EXHIBIT 10.32
CONSULTING AGREEMENT
(▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇)
This Consulting Agreement (this "Agreement") is entered into effective
as of March 1, 2006 (the "Effective Date"), by and between Performance Health
Technologies, Inc., a Delaware corporation ("Company"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
("CONSULTANT").
WHEREAS, Company is engaged in the business of designing, developing,
manufacturing, and marketing health care rehabilitation products;
WHEREAS, Company has heretofore engaged Consultant as an employee
pursuant to the terms of that certain Employment Agreement effective January 1,
2005, between Consultant and Employee (the "Employment Agreement"), and pursuant
to the Employment Agreement Company is authorized to tender this Consulting
Agreement and upon such tender the Employment Agreement is terminated subject to
certain continuing obligations as provided therein; and
WHEREAS, Company desires to retain the services of Consultant in a
consulting capacity appropriate to his knowledge and experience as provided in
this Agreement and Consultant desires to provide his services in a consulting
capacity as provided in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
1. SERVICES. Company agrees to engage Consultant and Consultant agrees
to accept engagement by Company to perform consulting services and duties (the
"Services and Duties") commensurate to Consultant's compensation under this
Agreement and otherwise as the Board of Directors of Company from time to time
requires and requests as necessary and useful to Company. The Services will
generally be in the technology and product innovation and design areas but
otherwise as Consultant and Company mutually agree.
2. TERM. The term of this Agreement shall commence on the Effective
Date and shall continue until the earlier of (i) two years after the Effective
Date, or (ii) termination in accordance with Section 6. The
term of this Agreement is referred to herein as the "Consulting TERM."
3. RELATIONSHIP.
(a) INDEPENDENT CONTRACTOR. Consultant shall be and at all
times remain an independent contractor for Company, with control over the
accomplishment of the Services. Consultant will, at all times, conduct his
business in his own name and as an independent contractor and not as an
employee, partner, or joint venturer of or with Company. Consultant shall have
no authority to bind Company in any way. Consultant will not at any time make
any representation, either orally or in writing, that he is an employee,
partner, or joint venturer of or with Company or that he has authority to bind
Company. Consultant understands that he has no proprietary rights to the name
"Performance Health Technologies" or the names of any of its products, nor to
any combination of such names.
-1-
(b) BENEFITS; TAXES. Consultant shall not be an employee or
agent of Company; shall not be entitled to participate in or receive benefits
under any Company programs maintained for Company's employees (including,
without limitation, life, medical, and disability benefits, pension, profit
sharing, or other retirement plans or other fringe benefits); and shall not be
entitled to any direct or indirect compensation or remuneration of any kind from
Company. Consultant assumes full responsibility for the payment of all income
taxes, social security, and other payroll taxes for his compensation under this
Agreement.
4. SCHEDULE; MANNER AND MEANS. Unless otherwise agreed in writing
executed by Consultant and Company, for the first six months of the Consulting
Term, Consultant will devote 100% of his time, attention, energies and business
efforts as are reasonably necessary to perform the Services; during the next six
months of the Consulting Term, Consultant will devote 75% of his time,
attention, energies and business efforts as are reasonably necessary to perform
the Services; and during the final 12 months of the Consulting Term, Consultant
will devote 50% of his time, attention, energies and business efforts as are
reasonably necessary to perform the Services. Consultant's obligation under this
Agreement is to complete the Services. Consultant has no obligation to work any
particular hours or days or any particular number of hours or days and Company
agrees that it will have no right to control or direct the details, manner, or
means by which Consultant accomplishes the results of the Services.
5. COMPENSATION. In full compensation ("Compensation") for the services
under this Agreement, Consultant will be paid 50% of his Base Salary for the
first six months of the Consulting Term, 37.5% of his Base Salary for the next
six months of the Consulting Term, and 50% of his Base Salary during the final
12 months of the Consulting Term. As used in this Agreement, "Base Salary" shall
mean the annual Base Salary as provided in the Employment Agreement immediately
prior to the date of the Conversion Option. For purposes of illustration, if
immediately prior to the date of the Conversion Option the Base Salary is
$162,000, Consultant would be paid $81,000 for first six months of the
Consulting Term, $60,750 during the next six months of the Consulting Term, and
$81,000 during the final 12 months of the Consulting Term, for an aggregate
compensation of $222,750 over the Consulting Term. The Compensation shall be
paid monthly in arrears.
6. TERMINATION OF AGREEMENT.
(a) FOR DUE CAUSE. Nothing herein shall prevent Company from
terminating Consultant, without prior notice, for Due Cause, in which event
Consultant shall be entitled to receive his Compensation until the date of
termination and thereafter Compensation shall cease. The term "Due Cause" shall
mean:
(i) Consultant has committed a material breach of
this Agreement, a misappropriation of funds, or other willful
serious act against Company or any of its Affiliates (as
hereinafter defined) intending to enrich himself at the
expense of Company or any of its Affiliates or has been
convicted of a felony,
-2-
(ii) Consultant has engaged in conduct that has
caused demonstrable and serious injury, monetary or otherwise,
to Company or any of its Affiliates as evidenced by a binding
and final judgment, order, or decree of a court or
administrative agency of competent jurisdiction in effect
after exhaustion of all rights of appeal of the action, suit,
or proceeding, whether civil, criminal, administrative, or
investigative,
(iii) Consultant, in performing the Services, has
been guilty of willful gross neglect or willful gross
misconduct, resulting in either case in material harm to
Company or any of its Affiliates, or
(iv) Consultant has refused to perform the Services
or any other obligation under this Agreement, and after
receiving notice to such effect from the Board of Directors
Consultant fails to cure the existing problem within 30 days.
For purposes of this Agreement, "Affiliate" shall mean any individual or any
corporation, partnership, association, limited liability company, or other
entity that directly or indirectly through one or more intermediary's controls,
or is controlled by, or is under common control with Company.
(b) UPON DEATH. In the event of the death of Consultant, this
Agreement shall terminate on the date of death and the estate of Consultant
shall be entitled to receive the Compensation to the date of death and
thereafter Compensation shall cease.
(c) UPON DISABILITY. In the event Consultant suffers a
"Disability" (as hereinafter defined), this Agreement shall terminate on "the
date on which the Disability occurs" (as hereinafter defined) and Consultant
shall be entitled to Compensation until the date on which the Disability occurs
and thereafter Compensation shall cease. For purposes of this Agreement,
"Disability" shall mean the inability or incapacity of Consultant for three
months to perform the Services under this Agreement and "the date on which the
Disability occurs" shall mean the first day following such three-month period.
Such inability or incapacity shall be documented to the reasonable satisfaction
of the Board of Directors by appropriate correspondence from registered
physicians reasonably satisfactory to the Board of Directors.
(d) VOLUNTARY TERMINATION. Consultant may voluntarily
terminate his engagement under this Agreement at any time by providing at least
ninety (90) days' prior written notice to Company. In such event, Consultant
shall be entitled to Compensation until the date of termination and thereafter
Compensation shall cease.
(e) WITHOUT DUE CAUSE. Anything in this Agreement to the
contrary notwithstanding, this Agreement and Consultant's engagement hereunder
may be terminated by Company without Due Cause by providing Consultant with
written notice of such termination. In such event, Consultant shall be entitled
to receive Compensation until the date of termination and thereafter until the
end of the Consulting Term in effect immediately before the termination under
this Section 6(e).
-3-
7. ACKNOWLEDGEMENTS BY CONSULTANT. Consultant acknowledges that: (a)
the Services to be performed by him under this Agreement are of a special,
unique, and intellectual character; (b) Company's business is national in scope
and its services are marketed throughout the United States; and (c) Company
competes with other businesses that are or could be located in any part of the
United States. Consultant further acknowledges and agrees the terms of Sections
8, 9, and 10 are fair and reasonable and shall survive and continue according to
their terms notwithstanding the expiration, termination, or cancellation of this
Agreement.
8. NON-COMPETE AND NON-SOLICITATION COVENANTS OF CONSULTANT.
(a) COVENANTS. During the Consulting Term and during the
Post-Consulting Period (defined below), Consultant covenants that he will not,
directly or indirectly:
(i) engage or invest in, own, manage, operate,
finance, control, or participate in the ownership, management,
operation, financing, or control of, be employed by,
associated with, or in any manner connected with, lend
Consultant's name or any similar name to, lend Consultant's
credit to, or render services or advice to, any business whose
products, services, or activities compete in whole or in part
with the products, services, or activities of Company anywhere
within the Applicable Geographic Area (as hereinafter
defined); provided, however, that Consultant may purchase or
otherwise acquire less than five percent of any class of
securities of any enterprise (but without otherwise
participating in the activities of such enterprise) if such
securities are listed on any national or regional securities
exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934;
(ii) whether for Consultant's own account or for the
account of any other person, solicit business of the same or
similar type being carried on by Company, from any person
known by Consultant to be a customer of Company, whether or
not Consultant had personal contact with such person during
and by reason of Consultant's employment or engagement with
Company; or
(iii) whether for Consultant's own account or the
account of any other person, (A) solicit, employ, or otherwise
engage as an employee, independent contractor, or otherwise,
any person who is an employee of Company at any time during
the Consulting Term or in any manner induce or attempt to
induce any employee of Company to terminate his or her
employment with Company; or (B) interfere with Company's
relationship with any person, including any person who at any
time during the Consulting Term was an employee, contractor,
supplier, or customer of Company.
-4-
(b) POST-CONSULTING PERIOD. For purposes of this Section 8,
the term "Post-Consulting Period" means the period that ends one year after the
last to occur of (i) the end of the Employment Term under the Employment
Agreement; (ii) the end of the Consulting Term, or (iii) the final payment of
any compensation due under either this Agreement or the Employment Agreement.
(c) APPLICABLE GEOGRAPHIC AREA. For purposes of this Section
8, the term "Applicable Geographic Area" means the United States.
(d) REFORMATION. If any covenant in this Section 8 is held to
be unreasonable, arbitrary, or against public policy, such covenant will be
considered to be divisible with respect to scope, time, and geographic area, and
such lesser scope, time, or geographic area, or all of them, as a court of
competent jurisdiction may determine to be reasonable, not arbitrary, and not
against public policy, will be effective, binding, and enforceable against
Consultant.
(e) FUTURE EMPLOYMENT. Consultant will, while the covenant
under this Section 8 is in effect, give notice to Company, within ten days after
accepting any other employment or engagement (as an employee, consultant,
independent contractor, or otherwise), of the identity of Consultant's employer.
Company may notify such employer that Consultant is bound by this Agreement and,
at Company's election, furnish such employer with a copy of this Agreement or
relevant portions thereof.
9. PROPERTY RIGHTS. Consultant agrees promptly to disclose to Company
any and all ideas, concepts, discoveries, inventions, developments, original
works of authorship, software programs, software and systems documentation,
trade secrets, technical data, and know-how that are conceived, devised,
invented, developed, or reduced to practice or tangible medium by Consultant,
under Consultant's direction, or jointly with others during any period that
Consultant is employed or engaged by Company (whether or not during normal
working hours or on the premises of Company) which relate, directly or
indirectly, to the business of Company and arise out of Consultant's engagement
by Company (hereinafter "Property and Rights"). Consultant hereby assigns (and
agrees to assign in the future) to Company all of his right, title, and interest
to the Property and Rights and any and all related patent rights, copyrights,
and applications and registrations therefor. During and after his engagement,
Consultant shall cooperate with Company, at Company's expense, in obtaining
proprietary protection for the Property and Rights and Consultant shall execute
all documents which Company shall reasonably request in order to perfect
Company's rights in the Property and Rights. Consultant hereby appoints Company
his attorney to execute and deliver any such documents on his behalf in the
event Consultant should fail or refuse to do so within a reasonable period
following Company's request, such appointment to be deemed coupled with an
interest. Consultant understands that, to the extent this Agreement shall be
construed in accordance with the laws of any state which limits the
assignability to Company of certain employee or consulting inventions, this
Agreement shall be interpreted not to apply to any such invention which a court
rules or Company agrees is subject to such state limitation.
-5-
10. CONFIDENTIALITY. Consultant understands that Company
continually obtains and develops valuable proprietary and confidential
information concerning its business, business relationships, and financial
affairs (the "Confidential Information") which may become known to Consultant in
connection with his engagement under this Agreement. Consultant acknowledges
that all Confidential Information, whether or not in writing and whether or not
labeled or identified as confidential or proprietary, is and shall remain the
exclusive property of Company or the third party providing such information to
Company. By way of illustration, but not limitation, Confidential Information
may include Property and Rights, trade secrets, technical information, know-how,
research and development activities of Company, product and marketing plans,
customer and supplier information, and information disclosed to Company or
Consultant by third parties of a proprietary or confidential nature or under an
obligation of confidence. Confidential Information is contained in various
media, including without limitation, patent applications, documentation,
manuals, plans, drawings, designs, technical specifications, laboratory
notebooks, supplier and customer lists, internal financial data, and other
documents and records of Company. Consultant agrees that Consultant shall not,
during the Consulting Term and thereafter, publish, disclose, or otherwise make
available to any third party, other than employees of Company with a need to
know, any Confidential Information except as expressly authorized in writing by
Company. Consultant agrees that Consultant shall use such Confidential
Information only in the performance of his duties for Company and in accordance
with any Company policies with respect to the protection of Confidential
Information. Consultant agrees not to use such Confidential Information for his
own benefit or for the benefit of any other person or business entity.
Consultant agrees to exercise all reasonable precautions to protect the
integrity and confidentiality of Confidential Information in his possession and
not to remove any materials containing Confidential Information from Company's
premises except to the extent necessary to his engagement. Upon the termination
of his engagement, or at any time upon Company's request, Consultant shall
return immediately to Company any and all materials containing any Confidential
Information then in his possession or under his control. Confidential
Information shall not include information which (a) is or becomes generally
known within Company's industry through no fault of Consultant; (b) is lawfully
and in good faith made available to Consultant by a third party who did not
derive it from Company and who imposes no obligation of confidence on
Consultant; or (c) is required to be disclosed by a governmental authority or by
order of a court of competent jurisdiction, provided that such disclosure is
subject to all applicable governmental or judicial protection available for like
material and reasonable advance notice is given to Company.
11. INJUNCTIVE RELIEF AND ADDITIONAL REMEDY. Consultant acknowledges
that the injury that would be suffered by Company as a result of a breach of the
provisions of this Agreement (including any provisions of Sections 8, 9, and 10)
would be irreparable and that an award of monetary damages to Company for such a
breach would be an inadequate remedy. Consequently, Company will have the right,
in addition to any other rights it may have, to obtain injunctive relief to
restrain any breach or threatened breach or otherwise to specifically enforce
any provision of this Agreement. and Company will not be obligated to post bond
or other security in seeking such relief. Without limiting Company's rights
under this Section 11 or any other remedies of Company and notwithstanding any
other provisions of this Agreement, if Consultant breaches any of the provisions
of Sections 8, 9, or 10, Company will have the right to cease making any
payments otherwise due to Consultant under this Agreement.
-6-
12. OTHER OBLIGATIONS OF CONSULTANT.
(a) PROTECTION OF COMPANY. Consultant shall not commit any
act, or in any way assist others to commit any act, that would injure Company or
its Affiliates.
(b) PERIODIC REPORTS. From time to time, and as often as
requested by Company, Consultant shall prepare and deliver to Company statements
and schedules identifying and describing the Services and such other reports in
connection with the Services as Company may reasonably request, all in form and
substance satisfactory to Company.
(c) COMPLIANCE. Consultant shall comply with all applicable
laws, rules, and regulations in respect of the conduct of his business.
13. MISCELLANEOUS.
(a) NOTICES. All notices, requests, demands and other
communications given under or by reason of this Agreement shall be in writing
and shall be deemed given when delivered in person or when mailed, by certified
mail (return receipt requested), postage prepaid, addressed as follows (notice
to Company will only be deemed given when both the original notice to the Vice
President Finance/Human Resources and the copy have been delivered):
TO COMPANY: TO EXECUTIVE:
Performance Health Technologies, Inc. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Attn: Vice President Finance/Human Resources ____________________
Second Floor ____________________
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ______
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WITH A COPY TO: WITH A COPY TO:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Doerner, Saunders, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) GOVERNING LAW. The execution, validity, interpretation,
and performance of this Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.
(c) HEADINGS. The headings of this Agreement are not part of
the provisions hereof and shall have no force or effect.
(d) ENTIRE AGREEMENT AND AMENDMENTS. This Agreement contains
the entire agreement of Consultant and Company relating to the matters contained
herein and supersedes all prior agreements and understandings, oral or written,
between Consultant and Company with respect to the subject matter hereof.
Without limiting the foregoing sentence, this Agreement supersedes the
Employment Agreement. This Agreement may be changed only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
-7-
(e) SEVERABILITY. If any provision of this Agreement is
rendered or declared illegal or unenforceable by reason of any existing or
subsequently enacted legislation or by the decision of any court of competent
jurisdiction, Consultant and Company shall either meet and negotiate substitute
provisions or promptly request the court to substitute provisions for those
rendered or declared illegal or unenforceable to preserve the original intent of
this Agreement to the extent legally possible, but all other provisions of this
Agreement shall remain in full force and effect.
(f) EFFECT AND ASSIGNMENT OF AGREEMENT. This Agreement shall
be binding upon Consultant and his heirs, executors, administrators, legal
representatives, and assigns and upon Company and its respective successors and
assigns. No assignment of this Agreement or of any of the rights or obligations
hereunder by any party hereto shall be valid without the written consent of the
other party. Provided, however, Company may assign this Agreement without the
consent of Consultant as part of the sale, lease, license, or similar
transaction of, or involving, all or substantially all of Company's assets,
products, or technology.
IN WITNESS WHEREOF, Consultant and Company have executed this Agreement
on the date first above written.
"Company" "Consultant"
Performance Health Technologies, Inc.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------- ---------------------
Title: Board Chairman ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-8-
