement to continue paying the
Severance Payment to Senke, the Company will maintain Senke as a covered employee on its
health and dental insurance plans or, if the Company is legally or contractually precluded
from maintaining Senke as a covered employee on its health and dental insurance plans, the
Company will pay the COBRA premiums for Senke.

	 
	 	8.	 	Senke agrees that he will make no disparaging statements about the Company, its
subsidiaries, or their business, finances, prospects, shareholders, directors, officers,
agents, attorneys, consultants and past and present employees. The Company will make no
disparaging statements about Senke. Nothing in this paragraph is intended to prevent any
party from testifying truthfully under oath if compelled to do so by a subpoena or order
issued by a court or administrative agency with competent jurisdiction, from speaking in
confidence with their attorneys, or complying with applicable securities or other laws.

	 
	 	9.	 	Senke hereby agrees, on behalf of himself and all of his heirs or personal
representatives, to release the Company, its predecessors and successors, parent company,
all affiliates, and all of their present or former directors, officers, agents, partners,
employees, employee benefit programs, and the trustees, administrators, fiduciaries and
insurers of such programs (collectively hereafter “the Released Parties”), from any and
all claims for relief of any kind, whether now known or unknown, and concerning events
occurring at any time up to the date of this Agreement including, but not limited to,
those which in any way arise out of or relate to Senke’s employment or the termination of
his employment by resignation with the Company, any and all claims of discrimination of
any kind, including, but not limited to claims of discrimination due to sex, age, race,
ethnicity, color, religion, national origin, disability, marital status, sexual
orientation, or political affiliation, and any contractual, tort or other common law
claims. This settlement and waiver includes all such claims, whether under any

 

 

	 	 	 	applicable federal laws, including, but not limited to, the Age Discrimination in
Employment Act, as amended, Title VII of the Civil Rights Act of 1964, as amended, the
Civil Rights Act of 1991, 42 U.S.C. § 1981, the Americans with Disabilities Act, the Fair
Labor Standards Act, the Equal Pay Act, the Worker Adjustment and Retraining Notification
Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, the
Sarbanes-Oxley Act of 2002, or under any other applicable federal, state or local laws or
ordinances or any other legal restrictions on the Company’s rights, including but not
limited to the Texas Commission on Human Rights Act. Senke further agrees not to file a
suit of any kind against the Company or other Released Parties relating tohis employment,
or to participate voluntarily in any employment-related claim brought by any other party
against the Company or other Released Parties. Senke understands that this Agreement and
General Release effectively waives any right he might have to sue the Company and other
Released Parties for any claim arising out of his employment or the termination thereof.
This Agreement shall not be construed as releasing or affecting any claim Senke may have
for benefits vested under any ERISA or pension plan. Nothing in this Agreement is meant to
waive any right Senke may have to elect COBRA continuation coverage. This Release extends
to all claims of every nature and kind, presently existing or resulting from or
attributable to any act or omission of any of the Released Parties, occurring prior to the
execution of the Agreement.

	 
	 	10.	 	Senke agrees to fully cooperate with any investigation conducted by the Company, its
Audit Committee, or any independent investigator retained by the Company or its Audit
Committee into any alleged ethical or legal violation by the Company, its subsidiaries,
officers, directors, employees, agents, consultants, or distributors. Reasonable
cooperation includes, but is not limited to, making himself available at reasonable times
and places and on reasonable notice to be interviewed or to testify as to such matters.
Senke acknowledges that he has fully disclosed to the Company’s Audit Committee any known
or suspected ethical or legal violation by the Company, its subsidiaries, officers,
directors, employees, agents, consultants, or distributors.

	 
	 	11.	 	The parties to this Agreement understand and agree that this Agreement represents the
settlement of the termination of Senke’s employment by resignation with the Company, and
is not intended, nor shall it be construed to be, and admission of liability on the part
of either party.

	 
	 	12.	 	The parties agree that it would be difficult to measure any damages caused to the
other party which might result from any breach of the promises set forth in this
Agreement, and that in any event money damages would be an inadequate remedy for any such
breach. Accordingly, if either party breaches, or proposes to breach, any portion of this
Agreement, the other party shall be entitled, in addition to all other remedies that it
may have, to an injunction or other appropriate equitable relief to restrain any such
breach without showing or proving any actual damage it.

 

 

	 	13.	 	The parties agree to execute any further or additional documents and to take such
further action as may be reasonably necessary to fully and completely carry out the
intention of the parties hereto and the terms of this Agreement.

	 
	 	14.	 	The parties acknowledge that each has carefully read and reviewed this Agreement, has
had the opportunity to review it with counsel, understands its contents, and is satisfied
with the terms and conditions of this Agreement.

	 
	 	15.	 	Texas law shall govern the interpretation of this Severance Agreement without regard
to any choice of law or conflict of law provisions existing under Texas law or the laws of
any other state. This Agreement is intended to be effective as an instrument executed
under seal. Exclusive jurisdiction of any dispute arising from or related to this
Agreement shall lie in the state or federal court in Dallas County, Texas, that is
selected by the Company.

	 
	 	16.	 	In the event any provision of this agreement shall be found to be void or invalid for
any reason, then such portion or provision shall be deemed severable from the remaining
provisions or portions of this Agreement, and shall not affect the validity of the
remaining provisions, which shall be given full effect as if the void or invalid provision
had not been included herein.

	 
	 	17.	 	The prevailing party in any proceeding to construe or enforce this Agreement, and any
party successfully asserting a release hereunder as a defense in any proceeding, shall
recover reasonable attorneys’ fees and the cost of mediation.

	 
	 	18.	 	This Agreement may be executed in one or more counterparts, each of which shall
constitute an original, and all of which shall constitute a single memorandum.

	 
	 	19.	 	No modification or amendment of this Agreement shall be effective unless the same be
in a writing duly executed by all parties hereto.

	 
	 	20.	 	This Agreement supersedes all previous agreements, negotiations or understandings
between the parties, whether written or oral. This Agreement constitutes the entire
agreement between the parties, and no other promise, statement or representation not
expressed specifically herein has been made to or relied upon by either party.

	 
	 	21.	 	The representative of the Company executing this Agreement represents and warrants
that he is authorized to enter into this Agreement on behalf of the Company, and that this
Agreement shall be the legal, valid and binding obligation of the Company.

	 	 	IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have willingly,
knowingly, and upon the advice and consent of counsel, executed this Agreement on the date and
year first written above.

 

 

	 	 	 	 	 	 	 
	COMPANY:	 	SENKE:	 	 
	Natural Health Trends Corp.	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Chris Sharng
	 	/s/ Gernot Senke	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	Gernot Senke	 	 
	Title:

	 	President

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