EXHIBIT 10.2
NATURAL HEALTH TRENDS CORP.
NON-COMPETITION AND PROPRIETARY RIGHTS
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ASSIGNMENT AGREEMENT
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Employee's Name: Xxxxxx Xxxxx ("Employee")
Date: January 3, 2007
In consideration of Employee's employment by or other similar
relationship with Natural Health Trends Corp. (including their
subsidiaries, successors and assigns, the "Company") and in
consideration for and as a condition to the transactions contemplated
by that certain Letter Agreement dated as of the date hereof by and
between the Company and the Employee, the Employee hereby agrees with
the Company as follows:
1. Confidential Information. During the term of this Agreement
and in the course of Employee's performance of services for the Company,
Employee may receive and otherwise be exposed to confidential or competitively
sensitive information of the Company, or of a third party with which the Company
has a business relationship, relating to the Company's or such third party's
current or prospective business, research and development activities, products,
technology, strategy, organization and/or finances (collectively, "Confidential
Information"). Such Confidential Information, which may be disclosed orally or
in writing, shall include, without limitation, Technology (as defined in Section
2(a)), Work Product (as defined in Section 2(a)), plans, strategies,
negotiations, customer or prospect identities, market analyses, projections,
forecasts, cost and performance data, sales data, financial statements, price
lists, pre-release information regarding the Company's products, personnel lists
and data, and all documents and other materials (including any notes, drawings,
reports, manuals, notebooks, summaries, extracts or analyses), whether in
written or electronic form, that disclose or embody such Confidential
Information.
Confidential Information shall not include information that is now, or
hereafter becomes, through no act or failure to act on Employee's part,
generally known to the public; information that was rightfully in Employee's
possession without confidentiality restriction prior to the Company's disclosure
to Employee; information that was rightfully obtained by Employee from a third
party who has the right, without obligation to the Company, to transfer or
disclose such information; or information which Employee is required to disclose
pursuant to judicial order, provided that in the latter case Employee shall
promptly notify the Company and take reasonable steps to assist the Company in
protecting the Company's rights prior to disclosure. At all times, both during
Employee's relationship with the Company and after the termination thereof,
Employee will keep all Confidential Information in strict confidence; will not
use Confidential Information except for the purpose of providing services to the
Company; and will not divulge, publish, disclose or communicate Confidential
Information, in whole or in part, to any third party. Employee further agrees
that Employee will not allow any unauthorized person access to Confidential
Information, either before or after the termination of this Agreement, and will
take all action reasonably necessary and satisfactory to the Company to protect
the confidentiality of Confidential Information. Employee agrees not to
reproduce or copy by any means Confidential Information, except as reasonably
required to accomplish the purposes of this Agreement, and further agrees not to
remove any proprietary rights legend from such Confidential Information or
copies thereof made in accordance with this Agreement. Upon termination of
Employee's services for any reason, or upon demand by the Company at any time,
Employee's right to use Confidential Information shall immediately terminate,
and Employee shall return promptly to the Company, or destroy, at the Company's
option, all tangible and electronic materials that disclose or embody
Confidential Information.
2. Assignment of Work Product.
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(a) For purposes of this Agreement: "Technology" shall
mean all ideas, concepts, inventions, discoveries,
developments, creations, methods, techniques,
processes, machines, products, devices, compositions
of matter, improvements, modifications, designs,
systems, specifications, schematics, formulas, mask
works, works of authorship, software, algorithms,
data and know-how, whether or not patentable or
copyrightable, and all related notes, drawings,
reports, manuals, notebooks, summaries, memoranda and
other documentation; "Intellectual Property Rights"
shall mean all worldwide intellectual property rights
including, without limitation, all rights relating to
the protection of inventions, including patents,
patent applications and certificates of invention;
all rights associated with works of authorship,
including copyrights and moral rights; all rights
relating to the protection of trade secrets and
confidential information; all rights related to the
protection of trademarks, logos and service marks;
any rights analogous to those set forth herein, and
all other proprietary rights related to intangible
property; and "Work Product" shall mean any and all
Technology made, conceived, designed, created,
discovered, invented or reduced to practice by
Employee during the term of this Agreement that (i)
results from Employee's performance of services for
the Company, (ii) is related to the business of the
Company or (iii) is based upon the use of
Confidential Information.
(b) Employee agrees to promptly disclose to the Company
in writing all Work Product upon the development,
conception or creation thereof by Employee, as well
as, at any time, upon the request of the Company.
(c) Employee agrees that all Work Product shall be the
sole and exclusive property of the Company, and does
hereby irrevocably and unconditionally transfer and
assign to the Company, its successors and assigns,
all right, title and interest it may have or acquire
in or to any Work Product, including all Intellectual
Property Rights therein. Employee further agrees that
any and all works of authorship created, authored or
developed by Employee hereunder shall be deemed to be
"works made for hire" within the meaning of the
United States copyright law and, as such, all rights
therein including copyright shall belong solely and
exclusively to the Company from the time of their
creation. To the extent any such work of authorship
may not be deemed to be a work made for hire,
Employee agrees to, and does hereby, irrevocably and
unconditionally transfer and assign to the Company
all right, title, and interest including copyright in
and to such work.
(d) Upon request by the Company, Employee agrees to
execute and deliver all such documents, certificates,
assignments and other writings, and take such other
actions, as may be necessary or desirable to vest in
the Company ownership in all Work Product as provided
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in this Section 2, including, but not limited to, the
execution and delivery of all applications for
securing all United States and foreign patents,
copyrights and other intellectual property rights
relating to Work Product. The Company shall reimburse
Employee for any reasonable expenses incurred by
Employee at the Company's request to secure title or
legal protection on the Company's behalf for any such
Work Product. In the event that the Company is unable
to secure Employee's signature to any document, or if
Employee otherwise fails to take any action deemed
necessary by the Company to protect or maintain the
Company's ownership of Work Product and Intellectual
Property Rights therein, then the Company may, and
Employee hereby irrevocably designates and appoints
the Company and its duly authorized officers and
agents as Employee's agent and attorney-in-fact to
act on and in Employee's behalf and stead to, execute
and file any such applications and perform all other
lawfully permitted acts to perfect Employee's
assignment and transfer of ownership rights to the
Company with the same legal force and effect as if
executed, filed and performed by Employee.
(e) For purposes of this Section 2(e), "Background
Technology" shall mean Technology owned by or
licensed to Employee as of the Effective Date of this
Agreement or developed or otherwise obtained by
Employee following the Effective Date hereof
independently of the performance of services
hereunder by Employee. The Company acquires no rights
in the Background Technology, except as specifically
provided in this Agreement and, as between the
parties, Employee retains all rights therein.
Employee hereby grants to Company a royalty-free,
worldwide, non-exclusive, perpetual, sublicensable
and irrevocable right and license to use, for all
purposes in Company's business, Background Technology
that has been disclosed by Employee to Company or
that is embodied within or related to the use,
operation or improvement of Work Product created by
Employee in connection with Employee's performance of
services for the Company.
3. Representation. Employee hereby represents to the Company that
the Work Product Employee creates under this Agreement will be original, and
that Employee's performance of services under this agreement and the Company's
use of Employee's Work Product will not breach any agreement Employee has with
any third party or the intellectual property rights or other rights of any third
party.
4. Return of Materials. All documents, records, apparatus,
equipment and other physical property, whether or not pertaining to Confidential
Information, which are furnished to Employee by the Company or are produced by
Employee in connection with Employee's services will be and remain the sole
property of the Company. Employee will return to the Company all such materials
and property as and when requested by the Company. In any event, Employee will
return all such materials and property immediately upon termination of
Employee's services for any reason. Employee will not retain any such material
or property or any copies thereof upon such termination.
5. Competitive Activities. From the date hereof until the six (6)
month anniversary of the later of the date on which Employee no longer is
employed by the Company, serves as a consultant to the Company or serves as a
member of the Board of Directors of the Company (the "Non-Compete Restricted
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Period"), Employee will not, directly or indirectly, whether as owner, partner,
shareholder, director, agent, employee, co-venturer or otherwise, without the
written consent of the Company, engage, participate or invest in any business
activity with respect to any multi-level marketing or direct sales organization
that indirectly or directly competes with the Company in recruiting for
independent distributors (collectively, the "Competitive Activities"). The
prohibition set forth in this Section 5 shall not restrict Employee from owning
or holding up to two percent (2%) of the shares of stock of any company
registered or sold on any recognized stock exchange or sold in the
over-the-counter market. Employee understands and agrees that the restrictions
set forth in this Section 5 are intended to protect the Company's reasonable
competitive business interests, its interest in its Confidential Information and
established and prospective customer relationships and goodwill, and agree that
such restrictions are reasonable and appropriate for this purpose.
6. Nonsolicitation of Customers and Distributors. During the
Non-Compete Restricted Period plus six (6) months (the "Nonsolicitation
Period"), Employee will not, in any capacity, directly or indirectly:
(a) solicit business or patronage of any customer or
prospective customer (collectively, "Customer"), or
distributor or prospective distributor (collectively,
"Distributor") of the Company in connection with any
Competitive Activity;
(b) divert, entice, or otherwise take away from the
Company the business or patronage of any Customer or
Distributor, or attempt to do so;
(c) solicit, induce or assist any Customer, Distributor
or supplier to terminate or reduce its relationship
with the Company;
(d) assist with the provision of any services to a
Customer or Distributor (except in Employee's
capacity as an employee of the Company); or
(e) refer a Customer, Distributor or supplier to another
person engaged (or to be engaged) in Competitive
Activities.
7. Nonsolicitation of Employees. During the Nonsolicitation
Period, Employee will not:
(a) hire or employ, directly or indirectly through any
enterprise with which Employee is associated, any
current employee of the Company or any individual who
had been employed by the Company within one (1) year
preceding Employee's termination (other than persons
whose employment by the Company was terminated by or
at the request of the Company); or
(b) recruit, solicit or induce (or in any way assist
another person or enterprise in recruiting,
soliciting or inducing) any employee or director of
the Company to terminate his or her employment or
other relationship with the Company.
8. Acknowledgments. Employee acknowledges and agrees that the
restrictions set forth in this Agreement are intended to protect the Company's
interest in Confidential Information and its commercial relationships and
goodwill (with its Customers, Distributors, vendors, directors and employees),
and are reasonable and appropriate for these purposes.
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9. Disclosure of Agreement. Employee will disclose the existence
and terms of this Agreement to any prospective employer, partner, co-venturer,
investor or lender prior to entering into an employment, partnership or other
business relationship with such person or entity.
10. Third-Party Agreements and Rights. Employee hereby confirms
that Employee is not bound by the terms of any agreement with any previous
employer or other party which restricts in any way Employee's use or disclosure
of information or Employee's engagement in any business, except as may be
disclosed in Schedule A attached to this Agreement prior to its acceptance by
the Company. Employee has delivered to the Company true and complete copies of
any agreements listed on Schedule A. Employee represents to the Company that
Employee's execution of this Agreement, Employee's employment with the Company
and the performance of Employee's proposed duties for the Company will not
violate any obligations Employee may have to any such previous employer or other
party. In Employee's work for the Company, Employee will not disclose or make
use of any information in violation of any agreements with or rights of any such
previous employer or other party, and Employee will not bring to the premises of
the Company any copies or other tangible embodiments of non-public information
belonging to or obtained from any such previous employment or other party.
11. Injunction. Employee agrees that it would be difficult to
measure any damages caused to the Company which might result from any breach by
Employee of the promises set forth in this Agreement, and that in any event
money damages would be an inadequate remedy for any such breach. Accordingly,
Employee agrees that if Employee breaches, or proposes to breach, any portion of
this Agreement, the Company shall be entitled, in addition to all other remedies
that it may have, to an injunction or other appropriate equitable relief to
restrain any such breach without showing or proving any actual damage to the
Company.
12. Binding Effect. This Agreement will be binding upon Employee
and Employee's heirs, executors, administrators and legal representatives and
will inure to the benefit of the Company, any subsidiary of the Company, and its
and their respective successors and assigns.
13. Enforceability. If any portion or provision of this Agreement
is to any extent declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, will not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law. In the event that any provision of this
Agreement is determined by any court of competent jurisdiction to be
unenforceable by reason of excessive scope as to geographic, temporal or
functional coverage, such provision will be deemed to extend only over the
maximum geographic, temporal and functional scope as to which it may be
enforceable.
14. Entire Agreement. This Agreement constitutes the entire
agreement between the Company and Employee with respect to the subject matter
hereof, and supersedes all prior representations and agreements with respect to
such subject matter. This Agreement may not be amended, modified or waived
except by a written instrument duly executed by the person against whom
enforcement of such amendment, modification or waiver is sought. The failure of
any party to require the performance of any term or obligation of this
Agreement, or the waiver by any party of any breach of this Agreement, in any
particular case will not prevent any subsequent enforcement of such term or
obligation or to be deemed a waiver of any separate or subsequent breach.
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15. Notices. Any notices, requests, demands and other
communications provided for by this Agreement will be sufficient if in writing
and delivered in person or sent by registered or certified mail, postage
prepaid, to Employee at the last address which Employee has filed in writing
with the Company or, in the case of any notice to the Company, at its main
offices, to the attention of the undersigned officer.
16. Governing Law. The validity, interpretation, performance and
enforcement of this agreement shall be governed by the laws of the State of
Delaware, without applying the conflict of laws provisions thereof.
17. Arbitration. All disputes between Parties in connection with
arising out of the existence, validity, construction, performance and
termination of this Agreement shall be finally settled by arbitration. The
arbitration shall be held in the Dallas, Texas in accordance with the Rules of
the American Arbitration Association by one or more arbitrators appointed in
accordance with the said Rules and the award of such arbitrators shall be final
and binding upon the Parties. The non-prevailing party shall pay for all
reasonable costs and expenses incurred in connection with such dispute,
including filing and arbitrator fees as well as the reasonable costs and
expenses of opposing legal counsel.
EMPLOYEE UNDERSTANDS THAT THIS AGREEMENT AFFECTS IMPORTANT RIGHTS. EMPLOYEE HAS
READ IT CAREFULLY AND IS SATISFIED THAT EMPLOYEE UNDERSTANDS IT COMPLETELY.
NATURAL HEALTH TRENDS CORP. EMPLOYEE
By: /s/ XXXXXXXXX X. XXXXXX By: /s/ XXXXXX XXXXX
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Name: Xxxxxxxxx X. Xxxxxx Name: Xxxxxx Xxxxx
Title: CEO and President
Dated: January 3, 2007 Dated: January 3, 2007
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Schedule A
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