EXHIBIT 10.25
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and effective this 1st day of
November, 1999, by and between Mannatech, Incorporated ("Employer"), a Texas
corporation whose principal place of business is 000 X. Xxxxx Xxxx, Xxxxx 000,
Xxxxxxx, Xxxxx and Xxxxx X. Xxxxxxxxx ("Employee"), who resides at 0000
Xxxxxxxxxxxx Xxxxxx X.X., Xxxxxx, Xxxx 00000.
WITNESSETH:
WHEREAS, the Employer is in the business of operating a network marketing
company which sells a proprietary line of dietary supplements, cosmetics and
over-the-counter drugs ("Products") and which compensates its distributors
("Associates") by a defined compensation plan;
WHEREAS, in connection with the development of its business the Employer has
agreed to hire Employee as Executive Vice President and Chief Operating Officer
for Domestic Operations under terms and conditions to be set forth herein; and
WHEREAS, Employer intends to enter into a confidential relationship with the
Employee whereby the Employee will acquire an intimate knowledge of the
Employer's business and will obtain or has obtained specialized skills. The
Employer will permit the Employee to have access to and to utilize the business
goodwill, cost and pricing information, CONFIDENTIAL INFORMATION (as defined
herein) and various trade secrets of the Employer, including without limitation,
marketing programs, business relationships, customer lists, business plans,
financial data, privileged legal information and other compilations of
information developed by the Employer and essential to its business;
WHEREAS, the Employee will be a key employee of the Employer and the Employer
will provide or has provided the Employee with access to such CONFIDENTIAL
INFORMATION and trade secrets in reliance upon the Employee entering into this
Agreement; and
WHEREAS, in conjunction with the Employee's hiring and subsequent access to
and use of the CONFIDENTIAL INFORMATION and trade secrets of the Employer, the
Employee has agreed to enter into this Agreement with the Employer;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and upon the terms, conditions and provisions hereinafter set
forth, the Employer and the Employee do hereby agree as follows:
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ARTICLE I
DUTIES AND COMPENSATION
1. Employee is hired, commencing November 1, 1999 as Executive Vice President
and Chief Operating Officer for Domestic Operations. The term of this
Agreement, unless otherwise modified in writing is for a three (3) year calendar
period, ending on October 31, 2002.
2. Employee is engaged to serve as Executive Vice President and Chief
Operating Officer for Domestic Operations at an annual salary of $300,000 (Three
Hundred Thousand Dollars). Employee, initially, shall report directly to the
Chief Executive Officer and be directly responsible for domestic operations by
managing those departments illustrated and set forth in Exhibit "A" hereto,
incorporated by reference.
3. The Employee shall be entitled to the reimbursement of all legitimate
expenses incurred as an Employee of the Employer, which shall also specifically
include, air fare to and from Canton, Ohio and reasonable living expenses until
such time as employee shall have moved his residence to the Dallas-Fort Worth,
Texas Area. The Company shall also pay the reasonable costs of relocation by
the Employee and his family to the Dallas-Fort Worth area; including all closing
and brokerage costs the Employee shall incur in connection with the sale of his
present home.
4. Employee is eligible and shall participate in accordance with the usual
rules of participation in all Company and officer benefits accorded and accruing
to an employee of his rank. These include, but may not be limited to:
a. Medical, dental, life, long and short-term disability insurance,
commencing 31 days after the inception of employment;
b. The executive company car program;
c. Company stock option plans commencing in the year 2000 on a basis
equivalent to all other persons of his corporate rank and title;
d. The executive bonus plan (which participation will be pro-rated for
calendar 1999, based upon your term of employment) on a basis
equivalent to all other persons of his corporate rank and title; and
e. The company's 401-K Plan.
As additional benefits and programs of benefits are added for employees,
generally, and employees of your rank, specifically, you will be entitled to
participate in those benefits and programs of benefits as the same become
offered.
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ARTICLE II
DUTIES, NON-COMPETITION and NON-SOLICITATION
1. Employee agrees to serve in the position of Executive Vice President and
Chief Operating Officer for Domestic Operations, or such other position as the
parties may hereafter agree during the term of this agreement, and to perform
diligently and to the best of Employee's abilities the duties and services
appertaining to such offices, as well as such additional duties and services
appropriate to such office upon which the parties mutually may agree from time-
to-time or as shall be designated by the Board of Directors. The Employee also
agrees that his employment is subject to the current and future policies and
procedures maintained and established by the Employer. The Employee shall
devote the Employee's full productive time, best efforts, ability and attention
to the business of the Employer and the performance of the Employee's duties.
2. Employee acknowledges and understands that from time to time the
Employee's duties may require the Employee to work on-site at a non-company
location. In such instance, the Employee agrees to comply with all of the
policies, procedures and directives relevant to working at such non-company
location.
3. Employee represents and admits that in the termination of the Employee's
employment for any reason whatsoever, the Employee's experiences and
capabilities are such that the Employee can obtain employment in business
engaged in other lines and/or of a different nature, and that the enforcement of
a remedy by way of injunction will not prevent the Employee from earning a
livelihood.
4. Employee acknowledges that the Employee will receive special knowledge and
specialized training from the Employer, included in which is the CONFIDENTIAL
INFORMATION identified in Article III below. The Employee further acknowledges
that training provided by the Employer and the CONFIDENTIAL INFORMATION is
valuable to the Employer and, therefore, the Employer's investment in the
training and the protection and maintenance of the CONFIDENTIAL INFORMATION
constitutes a legitimate interest to be protected by the Employer by the
covenant not to compete, set forth in Article II of this Agreement.
5. Non-Competition. The Employee therefore agrees that for a period of one
(1) year after the Employee shall cease to be employed by the Employer for any
reason, the Employee shall not engage in any form of business which is
competition with the Employer, including through the business of any person,
company, firm, corporation, partnership, association, agency, or business, and
particularly through a party known to the Employee to be an independent contract
sales associate and/or customer of the Employer or with whom the Employee had
contact during, or by reason of, the Employee's employment by the Employer.
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6. Non-Solicitation. The Employee further agrees that for a period of one
(1) year after the Employee shall cease to be employed by the Employer for any
reason, the Employee will not, either directly or indirectly, through any
person, firm, association or corporation with which the Employee, customer
and/or independent contractor sales associate ("Subject Person") is now or may
hereafter become associated with, solicit, cause, influence or induce any
present or future Subject Person of the Employer or its affiliates to leave the
employ or business relationship with the Employer or its affiliates to accept
employment or a business relationship with the Employee or with such person,
firm, association, or corporation with whom the Employee may then be affiliated.
As set forth above, the Employee acknowledges that the foregoing non-
competition and non-solicitation covenants are ancillary to or a part of an
otherwise enforceable agreement, such being the general agreement of Employment
and its related agreements concerning confidentiality and non-disclosure of
CONFIDENTIAL INFORMATION and non-solicitation, at the time that this non-
competition covenant is made, that the limitations as to time defined herein are
reasonable and do not impose a greater restraint than is necessary to protect
the goodwill or other business interests of the Employer, that the limitations
as to geographic area defined herein are reasonable and do not impose a greater
restraint than is necessary to protect the goodwill or other business interests
of the Employer, and that the scope of activity to be restrained defined herein
is reasonable and does not impose a greater restraint than is necessary to
protect the good will or other business interests.
7. Employee agrees that in the highly competitive business in which the
Employer is engaged, personal contact is of primary importance in securing new
and retaining present Associates and customers. The Employee also agrees that
the Employer has a legitimate interest in maintaining its relationships with its
Associates and customers and that it would be unfair for the Employee to solicit
the business of the Employer's Associates and customers and exploit the personal
relationships the Employee develops with the Employer's Associates and customers
by virtue of the Employee's access to the Employer's customers as a result of
the Employee's employment by the Employer.
8. The foregoing covenants not to compete and solicit shall not be held
invalid or unenforceable because of the scope or the territory or actions
subject thereto or restricted thereby, or the period of time within which such
Agreement is operative; but an award or decree in arbitration or any judgment of
a court of competent jurisdiction, as the case may be, may define the maximum
territory and actions subject thereto and restricted by this Article II and the
period of time during which the Agreement is enforceable. Any alleged breach of
other provisions of this Agreement asserted by the Employee shall not be a
defense for the Employee to claims arising from the Employer's enforcement of
the provisions of this paragraph. Should the Employee violate the non-
competition, non-solicitation covenants of this Article II, then the period of
time for these covenants shall automatically be extended for the period of time
from which the Employee began such violation until the Employee permanently
ceases such violation.
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9. Irrespective of the term of employment under this Agreement, and in
consideration of the promises specified in Article II of this Agreement, the
Employer agrees as follows:
a. To provide specialized training as specified herein; and
b. To provide the Employee with access to the Employer's software and files,
records, marketing procedures, processes, computer programs, compilations of
information, records, Associate and client requirements, pricing techniques,
lists, formulae, lists identifying Associates, partners, potential investors,
methods of doing business and other CONFIDENTIAL INFORMATION which is regularly
used in the operation of the business of the Employer.
10. Employee represents and warrants that the delivery and execution of this
agreement will not cause a breach in the terms of any existing agreement to
which he is a party nor interfere with any undertakings which he is bound to
perform or refrain from under any such agreements.
11. Article II, Paragraphs 5 and 6 shall survive the execution, performance
and/or termination of this Agreement, subject to the time and scope limitations
set forth therein.
ARTICLE III
CONFIDENTIAL INFORMATION
1. The Employer will provide or has provided the Employee with specialized
information concerning the products and the business operations of the Employer.
Irrespective of the term of employment, and in consideration of the Employee's
promises specified in Article II of this Agreement, the Employer agrees to
provide specialized training and instruction to the Employee for the job duties
assigned to the Employee, and agrees to provide specialized training to the
Employee for such additional job duties as the Employer may, in good faith,
direct or as the interests, needs and business opportunities of the Employer
shall require or make advisable.
2. During the course of the Employee's employment and training incident
thereto the Employee will be or was given access to the Employer's CONFIDENTIAL
INFORMATION concerning Products and the business operations of the Employer.
3. The Employee acknowledges that in the further course of the Employee's
employment with the Employer, the Employee will gain a close, personal and
special influence with the Employer's customers and will be acquainted with all
of the Employer's business, particularly the Employer's CONFIDENTIAL INFORMATION
concerning the business of the Employer and its affiliates.
4. For purposes of this Agreement "CONFIDENTIAL INFORMATION" shall mean and
include information disclosed to the Employee or known by the Employee through
the
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Employee's employment with the Employer, not generally known in the Employer's
industry, about the Employer's products, processes and services, including but
not limited to information concerning inventions, trade secrets, research and
development, as well as all data or information concerning customers (including,
Associates), customer lists (including downline reports and similar reports of
business activities and relevant information concerning persons who conduct the
same), prospect lists, mailing lists, sales leads, contracts, financial reports,
sales, purchasing, price lists, product costs, marketing programs, marketing
plans, business relationships, business methods, accounts payable, accounts
receivable, accounting procedures, control procedures and training materials.
5. The Employee recognizes that the Employee's position with the Employer is
one of the highest trust and confidence by reason of the Employee's access to
the CONFIDENTIAL INFORMATION and the Employee agrees to use the Employee's best
efforts and will exercise utmost diligence to protect and safeguard the
CONFIDENTIAL INFORMATION. In this respect, the Employee agrees that fulfilling
the obligations of the Agreement is part of the Employee's job responsibilities
with the Employer for which the Employee has been retained as an Employee and
for which the Employee has received consideration therefor.
6. Except as may be required by the Employer in connection with and during
the Employee's employment with the Employer, or with the express written
permission of the Employer, the Employee shall not, either during the Employee's
work as an employee with the Employer or at any time thereafter, directly or
indirectly, download, printout, copy, remove from the premises of the Employer,
use for the Employee's own benefit or for the benefit of another, or disclose to
another, any CONFIDENTIAL INFORMATION of the Employer, its customers,
contractors or other with which the Employer has a business relationship.
7. Employee agrees that all files, memoranda, data, notes, records, drawings,
charts, graphs, analyses, letters, reports, or other documents or similar items
made or compiled by the Employee, made available to the Employee or otherwise
coming into the Employee's possession while employed by the Employer concerning
any process, apparatus or products manufactured, sold, used, developed,
investigated or considered by the Employer concerning the CONFIDENTIAL
INFORMATION or concerning any other business or activity of the Employer shall
remain at all times the property of the Employer and shall be delivered to the
Employer upon termination of the Employee's employment with the Employer or at
any other time upon request.
8. The Employee agrees that, during the term of the Employee's employment
with the Employer or upon termination thereof, and if requested by the Employer
to do so, the Employee will sign an appropriate list of any and all CONFIDENTIAL
INFORMATION of the Employer of which the Employee has knowledge or about which
the Employee has acquired information.
9. This Article 9 shall survive the execution, performance and/or termination
of this
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Agreement.
ARTICLE IV
ASSIGNMENT OF INVENTIONS
1. The Employee agrees to promptly disclose to the Employer and Employee
hereby assigns to the Employer or its designee, its assigns, successors or legal
representatives, all, right, title and interest in and to any and all patents,
formulae, inventions, processes, designs, software, firmware, circuitry,
diagrams, copyrights, trade secrets, and any other proprietary information
(collectively, the "Proprietary Information") whatsoever, conceived, developed
or completed by the Employee during the course of the Employee's employment with
the Employer, or using the Employer's time, data, facilities and/or materials,
provided the subject matter of the Proprietary Information is within the scope
of the duties and responsibilities of one in the Employee's position with the
Employer or occurs as a result of the Employee's knowledge of a particular
interest of the Employer.
2. The Employee agrees to assist the Employer at any time during the
Employee's employment with the Employer, or after termination of the Employee's
employment by the Employer with reimbursement by the Employer for all expenses
incurred, in the preparation, execution, and delivery of any assignments,
disclosures, patent applications, or papers within the scope and intent of this
Agreement required to obtain patents or copyrights in the Proprietary
Information in this or a foreign country and in connection with such other
proceedings as may be necessary to vest title to the Proprietary Information in
the Employer, its assigns, successors, or legal representatives.
ARTICLE V
MISCELLANEOUS
1. Termination. Nothing contained in this Agreement shall be construed as
impairing the right of the Employer to terminate the Employee's employment with
the Employer hereunder, provided that Employer shall be liable to compensate the
Employee as follows:
a. By continuing to pay his base salary, set forth in Article I,
paragraph II through October 31, 2002 on the usual and customary
pay dates of the Corporation, falling every other week; provided,
however, should October 31, 2002 fall between pay periods, the
amount due the Employee shall be paid to him on October 31, 2002
as the final amount due under this provision. In the sole
discretion of the Employer, at the request of the Employee, a
lump sum payment of the amounts that are to become due under the
terms of this Article V, Paragraph 1.a. in the instance of
termination of the Employee prior to the end of the term of this
Agreement, may be paid in a lump sum, which sum shall be
discounted by that percentage rate which is the then prevailing,
and in effect, interest rate
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for a United States Treasury Security, having a maturity of three
(3) years, publicly quoted during the week in which the
termination, if any, occurred. Should such treasury security
cease being sold, offered or quoted, the parties, in good faith,
shall select an equivalent index or discount rate by which to
make the discount computation;
b. By delivering to the Employee, Stock Options, if any, he would
have earned as awarded by any resolution of the Board of
Directors or the compensation respecting that calendar year in
which termination, if any, ensued, identical in vesting and
terms, but with the awarded number of option shares being reduced
ratably based upon the period of service of the Employee prior to
termination, compared with twelve months' service;
c. By paying, to the Employee, when all similar bonuses are paid in
the next calendar year, respecting that calendar year in which
termination, if any, ensued, that bonus he would have earned, if
any, had he remained employed by the Employer, reduced ratably
based on the period of service of the Employee prior to
termination, compared with twelve months' service.
(For computational purposes, termination during days 1-15 of the month shall not
count as that month's service; however, termination during days 16 through and
up to 31, shall count as that month's service.)
2. Obligations. The Employee's obligations under this Agreement shall
continue, survive and remain enforceable in accordance with the terms hereof,
whether or not the Employee's employment with the Employer shall be terminated
voluntarily or involuntarily, with or without reason.
3. Future Agreement. Should this Agreement expire in accordance with its
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terms with the Employee within the employment of the Employer, the parties will
renew this Agreement on terms and conditions similar to other employees of equal
title and position within the Employer's organization.
4. Enforcement. It is the express intention of the parties to this Agreement
to comply with all laws applicable to the covenants and provisions contained in
this Agreement. If any of the covenants contained in this Agreement are found
to exceed in duration or scope those permitted by law, it is expressly agreed
that such covenant may be reformed or modified by the award or decree of an
arbitrator, or, if applicable, a final judgment of a court of competent
jurisdiction or other lawful constituted authority, as the case may be, to
reflect a lawful and enforceable duration or scope, and such covenant
automatically shall be deemed to be amended and modified so as to comply with
the arbitration award, decree, judgment or order of such court or authority, as
the case may be. If any one or more of the provisions contained herein shall
for
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any reason be held invalid, illegal or unenforceable in any respect even after
reformation, such invalidity, illegality or unenforceability shall not affect
the enforceability or validity of any other provision contained in this
Agreement, and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provisions had never been contained herein.
5. Adequacy of Consideration; Separate Agreements. The Employee agrees that
the agreements, non-competition agreements, nondisclosure agreements, and non-
solicitation agreements set forth herein each constitute separate agreements,
independently supported by good and adequate consideration and shall be
severable from the other provisions of this Agreement and shall survive the
Agreement. The existence of any claim or cause of action of the Employee
against the Employer, whether predicated on this agreement or otherwise, shall
not constitute a defense to the enforcement by the Employer of the covenants and
agreements of the Employee contained in the non-competition, nondisclosure or
the non-solicitation agreements. If a court of competent jurisdiction
determines that any restriction in a clause or provision of this Agreement is
void, illegal or unenforceable, the other clauses and provisions of this
Agreement shall remain in full force and effect and the clauses and provisions
that are determined to void, illegal or unenforceable shall be limited so that
they shall remain in effect to the fullest extent permitted by law.
6. No Indirect Breach. The Employee will use his best efforts to ensure that
no relative of his, nor any corporation or other entity or which he is a
officer, principal, manager, director or shareholder or other affiliate, shall
take any action that the Employee could not take without violating any provision
of this Agreement.
7. Injunctive Relief. The Employee recognizes and acknowledges that damages
in the event of his breach of certain provisions of this Employment Agreement
would be inadequate, and the Employee agrees that the Employer, in addition to
all other remedies it may have, shall have the right to injunctive relief via
arbitration if there is a breach by the Employee of any one or more of the
provisions contained in Article II hereof.
8. Arbitration. Arbitration, including the right to invoke injunctive relief
and any emergency relief or measures provided for, shall be the exclusive remedy
for any and all disputes, claims or controversies, whether statutory,
contractual or otherwise, between the Employer and the Employee concerning the
Employee's employment or the termination thereof. In the event either party
provides a Notice of Arbitration of Dispute to the other party, the Employer and
the Employee agree to submit such dispute or controversy, whether statutory or
otherwise, to an arbitrator or arbitrators selected from a panel of arbitrators
of the American Arbitration Association located in Dallas, Texas. The effective
rules at the time of the commencement of the of Commercial Arbitration of the
American Arbitration Association shall control the arbitration. In any
arbitration proceeding conducted subject to these provisions, all statutes of
limitations that would otherwise be applicable shall apply to any arbitration
proceeding hereunder. In any arbitration proceeding conducted subject to these
provisions, the arbitrator(s) is/are specifically empowered to decided any
question pertaining to limitations, and
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may do so by documents or by a hearing, in his or her sole discretion. In this
regard, the arbitrator may authorize the submission of pre-hearing motions
similar to a motion to dismiss or for summary adjudication for the purposes of
consideration this matter. The arbitrator's decision will be final and binding
upon the parties. The parties further agree to abide by and perform any award
rendered by the arbitrator. The prevailing party in such proceeding shall be
entitled to record and have awarded its reasonable attorney's fees, in addition
to any other relief to which it may be entitled. In rendering the award, the
arbitrator shall state the reasons therefor, including any computations of
actual damages or offsets, if applicable.
9. Waiver of Breach. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by any party.
10. Entire Agreement. This Agreement contains the entire agreement of the
parties hereto. no modification or amendment of this Agreement may be made
except by written agreement signed by both of the parties hereto.
11. Descriptive Headings. All headings, captions and arrangements used in
this Agreement are intended solely for the convenience of the parties and shall
not be deemed to limit, amplify or modify the terms of this Agreement nor affect
the meaning thereof.
12. Governing Law. The substantive laws of the State of Texas, excluding any
conflicts of law rule or principle that might otherwise refer to the substantive
law of another jurisdiction, shall govern the interpretation, validity and
effect of this Agreement without regard to the place for performance thereof.
This Agreement has been executed and delivered by the parties hereto in Dallas
County, Texas, and the Employer and the Employee agree that venue as to any
action which might ensue after arbitration shall be proper, if permitted,
within the state or federal courts in Dallas County, Texas to decide any matter
relating to this Agreement or the related arbitration.
13. Notices. Any notice or communication required or permitted hereby shall
be in writing and shall be delivered personally, sent by prepaid telegram and
followed with a confirming letter, or mailed by certified or registered mail,
postage prepaid.
(a) If to the Employee, to:
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(b) If to the Employer, to:
Mannatech, Incorporated
000 X. Xxxxx Xxxx, Xxxxx 000
00
Xxxxxxx, Xxxxx 00000
or in the case of each party hereto, to such other address and to the
attention of such other person as may have theretofore been specified in
writing in like manner by such party to the other party. Each such notice
or communication shall be deemed to have been given as of the date so
delivered or at the expiration of the third business day following the date
of the mailing.
14. Assignment. This Agreement shall insure to the benefit of and be binding
upon the Employer and the Employee and their respective successors and assigns.
The Employee shall not be entitled to assign any rights or obligations
hereunder.
15. Prior Agreement. This Agreement supersedes all prior agreements, if any,
between the parties of any and every nature whatsoever, including agreements for
additional compensation or benefits. All such prior agreements are null and
void.
16. Employee Acknowledgement. The Employee affirms and attests by signing
this Agreement that employee has read this Agreement before signing it and that
employee fully understands its purposes, terms, and provisions, which employee
hereby expressly acknowledges to be reasonable in all respects. The Employee
further acknowledges receipt of one (1) copy of this Agreement.
17. Approvals and Consents. This Agreement is subject to the approval of the
Board of Directors and the Compensation Committee of Mannatech, Incorporated.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of this
First day of November, 1999.
EMPLOYEE:
/s/: Xxxxx X. Xxxxxxxxx
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EMPLOYER:
Mannatech, Incorporated
A Texas Corporation
/s/ Xxxxxxx X. Xxxxxxxx
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