EMPLOYMENT AGREEMENT
AGREEMENT made the 26 day of June, 1996 (effective, however, only on the
Effective Date below set forth) between HEALTH WELLNESS NATIONWIDE CORP. (the
"Company"), a Delaware corporation having an office at 0000 Xxxx Xxxxxx Xxxx,
Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxx 00000, and XXXX XXXXX (the "Employee"),
residing at 0000 X.X. Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000, and Natural
Health Trends Corp., a Florida Corporation having an office at 0000 Xxxx Xxxxxx
Xxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxx 00000 ("NHTC").
W I T N E S S E T H:
The Employee is president and sole Shareholder of Medical Science
Consultants, Inc., Diagnostic Sciences, Inc., Managenet, Inc., KBM Consultants,
Inc., all Florida corporations (collectively, "Sellers"). The Company and Seller
are entering into an agreement of even date (the "Agreement and Plan of
Reorganization") pursuant to which the Company will acquire the business and
assets of Sellers. The Company desires to employ the Employee following such
acquisition, and the Employee is willing to be so employed, upon the terms and
conditions hereinafter set forth. The Company is a wholly-owned subsidiary of
NHTC and NHTC wishes to guarantee the obligations of the Company hereunder.
NOW, THEREFORE, with the foregoing recitals deemed incorporated hereinafter
by reference and mae a part hereof, the parties agree as follows:
1. Employment.
1.1 Term. The Company employs the Employee, and the Employee accepts
employment with the Company, in the position and with the duties hereinafter set
forth, for a term of three (3) years commencing on the Effective Date (as
defined in paragraph 1.02 below) unless sooner terminated as hereinbelow
provided.
1.2 Effective Date. This Agreement shall be effective only if and when the
Closing under the Agreement and Plan of Reorganization (as the term "Closing is
therein defined) is consummated, and, in such event, the "Effective Date" shall
be deemed to be June, 1996.
2. Duties.
2.1 General. The Employee shall be Regional Director of the Company and in
this connection shall manage a clinic specializing in complementary medicine
located at 0000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxx Xxxxxxx Xxxxx, Xxxxxxx
("Clinic"). Employee shall also perform administrative, executive services and
advisory medicine services for the Company including managing and developing
additional clinics. Employee shall perform such other services consistent with
her position (including, without limitation, services for parents, subsidiaries,
divisions and affiliates of the Company) as may from time to time be assigned to
her by the Company's Board of Directors or executive officers.
2.2 Performance. During the term of this Agreement, the Employee shall
devote her full time, best efforts and attention to the business, operations and
affairs of the Company and the performance of her duties hereunder and, without
the Company's consent, shall not engage in any other business activities except
as set forth herein.
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2.3 Personal Liability. During the term of the Agreement, the Employee
shall not have any personal liability for payroll taxes for the Company or any
of its operating divisions the Company shall indemnify and hold her harmless for
same.
2.4 Employee's Representations. Employee represents and warrants to and
agrees with Company that:
(a) Employee is the sole shareholder of four
corporations, referred to as the Seller in the Agreement and Plan of
Reorganization. The Seller through the Employee operates the Clinic.
Neither Employee nor any of her staff has been disciplined, suspended
or remanded as a health care practitioner, nor barred from medical
practice, nor have had any legal actions brought against any of them
for damages resulting from services provided at the Clinic except for
Xxxxxx X. Xxxxxxx, Xx., M.D.
(b) Neither the execution nor performance by the
Employee of this Agreement is prohibited by or constitutes or will
constitute, directly or indirectly, a breach or violation of, or will
be adversely affected by, any written or other agreement to which
Employee is or has been a party.
(c) Except as permitted hereunder or pursuant to the
Agreement and Plan of Reorganization, neither Employee nor any business
or entity in which she has any interest or from which she receives any
payments has, directly or indirectly, any interest of any kind in or is
entitled to receive, and neither the Employee nor any such business or
entity shall accept, from any person, any payments of any kind on
account of any services performed by the Employee therefore subsequent
to the Effective Date. Any revenues derived by Employee from
publications, articles, books and videos not relating to the Company
are excluded. In addition to any of its other rights and remedies,
except as provided in 2.4(c), the Company shall be entitled to receive
(and shall also have the right to withhold from any payments to
Employee under this Agreement) all amounts paid or payable to Employee
or any such other business or entity in breach or violation of this
paragraph.
(d) Employee shall indemnify and hold the Company
free and harmless from and against and shall reimburse it for any and
all liabilities, damages, losses,judgments, costs and expenses
(including reasonable counsel fees and other reasonable out-of-pocket
expenses) arising out of or resulting from any claim or action by any
third party against the Company which constitutes, and the provisions
of this 2.3(c) are limited to, a breach or default by the Employee of
or under 2.4.
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3. Compensation and Related Matters.
3.1 Base Salary. (a) As compensation for her services hereunder, Employee
shall be paid a salary equal to her present yearly salary of $100,000, provided
that the Clinic's yearly revenues are not less than $710,000.00 per annum. In
the event the Clinic's revenues are less than $355,000.00 in any six-month
period (either January 1 to June 30 or July 1 to December 31), Employee's salary
shall be adjusted for the following six-month period as follows: Employee's
current salary multiplied by a fraction, the numerator of which shall be gross
revenues for the applicable six-month period for the Clinic and the denominator
of which is $355,000.
This calculation shall be determined by the Company's accountant and base
salary will represent a percentage of overall gross revenues. Such calculation
shall be made every six months and Employee's salary will be adjusted for the
following six-month period accordingly. If gross revenues of the Clinic are in
excess of $710,000 per year, Employee shall receive five percent (5%) of such
excess. Such amount shall be determined by the Company's regularly employed
accountant and paid no later than April 1 of the succeeding year.
(b) Except as provided herein, the Company will have no obligation to
retain any other individual after the Closing and nothing contained herein shall
be deemed to create third-party beneficiary rights of any nature whatsoever on
behalf of the Seller's employees other than those employees the Company chooses
in its discretion to retain. However, with respect to employees of the Clinic,
for as long as Employee serves as its Director (or serves in a similar
capacity), Employee shall have authority as to the staffing and personnel needs
of the Clinic, subject to the consent of the Company, which consent shall not be
unreasonably withheld.
(c) The company agrees that Employee shall be entitled to a bonus or other
incentive compensation, as determined by the Board of Directors of the Company,
based upon Employee's contributions to the growth and development of the
business of the Company, including without limitation, the development of new
alternative medical clinics.
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3.2 Expenses. The Company shall pay or reimburse the Employee for all
pre-approved travel, hotel, entertainment and other business expenses incurred
in the performance of Employee's duties upon submission of appropriate vouchers
and other supporting data.
3.3 Benefits. Employee shall be entitled to (i) participate in all general
pension, profit-sharing, bonus, life, medical and other insurance, disability
and other employee benefit plans and programs at any time in effect for
executive employees of Company, including the Natural Health Trend Corporation's
Executive Level Option Plan under which she will receive a minimum of 2,000
options per year, provided, however, that nothing herein shall obligate the
Company to establish or maintain any employee benefit plan or program, whether
of the type referred to in this clause (i) or otherwise, and (ii) holidays,
vacations, and automobile reimbursement in accordance with the Company's policy
for executive employees, and the Company will pay for a life insurance policy on
the life of Employee in the amount of $250,000 provided Employee is insurable at
commercially acceptable rates (the beneficiary of which shall be designated by
Employee).
4. Termination of Employment; Disability.
4.1 Termination. (a) Employee's employment may only be terminated either by
the Company for any of the reasons or for causes set forth in 4.1(b) below, or
by Employee voluntarily, Employee's compensation under this Agreement shall end
on the effective date of such termination and the Company shall have no
obligation to pay Employee the payment provided for in subparagraph (a) of 3.1
above. In the event of Employee's death, the salary payable hereunder shall be
paid to Employee's estate throughout the term of this Agreement.
(b) The "reasons or causes" for Company's termination of Employee's
employment referred to in 4.1(a) above shall mean and include only the
following, provided the Employee is given written notice thereof:
(i) theft or embezzlement by Employee from,
or common law fraud committed by Employee against,the Company;
(ii) commission by the Employee of any act
which, if successfully prosecuted by the appropriate
authorities, would constitute a felony under state or federal
law;
(iii) material breach by the Employee of
any of her obligations under paragraphs 5.1 through 5.3 below;
(iv) material breach by the Employee of any
other obligation under this Agreement not cured within ten
days after written notice thereof from the Company to the
Employee;
(v) material breach of representation and
warranty under the Agreement and Plan of Reorganization.
If Employee does not notify Company in writing within 30 days after receipt
of the aforesaid written notice of the reason or cause for termination that the
Employee disputes the Company's determination of such reason or cause, the
Company's determination shall be final and binding on the Employee.
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4.2 Disability. Should the Employee, by reason of illness, mental or
physical incapacity or other disability, be unable to perform her regular duties
under this Agreement for any continuous period of three months or for
non-continuous periods aggregating one year, in either such event, the Company
may terminate the Employee's employment at any time thereafter upon ten days'
prior written notice to the Employee as provided in 4.1(b) above unless prior to
the expiration of such ten-day period the Employee returns to full-time work and
continues same for a period of at least three months. Any payments to Employee
under any disability insurance or plan maintained by the Company shall be
applied against and shall reduce the compensation payable by the Company to
Employee under this Agreement.
5. Confidential Information; Non-Competition; Discoveries. 5.1 Confidential
Information. The Employee shall not, at any time during or following termination
or expiration of the term of this Agreement, directly or indirectly, disclose,
publish or divulge to any person (except in the regular course of the Company's
business), or appropriate, use or cause, permit or induce any person to
appropriate use, any proprietary, secret or confidential information of the
Company including, without limitation, knowledge or information relating to its
discoveries, inventions, copyrights, trade secrets, business methods, the names
or requirements of its customers or the prices, credit or other terms extended
to its customers, all of which the Employee agrees are and will be of great
value to the Company and shall at all times be kept confidential. Upon
termination or expiration of this Agreement, the Employee shall promptly deliver
or return to the Company all materials of a proprietary, secret or confidential
nature relating to the Company together with any other property of the Company
which may have theretofore been delivered to or may then be in possession of the
Employee.
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5.2 Non-Competition. During the term of her employment and for three-year
period after termination of her employment, the Employee shall not, without the
prior consent of the Company in each instance, directly or indirectly, in any
manner or capacity, whether for herself or any other person and whether as
proprietor, principal, owner, shareholder, partner, investor, director, officer,
employee, representative, distributor, consultant, independent contractor or
otherwise, engage or have any interest in any entity which is engaged in any
business or activity which competes, directly or indirectly, with any business
or activity then or theretofore conducted or engaged in by the Company including
any existing business within a radius of 10 miles from a Clinic or a business
which the Company then operates at the time of Employee's termination.
5.3 Discoveries, Etc. The Employee shall promptly disclose to the Company,
or its nominee, any and all, and all knowledge of, designs, inventions,
discoveries and improvements conceived or made by the Employee during the term
of this Agreement and related to the business or activities of the Company, and
without further compensation, hereby assigns and agrees to execute any and all
instruments of assignment hereafter necessary in order to assign all of his
interests therein to the Company or its nominee. Whenever requested to do so by
the Company, the Employee shall execute any and all applications, assignments
and other instruments and documents which the Company may deem necessary to
apply for and obtain letters patent in the Untied States or any foreign country
or otherwise to protect the Company's interests therein.
5.4 Reasonableness. The Employee agrees that each of the provisions of this
Section 5 is reasonable and necessary for the protection of the Company; that
each such provision is and is tended to be divisible; that if any such provision
(including any sentence, clause or part) shall be held contrary to law or
invalid or unenforceable in any respect in any jurisdiction, or as to any one or
more periods of time, areas or business activities, or any part thereof, the
remaining provisions shall not be affected but shall remain in full force and
effect as to the other and remaining parts; and that any invalid or
unenforceable provision shall be deemed, without further action on the part of
the parties hereto, modified, amended and limited to the extent necessary to
render the same valid and enforceable in such jurisdiction. The Employee further
recognizes and agrees that any violation of any of her agreements in this
Section 5 would cause such damage or injury to the Company as would be
irreparable and the exact amount of which would be impossible to ascertain and
that, for such reason, among others, the Company shall be entitled, as a matter
of course, to injunctive relief from any court of competent jurisdiction
restraining any further violation. Such right to injunctive relief shall be
cumulative and in addition to, and not in limitation of, all other rights and
remedies which the Company may possess.
5.5 Survival. The provisions of this Section 5 shall survive the expiration
or termination of this Agreement for any reason, but not to exceed the time set
forth in paragraph 5.2 herein.
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6. Miscellaneous.
6.1 Notices. All notices under this Agreement shall be in writing and shall
be deemed to have been duly given if personally delivered against receipt or it
mailed by first class registered or certified mail, return receipt requested,
addressed to the Company, attention: Chairman, President or Secretary, and to
the Employee, at their respective addresses set forth on the first page of this
Agreement, or to such other person or address as may be designated by like
notice hereunder. Any such notice shall be deemed to have been given on the day
delivered, if personally delivered, or on day receipted for, if mailed.
6.2 Parties in Interest. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
heirs, legal representatives, successors and assigns, but no other person shall
acquire or have any rights under or by virtue of this Agreement, and the
obligations of the Employee under this Agreement may not be assigned or
delegated.
6.3 Governing Law; Severability. This Agreement shall be governed by and
construed and enforced in accordance with the laws and decisions of the State of
Florida applicable to contracts made and to be performed therein without giving
effect to the principles of conflict of laws. In addition to the provisions of
paragraph 5.4 above, the invalidity or unenforceability of any other provision
of this Agreement, or the application thereof to any person or circumstance, in
any jurisdiction shall in no way impair, affect or prejudice the balance of this
Agreement, which shall remain in full force and effect, or the application
thereof to other persons and circumstances.
6.4 Entire Agreement; Modification; Waiver. This Agreement contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof and supersedes all prior negotiations and oral
understandings, if any. Neither this Agreement nor any of its provisions may be
modified, amended, waived, discharged or terminated, in whole or in part, except
in writing signed by the party to be charged. No wavier of any such provision or
any breach of or default under this Agreement shall be deemed or shall
constitute a waiver of any other provisions, breach or default.
7. Guaranty of NHTC. All of the obligations of the Company hereunder are
guaranteed by NHTC which owns all of the issued and outstanding shares of the
Company.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
HEALTH WELLNESS NATIONWIDE CORP.
By: __________________________
EMPLOYEE
-----------------------------
Xxxx Xxxxx
NATURAL HEALTH TRENDS CORP.
By: __________________________
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