Document:

solarpower8k123107ex10-1.htm

    
      

      

    

    
      Exhibit
        10.1

      

      EMPLOYMENT
        SEVERANCE AGREEMENT

      

      Solar
        Power, Inc. (the
        "Company") and Glenn E.
        Carnahan (the "Employee"), agree as follows, as of the 26 day of
        December, 2007:

      

      1.         Employment.  The
        Employee's employment as Chief Financial Officer for the Company and as an
        employee of the Company was terminated, effective the end of the workday,
        December 31, 2007 (“Termination Date”).  The Employee is required to
        complete the Company's exit interview within two (2) days after the Termination
        Date.  The Company and the Employee agree to mutually sever their
        employment relationship pursuant to the terms and conditions set forth in
        this
        Employment Severance Agreement ("Agreement").

      

      2.         Position;
        Scope of
        Employment.  The Employee shall cease functioning in the
        position of Chief Financial Officer for the Company and shall cease to be
        an
        employee for the Company in any capacity, effective on the Termination
        Date.  Employee further resigns as a Director of the Company as of the
        Termination Date.

      

      3.         Severance
        Payments.  The Company shall make severance payments to the
        Employee as set forth in this Section 3 for the period January 1, 2008 through
        March 31, 2008 (the "Severance Period").  The aggregate value of the
        severance payments per month shall be $12,500 (Twelve Thousand Five Hundred
        Dollars) (“Monthly Severance Payment’).  All severance payments of
        every description shall be subject to the customary withholding tax and other
        employment taxes as required with respect to compensation paid to the
        Employee.

      

      3.1.      Cash
        Payments.  During the Severance Period, the Company shall pay
        the Employee the Monthly Severance Payment as set forth in Section 3 in equal
        semi-monthly installments at the Company’s regular scheduled payroll
        intervals.

      

      3.2.      Medical
        and Health
        Benefits.  The Employee will also be offered the opportunity
        for continued coverage under the Company’s health insurance plans, as required
        by COBRA.  The Company's insurance agent will send the Employee
        information regarding this coverage.

      

      3.3       Stock
        Option
        Grants.  Will terminate in accordance with provisions of the
        Solar Power, Inc. 2006 Equity Incentive Plan.

      

      4.         Release
        of
        Liability.  The Employee acknowledges that he or she enters
        this Agreement freely and voluntarily, and agrees as follows:

      

      4.1.      Age
        Discrimination in Employment Act
        of 1967.  The Employee represents that he or she understands
        and acknowledges that the Age Discrimination in Employment Act of 1967, as
        amended, provides him or her the right to bring a claim against the Company
        if
        the Employee believes that he or she has been discriminated against on the
        basis
        of age.  The Employee expressly warrants that he or she will not file
        any claim or action against the Company or any entity or employee associated
        with or employed by the Company based on any alleged violations of the Age
        Discrimination in Employment Act of 1967, as amended, arising prior to the
        date
        of this Agreement.  The Employee hereby waives any right to assert a
        claim for relief under the Age Discrimination in Employment Act of 1967,
        as
        amended, including but not limited to, back pay, attorneys' fees, damages,
        reinstatement or injunctive relief.

      

      
        
           

        

        
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      4.2.      OlderWorker’s
        Benefit
        Protection.  Pursuant to the terms of the Older Workers'
        Benefit Protection Act (OWBPA), the Employee acknowledges that he or she
        has
        twenty-one (21) days from the date of presentation of this Agreement to him
        or
        her, which occurred on December 26, 2007, in which to consult with an attorney
        regarding the terms and conditions of this Agreement.  The Employee
        acknowledges that, by the terms of this Agreement, the Employee has been
        advised
        in writing that during the aforementioned twenty-one (21) day period, the
        Employee should consult with an attorney regarding the terms and conditions
        of
        this Agreement.  The Employee further acknowledges that, by the terms
        of this Agreement, he or she has been advised that following execution of
        this
        Agreement, he or she has seven (7) days in which he or she may revoke this
        Agreement

      

      4.3.      Title
        VII
        Claims.  The Employee acknowledges that Title VII of the Civil
        Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Americans
        With
        Disabilities Act, the Age Discrimination in Employment Act of 1967, the Vietnam
        Era Veterans Readjustments Assistance Act of 1974, the Federal Family and
        Medical Leave Act of 1993, the California Family Rights Act of 1991 and the
        California Fair Employment and Housing Act, as amended, provide the right
        to an
        employee to bring charges, claims or complaints against an employer if the
        employee believes he or she has been discriminated against on a number of
        bases,
        including race, ancestry, color, religion, sex, marital status, national
        origin,
        age, status as a veteran of the Vietnam era, request or need for family or
        medical leave, physical or mental disability, medical condition or sexual
        preference, or retaliation by Employer for making any such
        claims.  The Employee, with full understanding of the rights afforded
        him or her under these federal and state laws, agrees that he or she will
        not
        file, or cause to be filed against the Company, any charges, complaints,
        or
        actions based on any alleged violation of these federal and state laws, or
        any
        successor or replacement federal or state laws.  The Employee hereby
        waives any right to assert a claim for relief available under these federal
        and
        state laws including, but not limited to, back pay, attorneys' fees, damages,
        reinstatement, or injunctive relief, which the Employee may otherwise recover
        based on any alleged violation of these federal and state laws, or any successor
        or replacement federal or state laws.

      

      4.4.      General
        Release.  The Employee hereby agrees that all of his or her or
        her rights under section 1542 of the Civil Code of the State of California
        are
        hereby waived.  Section 1542 provides as follows:

      

      "A
        general release does not extend to claims which the creditor does not know
        or
        suspect to exist in his favor at the time of executing the release, which
        if
        known by him must have materially affected his or her or her settlement with
        the
        debtor."

      

      
        
           

        

        
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      Notwithstanding
        the provisions of section 1542, the Employee hereby irrevocably and
        unconditionally releases and forever discharges the Company and all of its
        officers, agents, directors, supervisors, employees, representatives and
        their
        successors and assigns and all persons acting by, through, under or in concert
        with any of them from any and all charges, complaints, grievances, claims,
        actions, and liabilities of any kind (including attorneys' fees, interest,
        expenses and costs actually incurred) of any nature whatsoever, known or
        unknown, suspected or unsuspected (hereinafter referred to as "Claims"),
        which
        the Employee has or may have in the future, arising out of the Employee's
        employment with the Company.  All such Claims are forever barred by
        this Agreement and without regard to whether these Claims are based on any
        alleged breach of duty arising in contract or tort, any alleged employment
        discrimination or other unlawful discriminatory act, or any claim or cause
        of
        action regardless of the forum in which it may be brought, including without
        limitation, claims under the National Labor Relations Act, Title VII of the
        Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age
        Discrimination in Employment Act of 1964, as amended, the Americans With
        Disability Act, the California Family Rights Act of 1991, the Federal Family
        and
        Medical Leave Act of 1993, the Vietnam Era Veterans Readjustment Assistance
        Act
        of 1974, the California Fair Employment and Housing Act, California Labor
        Code
        section 132a, any allegation of wrongful termination and any claim arising
        out
        of Article 1, section 8 of the Constitution of the State of California.

      

      5.         Vacation
        and Sick
        Leave.  Vacation and sick leave ceased accruing on the
        Termination Date.  The Employee acknowledges that he or she has been
        paid for all accrued, but unused vacation pay or does not have any vacation
        pay
        owed to him or her.

      

      6.         Business
        Expenses.  The Employee has been reimbursed for all business
        expenses, in accordance with the Company's reimbursement policy.

      

      7.         Confidential
        Information.  The Employee acknowledges that during the course
        of his or her duties with the Company, he or she handled confidential
        information of the Company and its affiliates.  The Employee agrees he
        or she will retain in the strictest confidence all confidential matters which
        relate to the Company or its affiliates, including, without limitation, pricing
        lists, business plans, financial projections and reports, business strategies,
        internal operating procedures and other confidential business information
        from
        which the Company derives an economic or competitive advantage or from which
        the
        Company might derive such advantage in its business, whether or not labeled
        "secret" or "confidential," and not to disclose directly or indirectly or
        use by
        him or her in any way, either during the term of this Agreement or at any
        time
        thereafter except as permitted by law.

      

      8.         Trade
        Secrets.  The
        Employee shall not disclose to any others or take or use for the Employee's
        own
        purposes or purposes of any others at any time, any of the Company's trade
        secrets, including without limitation, confidential information; customer
        lists;
        information concerning current or any future and proposed work, services
        or
        products; the fact that any such work, services or products are planned,
        under
        consideration, or in production, as well as any description thereof, computer
        programs or computer software.  The Employee agrees that these
        restrictions shall also apply to (i) trade secrets belonging to third parties
        in
        the Company's possession and (ii) trade secrets conceived, originated,
        discovered or developed by the Employee during the term of his or her
        employment.

      

      
        
           

        

        
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      9.         Inventions;
        Ownership
        Rights.  The Employee agrees that all ideas, techniques,
        inventions, systems, formulas, discoveries, technical information, programs,
        prototypes and similar developments ("Developments") developed, created,
        discovered, made, written or obtained by him or her in the course of or as
        a
        result, directly or indirectly, of performance of his or her duties to the
        Company, and all related industrial property, copyrights, patent rights,
        trade
        secrets and other forms of protection thereof, shall be and remain the property
        of the Company.  The Employee agrees to execute or cause to be
        executed such assignments and applications, registrations and other documents
        and to take such other action as may be requested by the Company to enable
        the
        Company to protect its rights to any such Developments.

      

      10.       No
        Disparagement of the
        Company.  The Employee
        agrees that he
        or she will not make any statements, which may appear derogatory about or
        disparaging to the Company or any of its agents, officers, directors or other
        employees, except as may be required by court order.

      

      11.       Non-Interference;
        No
        Solicitation.  The Employee agrees not to interfere with any of
        the Company's contractual obligations with others.  Furthermore, the
        Employee agrees during a period of two years after the date of this Agreement,
        the Employee agrees to not, without the Company's express written consent,
        on
        his or her behalf or on behalf of another: (i) contact or solicit the business
        of any client, customer, creditor or licensee of the Company, (ii) hire
        employees of the Company, other than clerical employees, (iii) solicit the
        business of any client, customer or licensee of the Company.  The
        Employee acknowledges that this section 11 is a reasonable and necessary
        measure
        deigned to protect the proprietary information of the Company.

      

      12.       Return
        Company
        Property.  The Employee agrees that he or she will promptly,
        within two (2) business days, return to the Company, all the Company's or
        its
        affiliates' memoranda, notes, records, reports, manuals, drawings, designs,
        computer files in any media and other documents (including extracts and copies
        thereof) relating to the Company or its affiliates, and all other property
        of
        the Company.

      

      13.       Actions
        Contrary to
        Law.  Nothing contained in this Agreement shall be construed to
        require the commission of any act contrary to law, and whenever there is
        any
        conflict between any provision of this Agreement and any statute, law,
        ordinance, or regulation, contrary to which the parties have no legal right
        to
        contract, then the latter shall prevail; but in such event, the provisions
        of
        this Agreement so affected shall be curtailed and limited only to the extent
        necessary to bring it within legal requirements.

      

      
        	
                14.

              	
                Miscellaneous.
                  

              

      

      

      14.1.    Notices.  All
        notices to be given by either party to the other shall be in writing and
        may be
        transmitted by personal delivery, facsimile transmission, overnight courier
        or
        mail, registered or certified, postage prepaid with return receipt requested;
        provided, however,
        that notices
        of change of address or facsimile number shall be effective only upon actual
        receipt by the other party.  Notices shall be delivered at the
        following addresses, unless changed as provided for herein:

      

      
        
           

        

        
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                To
                  the Employee:

              	
                Glenn
                  E.
                  Carnahan                   
                  

              

      

      105
        Terrace
        Street                   

      Auburn,
        CA  95603                
 

      

      
        	
                 

              	
                To
                  the Company:

              	
                Alan
                  M. Lefko, Vice President 

              

      

      Solar
        Power, Inc.

      1115
        Orlando Avenue

      Roseville,
        CA  95661-5247

      

      14.2.    Entire
        Agreement.  This Agreement supersedes any and all agreements,
        either oral or written, between the parties hereto with respect to its subject
        matter.  Each party to this Agreement acknowledges that no
        representation, inducements, promises, or agreements, orally or otherwise,
        have
        been made by any party or anyone acting on behalf of any party, which are
        not
        embodied herein, and that no other agreement, statement, or promise not
        contained in this Agreement shall be valid or binding.  Any
        modification of this Agreement will be effective only if it is in writing
        and
        signed by both parties.

      

      14.3.    Governing
        Law.  This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of California.

      

      14.4.    Jurisdiction
        and
        Venue.  The parties hereby consent to the exclusive
        jurisdiction of the state and federal courts sitting in California in the
        venue
        of Sacramento County in any action on a claim arising out of, under or in
        connection with this Agreement or the transactions contemplated by this
        Agreement, provided such claim is not required to be arbitrated pursuant
        to
        Section 14.5.  The parties further agree that personal jurisdiction
        over them may be effected by notice as provided in Section 14.1, and that
        when
        so made shall be as if served upon them personally within the State of
        California.

      

      14.5     Arbitration.  Any
        controversy, dispute or claim arising out of or relating to this Agreement,
        performance hereunder or breach thereof, which cannot be amicably settled,
        shall
        be settled by arbitration conducted in Santa Clara County or such other mutually
        agreed upon location.  Said arbitration shall be conducted in
        accordance with the Commercial Arbitration Rules of the American Arbitration
        Association at a time and place within the above-referenced location as selected
        by the arbitrator(s).

      

      a.         Initiation
        of
        Arbitration.  After seven (7) days prior written notice to the
        other, either party hereto may formally initiate arbitration under this
        Agreement by filing a written request therefore, and paying the appropriate
        filing fees, if any.

      

      b.         Hearing
        and Determination
        Dates.  The hearing before the arbitrator shall occur within
        thirty (30) days from the date the matter is submitted to
        arbitration.  Further, a determination by the arbitrator shall be made
        within forty-five (45) days from the date the matter is submitted to
        arbitration.  Thereafter, the arbitrator shall have fifteen (15) days
        to provide the parties with his or her decision in writing.  However,
        any failure to meet the deadlines in this paragraph will not affect the validity
        of any decision or award.

      

      
        
           

        

        
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      c.          Binding
        Nature of
        Decision.  The decision of the arbitrator shall be binding on
        the parties.  Judgment thereon shall be entered in a court of
        competent jurisdiction.

      

      d.         Injunctive
        Actions.  Nothing herein contained shall bar the right of
        either party to seek to obtain injunctive relief or other provisional remedies
        against threatened or actual conduct that will cause loss or damages under
        the
        usual equity rules including the applicable rules for obtaining preliminary
        injunctions and other provisional remedies.

      

      e.         Fees
        and Costs.  The
        cost of arbitration, including the fees of the arbitrator, shall initially
        be
        borne by the Company; provided, the prevailing party (as determined by the
        arbitrator) shall be entitled to recover all such costs allowed by law, in
        addition to attorneys’ fees and other costs, in accordance with Section 14.6 of
        this Agreement.

      

      14.6.     Attorneys'
        Fees.  In the event
        of any
        litigation, arbitration, or other proceeding arising out of this Agreement,
        or
        the parties’ performance as outlined herein, the prevailing party shall be
        entitled to an award of costs, including an award of reasonable attorneys’
fees.  Any judgment, order, or award entered in any such proceeding
        shall designate a specific sum as such an award of attorneys’ fees and costs
        incurred.  This attorneys’ fee provision is intended to be severable
        from the other provisions of this Agreement, shall survive any judgment or
        order
        entered in any proceeding and shall not be deemed merged into any such judgment
        or order, so that such further fees and costs as may be incurred in the
        enforcement of an award or judgment or in defending it on appeal shall likewise
        be recoverable by further order of a court or panel or in a separate action
        as
        may be appropriate.

      

      14.7.    Amendment,
        Waiver.  No amendment or variation of the terms of this
        Agreement shall be valid unless made in writing and signed by the Employee
        and
        the Company.  A waiver of any term or condition of this Agreement
        shall not be construed as a general waiver by the Company.  Failure of
        either the Employee or the Company to enforce any provision or provisions
        of
        this Agreement shall not waive any enforcement of any continuing breach of
        the
        same provision or provisions or any breach of any provision or provisions
        of
        this Agreement.

      

      14.8.    Ambiguities.  This
        Agreement shall not be subject to the rule that any ambiguities in the contract
        are to be interpreted against the drafter of the Agreement.

      

      14.9.    Counterparts. 
        This Agreement may be
        signed in one or more counterparts (by facsimile or otherwise), all of which
        shall be treated as one and the same instrument.

      

      

      

      

      

      
        
           

        

        
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      IN
        WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
        first hereinabove written.

      

      
        	 	
                THE
                  EMPLOYEE

              
	 	 
	 	 
	 	 
	
                Date:  _____

              	
                __________________________________

              
	 	
                Name:  Glenn
                  E
                  Carnahan

              
	 	 
	 	 
	 	 
	 	 
	 	
                THE
                  COMPANY

              
	 	 
	 	
                SOLAR
                  POWER, INC.

              
	 	 
	 	 
	 	 
	
                Date:  _____

              	
                By:  ______________________________

              
	 	 

      

      

      

      

      

      

      

      

      

      

       

       

      
 

      

      

      

      

      

      

      

7Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”),
is made on this 21st day of December 2007, by and
between Nature’s Sunshine Products, Inc., a Utah Corporation, having its
principal place of business in Provo, Utah (“the Company” or “NSP”) and Stephen M. Bunker (“Executive”).

 

The Company desires to engage Executive to provide services for NSP and
Executive desires to provide such services on the terms and conditions below.

 

1.             Employment.

 

1.1           Positions and Duties. Executive
will serve as the CFO & Executive
Vice President of Finance of the Company, reporting directly to the
Chief Executive Officer (“CEO”) of the Company. 
In addition, without additional compensation, if requested by the
Company, Executive will serve in other officer positions of the Company and its
subsidiaries. Executive shall devote his best efforts and substantially all of
his business time and services to the Company to perform such duties as may be
customarily incident to such position of an enterprise of the size and nature
of the Company and as may reasonably be assigned from time to time by the CEO
of the Company or the Company, as the case may be.  Executive will render his services hereunder
to the Company, shall use his best efforts, judgment and energy in the
performance of the duties assigned to him, and shall abide by the Company’s
Code of Conduct and any other applicable Company policies, and shall comply
with any and all applicable laws, including but not limited to insider
trading/reporting requirements and the policies and procedures as may be set
forth in the employee handbook, manuals and other materials provided by the
Company.

 

1.2           Place of Performance.
Executive shall perform his services hereunder at the Company’s executive
offices in Provo, Utah; provided, however, that
Executive will be required to travel from time to time as reasonably required
for business purposes.

 

2.             Compensation and
Benefits.

 

2.1           Base Salary. Executive shall
receive an annual salary of $200,360.00
paid in accordance with the Company’s payroll practices, as in effect from time
to time. Base salary shall be subject to review on at least an annual basis by
the CEO. Executive understands that no further compensation will be given for
his/her name being used as on officer or shareholder on any corporation,
subsidiary or branch.

 

2.2           Discretionary Bonus.  Executive shall also
be eligible to participate in the executive bonus program or any successor
program (the “EBP”).  Payment of any
bonus under the EBP is in NSP’s sole discretion and such payments will be made
in accordance with section 409A.

 

1

 

2.3           Employee Benefits.  Executive will be eligible to participate in
retirement/savings, health insurance, term life insurance, long term disability
insurance and other employee benefit plans, policies or arrangements maintained
by the Company for its employees generally and, at the discretion of the Board,
in incentive plans, stock option plans and change in control severance plans
maintained by the Company for its executives, if any, subject to the terms and
conditions of such plans, policies or arrangements, including but not limited
to those benefits outlined in the Employee Handbook.

 

2.4           Stock Options.  The Company may
from time to time grant to Executive options (the “Options”) to purchase shares
of NSP common stock pursuant to the price, terms and conditions set forth in
the then applicable Stock Option Plan, as amended from time to time, or as
otherwise set forth in a Stock Option Agreement.

 

3.             Indemnification;
D&O Insurance. The Company will indemnify Executive for and hold
Executive harmless from and against any and all losses, costs, damages or
expenses (including attorneys’ fees) arising out of any claim or legal proceeding
brought against Executive, relating in any way to services performed by
Executive for the Company.  This
indemnification provision is intended to be broadly interpreted and to provide
for indemnification to the full extent permitted by law.  The Company will maintain directors’ and
officers’ liability insurance in amounts and on terms reasonable and customary
for similarly situated companies.

 

4.             Expenses.  In accordance with the Company’s normal
policies for expense reimbursement, the Company shall reimburse Executive for
all reasonable travel, entertainment and other expenses incurred or paid by
Executive in connection with, or related to, the performance of Executive’s
duties, responsibilities or services under this Agreement, upon presentation of
documentation, including expense statements, vouchers and/or such other
supporting information as the Company may request.

 

5.             Termination.  Upon cessation of his employment with the
Company, Executive will be entitled only to such compensation and benefits as
described in this Section 5.

 

5.1           Termination
without Cause.  If Executive’s
employment by the Company is terminated by the Company without Cause (as
defined below), Executive will be entitled to:

 

5.1.1.       payment of all accrued and unpaid base
salary through the date of such termination;

 

5.1.2.       monthly severance payments equal to
one-twelfth of Executive’s base salary as of the date of such termination for a
period equal to twelve (12) months (the “Severance Period”).

 

5.1.3.   payment of the cost for continuation of
Executive’s health insurance coverage under COBRA (and for his or her family
members if Executive provided for their coverage during his or her employment)
during the Severance Period and in accord with the NSP plan applicable to NSP
employees currently in effect.

 

2

 

5.2           Release.  Notwithstanding any provision of this
Agreement, the payments and benefits described above are conditioned on
Executive’s execution and delivery to the Company of a release substantially
identical to that attached hereto as Exhibit A in a manner consistent with
the requirements of the Older Workers Benefit Protection Act, if applicable,
and any applicable state law (the “Release”). 
The severance benefits described in Section 5.1.2 will be paid
after the Release becomes irrevocable.

 

5.3           Termination for Cause.  If Executive’s employment with the Company is
terminated by the Company for Cause then the Company’s obligation to Executive
will be limited solely to the payment of accrued and unpaid base salary through
the date of such termination.  To
terminate Executive’s employment for Cause, the CEO, in consultation with the
Board of Directors, must determine in good faith that Cause has occurred.

 

5.3.1.       “Cause” means:

 

a)                                      continuing
performance by Executive deemed unsatisfactory to NSP acting reasonably and in
good faith or conduct by Executive deemed unacceptable by NSP acting reasonably
and in good faith;

 

b)                                     conviction of,
or the entry of a plea of guilty or no contest to, a felony or any crime that
may materially adversely affect the business, standing or reputation of the
Company;

 

c)                                      dishonesty,
fraud, embezzlement or other misappropriation of funds;

 

d)                                     material breach
of this Agreement;

 

e)                                      willful refusal
to perform the lawful and reasonable directives of the CEO or the Board.

 

5.4           Resignation by Executive.
Executive may resign his/her employment by giving the Company four weeks’
notice of said resignation; NSP may elect to pay Employee’s base salary in lieu
of notice.  If Executive resigns, then
the Company’s obligation to Executive will be limited solely to the payment of
accrued and unpaid base salary through the date of such termination.

 

5.5           Termination
upon Death or Incapacity of Executive. Executive’s employment with the
Company shall terminate upon the death or incapacity of Executive.  In the event of termination of Executive’s
employment by reason of Executive’s death or incapacity, the provisions
governing termination without cause, above, shall apply. “Incapacity” shall
mean that Executive is, for a period of 90 days or more, unable to perform
Executive’s duties effectively, for reasons such as emotional, mental or
physical illness, deficiency, or disability.

 

5.6.          Foreign Entities. Without regard to the circumstances of Executive’s
termination from employment, Executive hereby also covenants that upon
termination, if she/he is listed as an officer, director, partner, secretary or
shareholder on any corporation, subsidiary or branch on behalf of Nature’s Sunshine
Products, Inc. or any related entity, he/she will sign over 

 

3

 

any and all rights
to stock and/or resign as an officer or director prior to departure from the
Company as required by the law applicable to the entity or by that entity’s
procedural requirements.

 

6.             Restrictive Covenants.  In recognition of the compensation and other
benefits provided to Executive pursuant to this Agreement, Executive agrees to
be bound by the provisions of this Section (the “Restrictive Covenants”).
These Restrictive Covenants will apply without regard to whether any
termination or cessation of Executive’s employment is initiated by the Company
or Executive, and without regard to the reason for that termination or cessation.

 

6.1           Covenant Not To
Compete.  Executive covenants that,
during his employment by the Company and for a period of twelve (12) months
following immediately thereafter, (the “Restricted
Period”), Executive will not do any of the following, directly or indirectly:

 

6.1.1.       engage, be employed
by, participate in, plan for or organize any Competing Business of the Company
or any subsidiary or joint venture of the Company; “Competing Business” means
any business enterprise that distributes through a multilevel marketing program
or that engages in any activity that competes anywhere in the world with any
activity in which the Company is then engaged, including sales or distribution
of  herbs, vitamins or nutritional supplements
or any product, which the Company sells or distributes at the time of Executive’s
termination;

 

6.1.2.       become interested in
(as owner, stockholder, lender, partner, co-venturer, director, officer,
employee, agent or consultant) any person, firm, corporation, association or
other entity engaged in a Competing Business. Notwithstanding the foregoing,
Executive may hold up to 2% of the outstanding securities of any class of any
publicly-traded securities of any company;

 

6.1.3.       influence or attempt
to influence any employee, sales leader, manager, coordinator, consultant,
supplier, licensor, licensee, contractor, agent, strategic partner,
distributor, customer or other person to terminate his or her employment with
the Company or modify any written or oral agreement, relationship, arrangement
or course of dealing the Company; or

 

6.1.4.       solicit for
employment or employ or retain (or arrange to have any other person or entity
employ or retain) any person who has been employed or retained by any member of
the Company within the preceding twelve (12) months. For this purpose,
advertisements for employment placed in newspapers of general circulation will
not be considered solicitation.

 

6.1.5        Extension of
Restrictive Covenants.  The Company
may elect to extend the twelve (12) month post-termination non-compete and
non-solicitation period by up to twelve (12) additional months by delivering
written notice of such extension to Executive at least thirty (30) days prior
to the end of that twelve (12) month period and by making monthly payments to
Executive for the number of months equal to the length of the extension
specified by the Company in its notice to the Executive.  The amount of each such additional monthly 

 

4

 

payment will be equal to one-twelfth of the base salary in effect at
the time of Executive’s termination of employment.

 

6.2           Confidentiality.  Executive recognizes and acknowledges that
the Proprietary Information (as defined below) is a valuable, special and
unique asset of the business of the Company. 
As a result, both during the Term and thereafter, Executive will not,
without the prior written consent of the Company, for any reason divulge to any
third-party or use for his/her own benefit, or for any purpose other than the
exclusive benefit of the Company, any Proprietary Information.  Notwithstanding the foregoing, if Executive
is compelled to disclose Proprietary Information by court order or other legal
process, to the extent permitted by applicable law, he shall promptly so notify
the Company so that it may seek a protective order or other assurance that
confidential treatment of such Proprietary Information shall be afforded, and
Executive shall reasonably cooperate with the Company in connection therewith.  If Executive is so obligated by court order
or other legal process to disclose Proprietary Information, Executive will
disclose only the minimum amount of such Proprietary Information as is
necessary for Executive to comply with such court order or other legal process.

 

6.3           Property of the
Company.

 

6.3.1.       Proprietary
Information.  All right, title and
interest in and to Proprietary Information will be and remain the sole and
exclusive property of the Company. 
Executive will not remove from the Company’s offices or premises any
documents, records, notebooks, files, correspondence, reports, memoranda or
similar materials of or containing Proprietary Information, or other materials
or property of any kind belonging to the Company unless necessary or
appropriate in the performance of his duties to the Company.  If Executive removes such materials or
property in the performance of his duties, he will return such materials or
property promptly after the removal has served its purpose.  Executive will not make, retain, remove
and/or distribute any copies of any such materials or property, or divulge to
any third person the nature of and/or contents of such materials or property,
except to the extent necessary to perform his/her duties on behalf of the
Company.  Upon termination of Executive’s
employment with the Company, s/he will leave with the Company or promptly
return to the Company all originals and copies of such materials or property
then in his/her possession.

 

6.3.1.1.  “Proprietary Information”  means any and all
proprietary information developed or acquired by the Company that has not been
specifically authorized to be disclosed. 
Such Proprietary Information shall include, but shall not be limited to,
the following items and information relating to the following items: (a) all
trade secrets (including research and development, know-how, formulas,
compositions, manufacturing and production processes and techniques,
methodologies, technical data, designs, drawings and specifications) as well as
all inventions (whether patentable or unpatentable and whether or not reduced
to practice) and all improvements thereto, (b) computer codes and
instructions, processing systems and techniques, inputs, and outputs
(regardless of the media on which stored or located) and hardware and software
configurations, designs, architecture and interfaces, (c) business
research, studies, procedures and costs, (d) financial data, (e) distributor
network information, the identities of actual and prospective distributors and
distribution methods, (f) marketing data, methods, plans and efforts, (g) the
identities of actual and prospective suppliers, (h) the terms of contracts
and agreements with, the needs and requirements of and the Company’s course of 

 

5

 

dealing with, actual or prospective suppliers, (i) personnel
information, (j) customer and vendor credit information, and (k) information
received from third parties subject to obligations of nondisclosure or
non-use.  Failure by the Company to mark
any of the Proprietary Information as confidential or proprietary shall not
affect its status as Proprietary Information.

 

6.3.2.       Intellectual
Property.  Executive agrees that all
the Intellectual Property (as defined below) will be considered “works made for
hire” as that term is defined in Section 101 of the Copyright Act (17
U.S.C. §  101) and that all right, title and interest in such Intellectual
Property will be the sole and exclusive property of the Company.  To the extent that any of the Intellectual
Property may not by law be considered a work made for hire, or to the extent
that, notwithstanding the foregoing, Executive retains any interest in the
Intellectual Property, Executive hereby irrevocably assigns and transfers to
the Company any and all right, title, or interest that Executive may now or in
the future have in the Intellectual Property under patent, copyright, trade
secret, trademark or other law, in perpetuity or for the longest period
otherwise permitted by law, without the necessity of further consideration.  The Company will be entitled to obtain and
hold in its own name all copyrights, patents, trade secrets, trademarks and
other similar registrations with respect to such Intellectual Property.  Executive further agrees to execute any and
all documents and provide any further cooperation or assistance reasonably
required by the Company to perfect, maintain or otherwise protect its rights in
the Intellectual Property, at no cost to Executive.  If the Company is unable after reasonable
efforts to secure Executive’s signature, cooperation or assistance in
accordance with the preceding sentence, whether because of Executive’s
incapacity or any other reason whatsoever, Executive hereby designates and
appoints the Company or its designee as Executive’s agent and attorney-in-fact
to act on his behalf solely for the purpose of executing and filing documents
and doing all other lawfully permitted acts necessary or desirable to perfect,
maintain or otherwise protect the Company’s rights in the Intellectual
Property. Executive acknowledges and agrees that such appointment is coupled
with an interest and is therefore irrevocable.

 

6.3.2.1.  “Intellectual
Property”  means (a) all
inventions (whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents and patent applications
claiming such inventions, (b) all trademarks, service marks, trade dress,
logos, trade names, fictitious names, brand names, brand marks and corporate
names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all
copyrightable works, all copyrights, and all applications, registrations, and
renewals in connection therewith, (d) all mask works and all applications,
registrations, and renewals in connection therewith, (e) all trade secrets
(including research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, methodologies, technical
data, designs, drawings and specifications), (I) all computer software
(including data, source and object codes and related documentation), (g) all
other proprietary rights or (h) all copies and tangible embodiments
thereof (in whatever form or medium) which, in the case of any or all of the
foregoing, have been or are developed or created in whole or in part by
Executive at any time and at any place while Executive is employed by the
Company and have been or are created for the purpose of performing Executive’s
duties on behalf of the Company.

 

6

 

6.4           Acknowledgements.  Executive acknowledges that the Restrictive
Covenants are reasonable and necessary to protect the legitimate interests of
the Company, that the duration and geographic scope of the Restrictive
Covenants are reasonable given the nature of this Agreement and the position
Executive holds within the Company, and that the Company would not enter into
this Agreement or otherwise employ or continue to employ Executive unless
Executive agrees to be bound by the Restrictive Covenants set forth in this Section 6.

 

6.5           Remedies and Enforcement Upon Breach.

 

6.5.1        Intention.  It is the intention of the parties that the
foregoing restrictive covenant be enforced as written, and, in any other event,
enforced to the greatest extent (but to no greater extent) in time, territory
and degree of participation as permitted by applicable law. Accordingly, in the
event that any court to which a dispute over these restrictions may be referred
shall find any of these restrictions overly broad or unreasonable in any way,
that court must enforce the restrictions to the greatest extent deemed
reasonable.

 

6.5.2        Specific Enforcement.  Executive acknowledges that any breach by
him, willfully or otherwise, of the Restrictive Covenants will cause continuing
and irreparable injury to the Company for which monetary damages would not be
an adequate remedy.  In the event of any
such breach or threatened breach by Executive of any of the Restrictive
Covenants, the Company shall be entitled to injunctive or other similar
equitable relief in any court, without any requirement that a bond or other
security be posted, and this Agreement shall not in any way limit remedies of
law or in equity otherwise available to the Company.

 

6.5.3.       Enforceability.  If any court holds the Restrictive Covenants
unenforceable by reason of their breadth or scope or otherwise, it is the
intention of the parties hereto that such determination not bar or in any way
affect the right of the Company to the relief provided above in the courts of
any other jurisdiction within the geographic scope of such Restrictive
Covenants.

 

6.5.4.       Disclosure of  Restrictive
Covenants.  Executive agrees to
disclose the existence and terms of the Restrictive Covenants to any employer
that Executive may work for during the Restricted Period.

 

6.5.5.       Extension of  Restricted Period.  If the Executive breaches Section 6.1
in any respect, the restrictions contained in that section will be extended for
a period equal to the period that the Executive was in breach.

 

7.             Miscellaneous.

 

7.1           Other Agreements.  Executive represents and warrants to the
Company that there are no restrictions, agreements or understandings whatsoever
to which Executive is a party that would prevent or make unlawful his/her
execution of this Agreement, that would be inconsistent or in conflict with
this Agreement or Executive’s obligations hereunder, or that would otherwise
prevent, limit or impair the performance of Executive’s duties under this
Agreement.

 

7

 

7.2           Successors and Assigns.  This Agreement shall be binding upon 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, and the Company shall require any such successor to expressly assume
and agree in writing to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place, or, in the event the Company remains in existence,
the Company shall continue to employ Executive under the terms hereof.   As used in this Agreement, the “Company”
shall mean the Company and any successor to its business and/or assets, which
assumes or is obligated to perform this Agreement by contract, operation of law
or otherwise.  This Agreement shall inure
to the benefit of and be enforceable by Executive and his personal or legal
representatives, executors, estate, trustee, administrators, successors, heirs,
distributees, devisees and legatees.  The
duties of Executive hereunder are personal to Executive and may not be assigned
by him.  If Executive dies and any
amounts become payable under this Agreement, the Company will pay those amounts
to his estate.

 

7.3           Governing Law and Enforcement;
Disputes.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Utah, without
regard to the principles of conflicts of laws. 
Any legal proceeding arising out of or relating to this Agreement will
be instituted in a state or federal court in the State of Utah, and Executive
and the Company hereby consent to the personal and exclusive jurisdiction of
such court(s) and hereby waive any objection(s) that they may have to
personal jurisdiction, the laying of venue of any such proceeding and any claim
or defense of inconvenient forum.

 

7.4           Waivers.  The waiver by
either party of any right hereunder or of any breach by the other party will
not be deemed a waiver of any other right hereunder or of any other breach by
the other party.  No waiver will be
deemed to have occurred unless set forth in writing. No waiver will constitute
a continuing waiver unless specifically stated, and any waiver will operate
only as to the specific term or condition waived.

 

7.5           Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law.  However, if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability will not affect
any other provision, and this Agreement will be reformed, construed and
enforced as though the invalid, illegal or unenforceable provision had never
been herein contained.

 

7.6           Survival.  Section 6
of this Agreement will survive termination of this Agreement and/or the
cessation of Executive’s employment by the Company.

 

7.7           Notices.  Any notice or communication required or
permitted under this Agreement shall be made in writing and shall be sufficient
if personally delivered or sent by registered or certified mail and addressed,
if to Employee, to Employee’s address set forth in NSP’s records, or if to NSP,
to its principal office, to the attention of the CEO.  Such notice shall be deemed given when
delivered if delivered personally, or, if sent by registered or certified mail,
at the earlier of actual receipt or three days after mailing in United States
mail, addressed as aforesaid with postage prepaid.

 

8

 

7.8           Entire Agreement: Amendments.  This Agreement, the attached exhibits, the
Plan, and the Award Agreement contain the entire agreement and understanding of
the parties hereto relating to the subject matter hereof; and merge and
supersede all prior and contemporaneous discussions, agreements and
understandings of every nature relating to Executive’s employment or engagement
with, or compensation by, the Company and any of its affiliates or subsidiaries
or any of their predecessors, including, without limitation, the Existing
Agreement.  This Agreement may not be
changed or modified, except by an agreement in writing signed by each of the
parties hereto.

 

7.9           Withholding.  All payments to Executive will be subject to
tax withholding in accordance with applicable law.

 

7.10         Section Headings.  The headings of sections and paragraphs of
this Agreement are inserted for convenience only and shall not in any way
affect the meaning or construction of any provision of this Agreement.

 

7.11         Counterparts;
Facsimile.  This Agreement may be
executed in multiple counterparts (including by facsimile signature), each of
which will be deemed to be an original, but all of which together will
constitute one and the same instrument.

 

7.12         Third Party
Beneficiaries.  Subject to Section 7.2,
this Agreement will be binding on, inure to the benefit of and be enforceable
by the parties and their respective heirs, personal representatives, successors
and assigns.  This Agreement does not
confer any rights, remedies, obligations or liabilities to any entity or person
other than Executive and the Company and Executive’s and the Company’s
permitted successors and assigns, although this
Agreement will inure to the benefit of the Company.

 

[This space left blank intentionally; signature page follows]

 

9

 

	
  Employee:

  	
   

  	
  Employer:

  
	
   

  	
   

  	
   

  	
   

  
	
  STEPHEN M. BUNKER

  	
   

  	
  NATURE’S SUNSHINE PRODUCTS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Stephen M. Bunker

  	
   

  	
  By

  	
  /s/
  Douglas Faggioli

  
	
  Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name

  	
  Douglas
  Faggioli

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  	
  CEO/President

  
					

 

10

 

EXHIBIT A

 

RELEASE AGREEMENT

 

THIS RELEASE AGREEMENT (this “Release”) is
made as of the day of
           day of
                  ,
                    
by and between
                                      
(the “Executive”) and Nature Sunshine
Products, Inc. (the “Company”).

 

WHEREAS, Executive’s employment as an executive of the Company has
terminated; and

 

WHEREAS, pursuant to Section 5 of the Employment Agreement
by and between the Company and Executive dated
                                          
(the “Agreement”), the Company has agreed to pay Executive certain amounts and
to provide him with certain rights and benefits, subject to the execution of
this Release.

 

NOW THEREFORE, in consideration of these premises and the mutual
promises contained herein, and intending to be legally bound hereby, the parties
agree as follows:

 

1.             Consideration. Executive acknowledges that: (i) the
payments, rights and benefits set forth in Section 5 of the
Agreement constitute full settlement of all his/her rights under the Agreement,
and (ii) except as otherwise provided specifically in this Release, the
Company does not and will not have any other liability or obligation to
Executive under the Agreement. Executive further acknowledges that, in the
absence of his execution of this Release, the benefits and payments specified
in the Agreement (other than those specified) would not otherwise be due to
him/her.

 

2.             Release and Covenant Not to Sue.

 

2.1           Executive and the
Company each hereby fully and forever releases and discharges the other, and
all of their respective predecessors and successors, assigns, stockholders,
subsidiaries, parents, affiliates, officers, directors, trustees, employees,
agents and attorneys, past and present and in their respective capacities as
such (the Company and Executive and each such respective person or entity is
each referred to as a “Released Person”)
from any and all claims, demands, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, controversies, debts, costs,
expenses, damages, judgments, orders and liabilities, of whatever kind or
nature, direct or indirect, in law, equity or otherwise, whether known or
unknown, arising through the date of this Release, including those arising out
of Executive’s employment by the Company or the termination thereof, including,
but not limited to, any claims for relief or causes of action under the Age
Discrimination in Employment Act, 29 U.S.C. §  621 et seq., or any other
federal, state or local statute, ordinance or regulation regarding
discrimination in employment and any claims, demands or actions based upon
alleged wrongful or retaliatory discharge or breach of contract under any state
or federal law.

 

2.2           Executive and the
Company expressly represent that they have not filed a lawsuit or initiated any
other administrative proceeding against a Released Person and that neither has
assigned any claim against a Released Person. Executive and the Company each 

 

 

further promise not to
initiate a lawsuit or to bring any other claim against the other or any
Released Person arising out of or in any way related to Executive’s employment
by the Company or the termination of that employment.  This Release will not prevent Executive from
filing a charge with the Equal Employment Opportunity Commission (or similar
state agency) or participating in any investigation conducted by the Equal
Employment Opportunity Commission (or similar state agency); provided, however, that any claims by
Executive for personal relief in connection with such a charge or investigation
(such as reinstatement or monetary damages) would be barred.  This Release shall not affect Executive’s
rights under the Age Discrimination in Employment Act or the Older Workers
Benefit Protection Act to have a judicial determination of the validity of this
release and waiver.

 

3.             Restrictive Covenants.  Executive acknowledges that the restrictive
covenants contained in Section 6 of the Agreement will survive the
termination of his employment. Executive affirms that those restrictive
covenants are reasonable and necessary to protect the legitimate interests of
the Company, that he received adequate consideration in exchange for agreeing
to those restrictions and that he will abide by those restrictions.

 

4.             Non-Disparagement.  Neither Executive nor the Company will disparage
the other or any of their respective Released Persons or otherwise take any
action which could reasonably be expected to adversely affect the personal or
professional reputation of the other or their respective Released Persons.

 

5.             Cooperation.  Executive further agrees that, subject to
reimbursement of his reasonable expenses, he will cooperate fully with the
Company and its counsel with respect to any matter (including litigation,
investigations, or governmental proceedings) in which Executive was in anyway
involved during his employment with the Company. Executive shall render such
cooperation in a timely manner on reasonable notice from the Company.

 

6.             Rescission Right. 
Executive expressly acknowledges and recites that (a) he has read
and understands the terms of this Release in its entirety, (b) he has
entered into this Release knowingly and voluntarily, without any duress or
coercion; (c) he has been advised orally and is hereby advised in writing
to consult with an attorney with respect to this Release before signing it; (d) he
was provided twenty-one (21) calendar days after receipt of the Release to
consider its terms before signing it; (e) should he nevertheless elect to
execute this Agreement sooner than 21 days after he has received it, he specifically
and voluntarily waives the right to claim or allege that he has not been
allowed by the Company or by any circumstances beyond his control to consider
this Agreement for a full 21 days; and (f) he is provided seven (7) calendar
days from the date of signing to terminate and revoke this Release, in which
case this Release shall be unenforceable, null and void. Executive may revoke
this Release during those seven (7) days by providing written notice of
revocation to the Company at the address specified in Section 7.8
of the Agreement.

 

7.             Challenge. 
If Executive violates or challenges the enforceability of any provisions
of the Restrictive Covenants or this Release, no further payments, rights or
benefits under Section 5  of the Agreement will be due to Executive
(except where such provision would be prohibited by applicable law, rule or
regulation).

 

12

 

8.             Miscellaneous.

 

8.1           No Admission of
Liability.  This Release is not to
be construed as an admission of any violation of any federal, state or local
statute, ordinance or regulation or of any duty owed by the Company to
Executive. There have been no such violations, and the Company specifically
denies any such violations.

 

8.2           No Reinstatement.
Executive agrees that he will not without the consent of the Company apply for
reinstatement with the Company or seek in any way to be reinstated, re-employed
or hired by the Company in the future,

 

8.3           Successors and
Assigns. This Release shall inure to the benefit of and be binding upon the
Company and Executive and their respective successors, permitted assigns,
executors, administrators and heirs. Executive shall not may make any
assignment of this Release or any interest herein, by operation of law or otherwise.
The Company may assign this Release to any successor to all or substantially
all of its assets and business by means of liquidation, dissolution, merger,
consolidation, transfer of assets, or otherwise.

 

8.4           Severability.
Whenever possible, each provision of this Release will be interpreted in such
manner as to be effective and valid under applicable law. However, if any
provision of this Release is held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability will not affect
any other provision, and this Release will be reformed, construed and enforced
as though the invalid, illegal or unenforceable provision had never been herein
contained.

 

8.5           Entire Agreement:
Amendments. Except as otherwise provided herein, this Release contains the
entire agreement and understanding of the parties hereto relating to the
subject matter hereof, and merges and supersedes all prior and contemporaneous
discussions, agreements and understandings of every nature relating to the
subject matter hereof This Release may not be changed or modified, except by an
agreement in writing signed by each of the parties hereto.

 

8.6           Governing Law.
This Release shall be governed by, and enforced in accordance with, the laws of
the State of Utah, without regard to the application of the principles of
conflicts of laws.

 

8.7           Counterparts and
Facsimiles. This Release may be executed, including execution by facsimile
signature, in multiple counterparts, each of which shall be deemed an original,
and all of which together shall be deemed to be one and the same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

13

 

	
  Employee:

  	
   

  	
  Employer:

  
	
   

  	
   

  	
   

  	
   

  
	
  STEPHEN M. BUNKER

  	
   

  	
  NATURE’S SUNSHINE PRODUCTS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
  Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
					

 

14

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