1
EXHIBIT 10.12
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 1st day of December, 1999, by and
between COMPLETE WELLNESS CENTERS, INC., a Delaware corporation, having its
principal office at 0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxxxx
00000 (the "Company"), and XXXXXX X. XXXXXXX, whose address is 000 Xxxxxxx Xxx,
Xxxxxxxx, Xxxxxxx 00000 ("Employee"). In consideration of the mutual covenants
and promises contained herein, the parties agree as follows:
1. EMPLOYMENT. The Company hereby employs, directly or through an
affiliated entity or third party employment services provider, Employee as its
President and Chief Operating Officer and Employee hereby accepts such
employment and agrees to perform such duties as are customarily performed by one
holding such position in other, same or similar businesses as that engaged in by
the Company and to render any such other appropriate services and duties as may
be assigned from time to time by the Company.
2. PERFORMANCE OF EMPLOYEE'S DUTIES. The Employee agrees to devote
forty (40) hours per week to perform his duties for the Company, and to render
service to the Company to the best of his ability, experience and talent. Such
duties shall be rendered at such place or places as the Company shall require in
accordance with the best interests, needs, business and opportunities of the
Company.
3. TERM OF AGREEMENT. The effective date ("Effective Date") of this
Agreement shall be the last date of execution by either Employee or Company, and
this Agreement shall continue for a period of two (2) years from the Effective
Date unless terminated earlier as provided by Paragraph 7 herein.
4. COMPENSATION.
A. BASE SALARY. The Company agrees to pay Employee and Employee
agrees to accept from the Company, in payment for Employee's services
hereunder, salary at the rate of One Hundred Fifty Thousand and no/100
Dollars ($150,000.00) per year ("Base Salary"). The Company also
agrees to pay Employee and Employee agrees to accept from the Company
up to Fifty Thousand and no/100 Dollars ($50,000) of the Base Salary
through deferred payments that shall be issued at the Company's
discretion.
B. STOCK OPTIONS. Employee shall be granted One Hundred Thousand
(100,000) options for Company Common Stock to be vested on the Effective
Date. The options will be issued from Plans currently registered with
the Securities and Exchange Commission at the closing price on the
Effective Date. In the event this agreement is terminated before the
expiration date, Employee shall be entitled to exercise options vested
at the time of termination.
C. PERFORMANCE BONUS. In any business year in which Company earns
a pretax profit, Employee shall be paid an additional bonus of Three
Percent (3%) of the pretax profit earned by Company, not to exceed Fifty
Percent (50%) of the Employee's Base Salary. Said bonus shall be paid
within ninety (90) days of the last day of each respective business year
(2000 and 2001).
D. BONUS POOL. Employee shall be entitled to participate in any
executive or employee profit sharing bonus or stock option pool or plan
established by Company.
-1-
2
5. BENEFITS.
A. EXPENSE ACCOUNT. Company shall reimburse Employee such
authorized business expenses incurred by Employee as are reasonably
connected to the performance of his duties upon presentation of receipts
or other appropriate documentation. Reimbursement shall be in accordance
with Company's normal policies regarding reimbursement, which Company
may alter or modify from time to time in its sole discretion.
B. OTHER BENEFITS. Employee shall also be entitled to such
additional benefits, if any, as are available to full-time Company
employees having similar duties and responsibilities with Company. The
Company may at its discretion from time to time reduce, modify or
eliminate benefits provided to its employees as allowed by law.
6. RIGHT TO INDEMNIFICATION. As stated in the Company's By-laws, "Each
person who was or is a party or is threatened to be made a party to or is
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "proceeding"), by reason of the fact that he,
or a person of whom he is the legal representative, is or was a director or
officer of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such proceeding is
alleged action or inaction in an official capacity or in any other capacity
while serving as director, officer, employee or agent, shall be indemnified and
held harmless by the corporation to the fullest extent permitted by the General
Corporation Law of Delaware, as amended from time to time, against all costs,
charges, expenses, liabilities and losses (including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith, and that indemnification shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
his heirs, executors and administrators; provided, however, that, except as
provided in section 6.2, the corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
that person, only if that proceeding (or part thereof) was authorized by the
Board. The right to indemnification conferred in these by-laws shall be a
contract right and shall include the right to be paid by the corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the General Corporation Law of
Delaware, as amended from time to time, requires, the payment of such expenses
incurred by a director or officer in his capacity as a director or officer (and
not in any other capacity in which service was or is rendered by that person
while a director or officer, including, without limitation, service to an
employee benefit plan) in advance of the final disposition of a proceeding shall
be made only upon delivery to the corporation of an undertaking, by or on behalf
of such director or officer, to repay all amounts so advanced, if it shall
ultimately be determined that such director or officer is not entitled to be
indemnified under these by-laws or otherwise. The corporation may, by action of
its Board, provide indemnification to employees and agents of the corporation
with the same scope and effect as the foregoing indemnification of directors and
officers."
7. DEATH OR DISABILITY OF EMPLOYEE. The death or disability of Employee
shall terminate this Agreement and except as otherwise provided herein or by
law, discharge the Company from any further liability for the compensation and
benefits provided herein. Disability shall mean such mental or physical
impairment as shall prevent Employee from completing the essential functions of
his position, with or without reasonable accommodation. . In the event of the
Employee's death, any amounts owed to Employee at the time of death will inure
to the estate of the Employee.
-2-
3
8. TERMINATION.
A. TERMINATION WITH CAUSE. Company may terminate this Agreement
immediately without notice to Employee and without further obligation
for compensation, commissions or benefits remaining due hereunder,
except as provided by law, if the Employee commits any one or more of
the following acts:
(1) Commission of a felony;
(2) Theft, dishonesty, fraud or embezzlement;
(3) Accepting or receiving any illegal or improper benefit from any
person or entity in connection with the services provided
hereunder;
(4) Willfully damaging the Company's property, business, reputation
or goodwill; or
(5) Employee's material breach of any covenant of this Agreement.
B. TERMINATION WITHOUT CAUSE. Company may terminate this
Agreement at any time without cause or reason, and without further
obligation for any compensation or benefits remaining due hereunder by
providing Employee with ninety (90) calendar days advance written notice
of termination hand-delivered or mailed by the Company to Employee's
address as found in Company's then current payroll records. Should the
Company desire that Employee leave the Company before the expiration of
the ninety (90) day notice period, it shall pay Employee as if he worked
until the expiration of the notice period, in addition to any other
severance or benefits due to Employee upon termination.
C. TERMINATION BY EMPLOYEE. Employee may terminate this Agreement
for any reason by providing the Company with ninety (90) calendar days
advance written notice of termination. At the end of this time, Company
shall have no further obligation for any compensation, commissions or
benefits remaining due hereunder. Should the Company desire that
Employee leave the Company before the expiration of the ninety (90) day
notice period, it shall pay Employee as if he worked until the
expiration of the notice period. If Employee fails to provide the
requested notice, he shall forfeit all rights to any other severance and
benefits due to Employee upon termination other than any benefits
Employee is entitled to pursuant to applicable law.
9. NON-SOLICITATION, CONFIDENTIALITY AGREEMENT AND NON-DISPARAGEMENT.
A. CONFIDENTIALITY. As a result of employment with Company,
Employee has access to confidential material and information belonging
to the Company including, without limitation, client lists, pricing
information, procedure manuals, employee records, client records, sales
and marketing techniques, computer programs, the identity of specialized
consultants and contractors, and management strategies. This
confidential information was acquired or developed by the Company at
considerable expense. It is therefore, a unique and valuable asset of
the Company and its remaining confidential is of extreme importance to
Company. Employee acknowledges the importance of keeping all information
confidential and will not during or after the term of this Agreement,
disclose any confidential information made available to or acquired by
Employee in the course of employment hereunder to any person, firm,
corporation, association or other entity for any
-3-
4
reason or purpose. This Paragraph shall survive expiration of this
Agreement and remain enforceable after termination of employment for
any reason.
B. NON-SOLICITATION. If Employee's employment is terminated by
Employee or by Company with cause, Employee agrees that he will not, for
a period of one year after termination of employment, directly or
indirectly, for himself or on behalf of any other person or entity,
solicit, interfere with, endeavor to entice away from the Company or
accept business from any Client of the Company. Employee also agrees
that he will not, for the same one (1) year period, directly or
indirectly, for himself or on behalf of any other person or entity,
solicit, interfere with or endeavor to entice away from the Company any
other employee of the Company. For purposes of this agreement, the term
"Client" shall mean any person or entity that received service of any
type from Company during the one year period immediately preceding the
last day of Employee's employment with Company. By executing this
Agreement, Employee acknowledges that a breach of this paragraph will
give rise to irreparable and continuing injury to the Company, and
further agrees that the Company or its successors and assigns may obtain
injunctive relief against the breach or threatened breach of the
provisions of this paragraph, in addition to any other legal remedies
which may be available to it. If any court refuses to enforce this
paragraph, because it is more extensive (as to time, geographic area,
scope of business or otherwise) than is necessary to protect the
business and goodwill of the Company, it is agreed between Employee and
Company that this paragraph shall be modified to the extent necessary to
permit the terms hereof to be enforced in any legal proceeding. This
Paragraph shall survive expiration of this Agreement and remain
enforceable after termination of employment for any reason.
C. NON-DISPARAGEMENT. It is understood that Employee may not
always agree with the policies, procedures and practices of Company.
Employee agrees, however, that it is Employee's duty to support the
Company and its actions and, therefore, agrees that during or after the
term of this Agreement, Employee will not criticize or make any
disparaging remarks about Company or its officers, managers, attorneys
or other employees. This Paragraph shall survive expiration of this
Agreement and remain enforceable after termination of employment for any
reason.
10. COVENANT NOT TO COMPETE.
A. During the Employment Term and for one (1) year thereafter,
Employee will not without the prior written permission of the Company in
each instance directly or indirectly carry on or participate in a
business the same as or similar to or in competition with that conducted
or engaged in by the Company or any of its subsidiaries or affiliates.
B. The term "carry on or participate in a business the same as or
similar to that conducted or engaged in by the Company or any of its
subsidiaries or affiliates" shall include the Employee, directly or
indirectly, doing any of the following listed acts, other then
carrying on or engaging in activities expressly permitted under this
Agreement:
(1) carrying on or engaging in any such business as a principal, or
solely or jointly with others as a director, officer, agent,
employee, consultant or partner, or stockholder or limited
partner owning more than five percent (5%) of the stock or
equity interests in or securities convertible into more than
five percent (5%) of the stock or equity interests in any
corporation, association or limited partnership; or
-4-
5
(2) as agent or principal carrying on or engaging in any activities
or negotiations with respect to the acquisition or disposition
of such business; or
(3) lending credit or money for the purpose of establishing or
operating any such business; or
(4) giving advice to any other person, firm, association,
corporation or other entity engaging in such business; or
(5) lending or allowing his name or reputation to be used in any
such business; or
C. In the event of a breach or threatened breach by the Employee
of the provisions of this Section 9, the Company shall be entitled to
injunctive relief against the Employee. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies
available to the Employer for such breach or threatened breach,
including without limitation the recovery of damages from the Employee.
11. RETURN OF COMPANY PROPERTY. On termination of employment, Employee
shall deliver all records, customer lists, notes, data, memoranda, and equipment
of any nature that are in Employee's possession or under his control and that
are the property of the Company or relate to the employment or to the business
of the Company.
12. COMPLETE AGREEMENT. Except as expressly identified herein, this
Agreement contains the sole agreement between the parties regarding the
employment relationship and supersedes any and all other employment agreements.
The parties acknowledge and agree that neither of them has made any
representation with respect to such matters of this Agreement or any
representations except as are specifically set forth herein, and each party
acknowledges that he or it has relied on his or its own judgment in entering
into this Agreement. Employee acknowledges that Company has written workplace
policies, procedures and guidelines which are not contracts of employment.
13. CHOICE OF LAW. This Agreement and the duties and obligations
hereunder shall be governed by and construed in accordance with the laws of the
State of Florida. The parties agree that venue for all legal actions instituted
to enforce any rights or obligations contained herein shall be in the county
containing that Company office where Employee was located or last reported.
14. BINDING EFFECT OF AGREEMENT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
successors, assigns and legal representatives.
15. INVALID PROVISION. To the extent local, state or federal law or
regulation renders any provision of this Agreement unenforceable or invalid,
that portion of the Agreement shall be stricken. The invalidity or
unenforceability of a particular provision of this Agreement, except Paragraphs
1, 2, 3, 4 and 5, shall not affect the other provisions hereto, and this
Agreement shall be construed in all respects as if such invalid or unenforceable
provisions were omitted. Should Paragraphs 1, 2, 3, 4, or 5 be found invalid or
unenforceable, the entire agreement shall be invalid and unenforceable.
16. NOTICES. All communications provided for hereunder shall be in
writing and shall be deemed to have been given when delivered in person or three
(3) days after deposit in the United States Mail, First class, certified mail,
return receipt requested, with proper postage prepaid, at the address set forth
hereinabove or at such place as may from time to time be designated in writing
by the parties.
-5-
6
17. EXHAUSTION OF REMEDIES. Before taking any legal action against
Company, or filing any charge or complaint with any governmental or
administrative agency, Employee agrees to exhaust all Company dispute resolution
procedures as exist from time to time.
18. ASSIGNMENT. This Agreement shall be construed as a contract for
personal services by Employee to the Company and shall not be assignable by
Employee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
COMPLETE WELLNESS CENTERS, INC.,
A DELAWARE CORPORATION
BY:
/s/ XXXX X. XXXXXXXXX
------------------------------------
XXXX X. XXXXXXXXX
/s/ XXXXXX X. XXXXXXXXX
------------------------------------
XXXXXX X. XXXXXXXXX
/s/ XXXXXX X. XXXXXXX, XX.
------------------------------------
XXXXXX X. XXXXXXX, XX.
/s/ E. XXXXXX XXXXXX
------------------------------------
E. XXXXXX XXXXXX
AS ITS: BOARD OF DIRECTORS
"COMPANY"
/s/ XXXXXX X. XXXXXXX
----------------------------------------
XXXXXX X. XXXXXXX
"EMPLOYEE"
-6-
