EXHIBIT 10.29
Employment Agreement
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This Employment Agreement (the "Agreement") is made effective the 1st day of
November, 1999 by and between Nutrition For Life International, Inc., a Texas
corporation (the "Company") and Xxxx Xxxxxxx ("Xxxxxxx").
In consideration of the mutual covenants, promises and agreements herein
contained, the Company and Mitcham hereby covenant, promise and agree to and
with each other as follows:
1. Employment. The Company shall employ Mitcham and Mitcham shall be
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employed by the Company upon the terms and conditions set forth in this
Agreement.
2. Positions and Duties of Employment. Mitcham shall be required to devote
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her best efforts on a full-time basis to the furtherance of her managerial
duties with the Company as the Company's Executive Vice President. While
serving in these corporate capacities, Mitcham shall have the responsibilities,
duties, obligations, rights, benefits and requisite authority as is customary
for her positions and as may be determined by the Company's Board of Directors
(the "Board") and as set forth in the Bylaws of the Company.
Mitcham understands that her employment as Executive Vice President of the
Company involves a high degree of trust and confidence, that she is employed for
the purpose of furthering the Company's reputation and improving the Company's
operations and profitability, and that in executing this Agreement she
undertakes obligations set forth herein to accomplish such objectives. Mitcham
agrees that she shall serve the Company fully, diligently and competently, and
to the best of her ability. Mitcham certifies that she fully understands her
right to discuss this Agreement with her private attorney, that to the extent,
if any, she desires, she has availed herself of this right, that she has
carefully read and fully understands this entire Agreement, and that she is
voluntarily entering into this Agreement.
3. Term. Except as otherwise provided in this Agreement, the term of this
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Agreement (the "Term") shall be for a period of one year commencing November 1,
1999 and shall automatically renew for two successive periods of one year each
unless either party gives notice of the termination of the Agreement to the
other not fewer than 30 days prior to the expiration of the applicable yearly
period.
4. Compensation. Mitcham shall receive the following as compensation:
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(a) Mitcham shall receive a monthly salary of $23,500 for each full month
of her employment by the Company pursuant to this Agreement, payable in
accordance with the Company's customary payroll practices.
(b) In addition to her salary, Mitcham shall be entitled to a bonus,
payable within 105 days of the end of each annual period of the Term, based upon
the Company meeting certain pre-tax income levels defined below (the "Bonus").
Pre-tax income shall be determined in accordance with generally accepted
accounting principles. Provided, that the operations of
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any companies acquired by the Company after the commencement of the Term shall
not be included in the calculation of pre-tax income. In the event of any
dispute over the amount of pre-tax income, a final determination shall be made
by Xxxxx Xxxxxxxx LLP or another independent certified public accounting firm
selected by the Company. No Bonus shall be payable unless the Company's annual
pre-tax income is $3,000,000 or more. The amount of the Bonus shall be 5% of the
first annual pre-tax income of the Company, which is between $3,000,000 and
$5,000,000; 4% of the annual pre-tax income of the Company which is between
$5,000,000 and $10,000,000; and 3% of the annual pre-tax income of the Company
which is between $10,000,000 and $20,000,000. No Bonus shall be payable for any
annual pre-tax income of the Company in excess of $20,000,000.
(c) The Company shall provide Mitcham with participation in any group
plans or agreements maintained by the Company relating to health insurance or
other related benefits in accordance with their respective terms.
(d) Mitcham shall be entitled to leaves for vacations for periods
reasonably determined by the Board. In addition, Mitcham shall be entitled to
reasonable absences for attendance at business seminars and conventions.
(e) Any payment which the Company shall make to Mitcham pursuant to
this Agreement shall be reduced by standard withholding and other authorized
deductions.
(f) During the term of her employment, Mitcham shall be reimbursed
for reasonable expenses incurred by her for the benefit of the Company. Any
direct payment or reimbursement of expenses shall be made only upon presentation
of an itemized accounting conforming in form and content to standards prescribed
by the Internal Revenue Service relative to the substantiation of the
deductibility of business expenses.
5. Life Insurance. The Company may, but shall not be obligated to,
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apply for and procure as owner and for its own benefit or the benefit of any
lender of the Company, insurance on Mitcham's life, in any amount and form or
forms that the Company may choose. Mitcham shall, at the Company's request,
submit to all medical examinations, supply all information and execute all
documents required by the insurance company or companies to whom the Company has
applied for the insurance.
6. Corporate Data and Antisolicitation. Upon the termination of
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Mitcham's employment under this Agreement for any reason, Mitcham shall return
to the Company all data and information, whether written, computer, magnetic,
electronic or in any other physical or tangible form, relating to the business
of the Company or any of its affiliates that Mitcham obtained during the time of
her employment. During the term of this Agreement or for a period of one year
thereafter, Mitcham shall neither disclose to any other person or entity, nor
use for her own personal benefit, any information obtained during her employment
by the Company that is not otherwise publicly known, relating to the financial
affairs, distributor lists or the business operations of the Company or any of
its subsidiaries or affiliates. During the term of this Agreement or for a
period of one year thereafter, Mitcham will not influence or attempt to
influence distributors of the company or any of its present or future
subsidiaries or
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affiliates, either directly or indirectly, to divert their business to any
individual, partnership, firm, corporation or other entity then in competition
with the business of the Company or any subsidiary or affiliate of the Company,
nor will she solicit any of the Company's employees who earned annually $25,000
or more as a Company employee during the last six months of her or her own
employment to work for any individual, partnership, firm, corporation or other
entity then in competition with the business of the Company or any subsidiary or
affiliate of the Company.
7. Termination.
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(a) The Company shall have the right at any time to terminate
Mitcham's employment under this Agreement without further liability or
obligation pursuant to this Agreement upon the occurrence of any of the
following events:
(i) By mutual written agreement, signed by both parties; or
(ii) The death of Mitcham; or
(iii) If the Company determines in good faith that the Disability of
Mitcham has occurred (pursuant to the definition of Disability set
forth below), it may give to Mitcham written notice in accordance with
Section 13 of its intention to terminate Mitcham's employment. In such
event, Mitcham's employment with the Company shall terminate effective
upon receipt of such notice by Mitcham, provided that, upon receipt,
Mitcham shall not have returned to full-time performance of her
duties. For purposes of this Agreement, "Disability" shall mean a
physical or mental impairment which substantially limits a major life
activity of Mitcham which renders Mitcham unable to perform the
essential functions of her position, even with reasonable
accommodation which does not impose an undue hardship on the Company.
The Company reserves the right, in good faith, to make the
determination of Disability under this Agreement based upon
information supplied by Mitcham and/or her medical personnel as well
as information from medical personnel (or others) selected by the
Company or its insurers; or
(iv) Mitcham is convicted of any crime constituting a felony under
the law of the United States or any State; or
(v) A "Material Breach" of this Agreement as determined by the
Board. The exercise of the right of the Company to terminate this
Agreement shall not abrogate the rights and remedies of the Company in
respect of the breach giving rise to such termination. For purposes of
this subsection, "Material Breach" shall mean that the Company, acting
in good faith based upon the information then known to the Company,
determines that Mitcham has engaged or committed: willful misconduct;
gross negligence; theft, fraud or other illegal conduct; refusal or
unwillingness to perform her duties; sexual harassment; violation of
any fiduciary duties; violation of any duty of loyalty; or a material
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breach of any term of this Agreement. The "Material Breach" shall be
specified in a notice of termination to be delivered by the Company no
later than the date as of which the termination is effective.
(b) If Mitcham's employment is terminated by the Company for any
reason other than those set forth in sections 7(a)(i) through 7(a)(v) above,
then the Company shall pay "Termination Pay" to Mitcham in full settlement of
any and all claims of Mitcham arising out of or in connection with her
employment by the Company which shall be evidenced by a general release and
waiver of claims against the Company and its affiliates in a form reasonably
acceptable to the Company executed by Mitcham. The "Termination Pay" shall
consist of (i) twelve months' salary, which shall be paid in six monthly
installments of $47,000 each, commencing on the first day of the month after the
month in which termination occurred and continuing on the first day of each
month thereafter until all six installments have been paid; and (ii) the product
of the Bonus to which Mitcham would be entitled, multiplied by a fraction having
a numerator equal to the number of days in the annual period preceding the date
of termination and a denominator equal to 365, which shall be paid to Mitcham no
later than 90 days after the end of the annual period in which termination
occurred. Such payments shall be made in accordance with the Company's customary
payroll practices and shall be subject to applicable withholding and payroll
deductions.
(c) If during the term of this Agreement, the Company effects a
merger or acquisition in which it is not the surviving entity or is a party to a
stock exchange or other form of corporate reorganization in which it becomes a
wholly-owned subsidiary of another entity (unless such entity is a holding
company and the shareholders of the Company have approved the reorganization)
and Mitcham's employment is thereafter terminated by the Company notwithstanding
that no "Material Breach" has occurred, then Mitcham shall be entitled to
"Termination Pay."
(d) For purposes of this Section 7, voluntary termination of
employment by Mitcham as a result of a material change by the Company in
Mitcham's job responsibilities shall be deemed to be termination by the Company
without a "Material Breach" and Mitcham shall be entitled to "Termination Pay".
(e) If the Company provides notice of termination to Mitcham prior to
any renewal period specified in Section 3 for any reason other than those set
forth in Sections 7(a)(i) through 7(a)(v) above, then Mitcham shall be entitled
to "Termination Pay."
(f) Mitcham shall have the right to terminate this Agreement in the
event of a default by the Company of any material provision of this Agreement
but only if Mitcham shall have first given written notice of the default to the
Company and if within thirty days after receipt of that notice the Company has
not cured that default. Upon termination neither Mitcham nor the Company shall
have any further obligations under any of the provisions of this Agreement
except that Mitcham shall be entitled to "Termination Pay".
(g) Mitcham agrees that the payments contemplated by this Agreement
shall constitute the exclusive and sole remedy for any termination of her
employment and Mitcham
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covenants not to assert or pursue any other remedies, at law or in equity, with
respect to any termination of employment.
8. Remedies. If there is a breach or threatened breach of the
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provisions of Section 2 or 6 of this Agreement, the Company shall be entitled to
an injunction restraining Mitcham from such breach. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies for such
breach or threatened breach.
9. Severability. It is the clear intention of the parties to this
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Agreement that no term, provision or clause of this Agreement shall be deemed to
be invalid, illegal or unenforceable in any respect, unless such term, provision
or clause cannot be otherwise construed, interpreted, or modified to give effect
to the intent of the parties and to be valid, legal or enforceable. In the event
that such a term, provision, or clause cannot be so construed, interpreted or
modified, the validity, legality and enforceability of the remaining provisions
contained herein and other application(s) thereof shall not in any way be
affected or impaired thereby and shall remain in full force and effect.
10. Waiver of Breach. The waiver by the Company or Mitcham of the
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breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by that party.
11. Entire Agreement. This document contains the entire agreement between
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the parties, supersedes all prior oral agreements, if any, and may not be
changed orally, but only by agreement in writing signed by the parties.
12. Governing Law. This Agreement, its validity, interpretation and
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enforcement, shall be governed by the laws of the State of Texas.
13. Notices. Any notice pursuant to this Agreement shall be validly
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given or served if that notice is made in writing and delivered personally or
sent by certified mail, return receipt requested, postage prepaid, to the
following addresses:
If to Company: Nutrition For Life International, Inc.
0000 Xxxxxx
Xxxxxxx, XX 00000
If to Mitcham: To the address for Mitcham set forth below her
signature.
All notices so given shall be deemed effective upon receipt. Either party, by
notice so given, may change the address to which her or its future notices shall
be sent.
14. Assignment and Binding Effect.
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(a) This Agreement shall be binding upon Mitcham and the Company and
shall benefit the Company and its successors and assigns.
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(b) This Agreement shall not be assignable by Mitcham.
15. Headings. The headings in this Agreement are for convenience only;
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they form no part of this Agreement and shall not affect its interpretation.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
the day and year first above written.
NUTRITION FOR LIFE INTERNATIONAL, INC.
By:_______________________________
Authorized Officer
__________________________________
Xxxx Xxxxxxx, Individually
Address for Notice:
10618 Great Plains
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(Street Address)
Xxxxxxx, Xxxxx 00000
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(City, State and Zip Code)
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