SEVERANCE AND CONSULTING AGREEMENT
AND COMPLETE RELEASE
This Severance and Consulting Agreement and Complete Release ("Agreement")
is entered into between Mannatech, Incorporated ("Mannatech") and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ ("▇▇▇▇▇").
WHEREAS, ▇▇▇▇▇ has been employed by Mannatech as Chief Executive Officer;
and
WHEREAS, effective May 1, 1997, ▇▇▇▇▇'▇ employment and Employment Agreement
with Mannatech were terminated by mutual agreement of both parties; and
WHEREAS, ▇▇▇▇▇'▇ expertise and knowledge relating to various ongoing
matters involving Mannatech or third parties remain valuable to Mannatech; and
WHEREAS, ▇▇▇▇▇ and Mannatech desire to continue their mutually beneficial
business relationship; and
WHEREAS, as an employee and officer of Mannatech, ▇▇▇▇▇ has had access to
trade secret, confidential and proprietary information belonging to Mannatech or
third parties, which information constitutes valuable property and other
interests of Mannatech in need of protection; and
WHEREAS, ▇▇▇▇▇ and Mannatech desire to resolve completely and forever all
claims and differences between them.
NOW, THEREFORE, in consideration of the mutual promises set forth below,
▇▇▇▇▇ and Mannatech agree as follows:
1. ▇▇▇▇▇ TO RESIGN. ▇▇▇▇▇ hereby resigns all officer and employee
positions with Mannatech. Upon signing this Agreement, and provided that ▇▇▇▇▇
does not later revoke this Agreement in accordance with paragraph 12 below,
Mannatech's corporate and personnel records will reflect that ▇▇▇▇▇ voluntarily
resigned. ▇▇▇▇▇ represents that he has returned to Mannatech all property,
without limitation, belonging to Mannatech.
2. PAYMENTS BY MANNATECH. Mannatech agrees that if ▇▇▇▇▇ does not revoke
this Agreement in accordance with paragraph 12 below, and provided ▇▇▇▇▇ does
not violate any of his promises set forth in paragraphs 11 and 12 of his
Employment Agreement (which paragraphs survive termination of the Employment
Agreement), Mannatech will:
(a) pay to ▇▇▇▇▇ a consulting fee at the rate of twenty-five thousand
dollars ($25,000.00) per month for a period of one (1) year from May 1, 1997,
payable in monthly installments, less federal withholding taxes and other
deductions required by law, if any. Mannatech will send ▇▇▇▇▇ a Form 1099 for
each year in which payments are made;
(b) immediately convey and deliver to ▇▇▇▇▇ that certain 1996 Lexus L5400
automobile, vehicle identification number ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, which Mannatech has
previously made available for ▇▇▇▇▇'▇ use, including, in recordable form, the
Texas Certificate of Title on said automobile; and
(c) grant to ▇▇▇▇▇ an option to purchase 200,000 shares of common stock
issued and outstanding in accordance with the terms of that certain Stock Option
Agreement set forth in Exhibit "A" hereto. (▇▇▇▇▇ is aware that Mannatech
contemplates an initial public offering of its securities within the next twelve
(12) months.)
▇▇▇▇▇ understands and agrees that the above amounts are in excess of what
he is otherwise entitled to receive as a terminated employee of Mannatech, and
that, except for any payments he may be entitled to receive as a terminated
employee under Mannatech's 401(k) plan, he will receive no further or other
salary, benefits, commissions, bonuses (including contributions to or
distributions from the Bonus Volume Limited Partnership described in Paragraph 4
of ▇▇▇▇▇'▇ Employment Agreement), accrued but unused vacation, expense
reimbursement or similar payments from Mannatech.
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3. CONTINUED CONSULTING RESPONSIBILITIES. ▇▇▇▇▇ agrees and covenants
that he will provide reasonable consulting services to Mannatech with respect to
ongoing matters involving subjects for which he was responsible, in whole or in
part, during his employment with Mannatech, for a period of one (1) year from
May 1, 1997. Such consulting services will be provided by ▇▇▇▇▇ in good faith
on an as needed basis. In connection with any consulting services to be
performed, ▇▇▇▇▇ shall not be required to travel more than a 50 mile radius of
his then residence at his own expense (the "Consulting Distance"). In the event
that Mannatech should request ▇▇▇▇▇ to travel beyond the Consulting Distance,
Mannatech shall reimburse ▇▇▇▇▇ the reasonable and actual out-of-pocket costs of
such travel including, but not limited to, hotel, air fair, taxi/car rental,
meals, and other reasonable per diem expenses.
4. NO FUTURE EMPLOYMENT. ▇▇▇▇▇ agrees that he will not seek or demand
employment with Mannatech or any of its related companies or successors at any
time in the future.
5. COMPLETE RELEASE BY ▇▇▇▇▇. As a material inducement to Mannatech
to enter into this Agreement, ▇▇▇▇▇ hereby irrevocably and unconditionally
releases, acquits, and forever discharges Mannatech, as well as each of its
owners, stockholders, predecessors, trustees, successors, holding companies,
assigns, agents, directors, officers, employees, representatives, plan
administrator(s), attorneys, parent companies, divisions, subsidiaries,
affiliates, (and any agents, directors, officers, employees, representatives,
and attorneys of such parent companies, divisions, subsidiaries and
affiliates), past or present, in both their representative and individual
capacities, and all persons acting by, through, under or in concert with any
of them (collectively referred to as the "Mannatech Releasees"), from any and
all claims, causes of action or demands, of any nature whatsoever, known or
unknown, suspected or unsuspected, including any claims or demands for costs,
expenses or attorney's fees. This includes a release of any rights or claims
▇▇▇▇▇ may have under the Age Discrimination
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in Employment Act, which prohibits age discrimination in employment; Title VII
of the Civil Rights Act of 1964, which prohibits discrimination in employment
based on race, color, national origin, religion or sex; the Americans With
Disabilities Act, which prohibits discrimination in employment based on a
disability; the Employee Retirement Income Security Act; the Texas Payday Law;
the Texas Workers' Compensation Act; the Texas Commission on Human Rights Act;
and any other federal, state or local law or regulation. This also includes a
release of any claims for wrongful discharge, breach of express or implied
contract, breach of express or implied covenant of good faith and fair dealing,
and any tort claims, including any claim of negligence or gross negligence on
the part of Mannatech or any of the Mannatech Releasees. This release does not
include, however, a release of ▇▇▇▇▇'▇ rights, if any, under Mannatech's 401(k)
plan. Moreover, this release does not waive, release, include, or apply to any
and all rights and/or claims which may arise and/or accrue after the date ▇▇▇▇▇
signs this agreement, including but not limited to, claims for a breach of this
agreement by Mannatech.
6. COMPLETE RELEASE BY MANNATECH. As a material inducement to ▇▇▇▇▇ to
enter into this Agreement, Mannatech hereby irrevocably and unconditionally
releases, acquits, and forever discharges ▇▇▇▇▇, as well as each of his heirs,
administrators, trustees, representatives, agents, attorneys, executors,
successors and assigns, from any and all claims, causes of action or demands, of
any nature whatsoever, known or unknown, suspected or unsuspected, including any
claims or demands for costs, expenses or attorney's fees. Moreover, this release
does not waive, release, include, or apply to any and all rights and/or claims
which may arise and/or accrue after the date Mannatech signs this agreement,
including but not limited to, claims for a breach of this agreement by ▇▇▇▇▇.
7. NO FUTURE LAWSUITS. ▇▇▇▇▇ and Mannatech agree never to file a lawsuit
asserting any claims that are released in paragraphs 5 and 6.
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8. NO RELEASE OF FUTURE CLAIMS. This Agreement does not waive or release
any rights or claims that ▇▇▇▇▇ may have under the Age Discrimination in
Employment Act which may arise after the date he signs this Agreement. Moreover,
this release does not waive, release, include, or apply to any and all rights
and/or claims which may arise and/or accrue after the date the parties sign this
agreement, including but not limited to, claims for a breach of this agreement
by either party.
9. NON-ADMISSION OF LIABILITY. ▇▇▇▇▇ and Mannatech agree that they are
entering into this Agreement to, among other things, resolve any claims or
differences that may exist between them, and to avoid the cost of possible
lawsuits. By entering into this Agreement, neither party admits any wrongdoing.
10. CONSEQUENCES OF VIOLATION OF PROMISES. ▇▇▇▇▇ agrees that if he
breaches any of the terms of this Agreement, ▇▇▇▇▇ will not be entitled to a
continuation of the payments referenced in paragraph 2 of this Agreement. ▇▇▇▇▇
and Mannatech understand and agree that the consequences of violation of
promises identified in this paragraph do not constitute their exclusive remedies
for breaches of this Agreement, and each shall be entitled to recover such other
and further legal and equitable relief to which he or it may be entitled.
11. PERIOD OF REVIEW AND CONSIDERATION OF AGREEMENT/RIGHT TO CONSULT
ATTORNEY. ▇▇▇▇▇ has been given a period of 21 days from May 8, 1997 to
review and consider this Agreement before signing it. He may use as much of
this 21-day period as he wishes before signing and he is encouraged to
consult with an attorney before signing this Agreement. ▇▇▇▇▇ understands
that whether or not to consult with an attorney is his decision.
12. ▇▇▇▇▇'▇ RIGHT TO REVOKE AGREEMENT. ▇▇▇▇▇ may revoke this Agreement
within seven days after signing it. Revocation can be made by delivering a
written notice of revocation to Mannatech c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇, General Counsel,
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. For this revocation to be
effective, written
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notice must be received by ▇▇. ▇▇▇▇▇▇ no later than the close of business on the
seventh day after ▇▇▇▇▇ signed this Agreement. If ▇▇▇▇▇ revokes this Agreement,
it will not be effective or enforceable and he will not receive the payments
described in paragraph 2.
13. RESPONSIBILITY FOR TAXES. Mannatech makes no representations regarding
the taxability of the payments made in accordance with paragraph 2 above, and
▇▇▇▇▇ hereby agrees that he is solely responsible for all tax obligations, if
any, including, but not limited to, all reporting and payment obligations, which
may arise as a consequence of such payments, with the exception of any and all
withholding obligations, if any, attributable to Mannatech as a result of the
payments made in accordance with paragraph 2 above, for which obligations
Mannatech will be responsible. ▇▇▇▇▇ hereby agrees to indemnify and hold
Mannatech and the Mannatech Releasees harmless from and against any and all
loss, cost, damage or expense, including, without limitation, attorney's fees,
incurred by Mannatech and the Mannatech Releasees, arising out of the tax
treatment of any payments received by ▇▇▇▇▇ as a result of this Agreement,
except ▇▇▇▇▇ shall not indemnify and hold Mannatech and the Mannatech Releasees
harmless from and against losses, costs, damages, or expenses, including without
limitation, attorney's fees, arising from and/or relating to Mannatech's
withholding obligations, if any, relating to the payments received by ▇▇▇▇▇ as a
result of this Agreement.
14. PROPER CONSTRUCTION. The language of this Agreement shall be construed
as a whole, according to its fair meaning, and not strictly for or against
either of the parties hereto. The paragraph headings used in this Agreement are
intended solely for convenience of reference and shall not in any manner
amplify, limit, modify or otherwise be used in the interpretation of any of the
provisions hereof.
15. ENTIRE AGREEMENT. This Agreement supersedes all other agreements
between the parties with respect to the subject matter hereof; provided,
however, that Paragraphs 11 and 12 of ▇▇▇▇▇'▇ Employment Agreement continue to
survive the termination of the Employment Agreement. With respect to said
Paragraph 12 of
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▇▇▇▇▇'▇ Employment Agreement ("Restrictive Covenant"), ▇▇▇▇▇ and Mannatech
hereby agree that the one (1) year period shall commence on May 1, 1997, and
that the covered Territory shall, in addition to the United States of America,
include Canada, the Bahamas and all other countries in which Mannatech currently
does business.
16. AGREEMENT TO BE BINDING ON OTHERS. If it becomes effective, this
Agreement will be binding upon ▇▇▇▇▇ and Mannatech, and their respective heirs,
administrators, trustees, representatives, executors, successors and assigns.
17. AGREEMENT TO BE CONFIDENTIAL. ▇▇▇▇▇ and Mannatech agree that they
will keep the terms, amount and fact of this Agreement completely confidential,
and that, unless required to do so by law or court order, or if necessary to
enforce this Agreement or defend themselves against claims by the other, they
will not disclose any information concerning this Agreement to anyone (other
than their attorneys and tax advisers, if any, and in the case of ▇▇▇▇▇, his
spouse, all of whom shall be subject to and bound by this confidentiality
provision).
18. NO DETRIMENTAL REMARKS OR ACTIONS. ▇▇▇▇▇ and Mannatech agree that they
will not, directly or indirectly, in any individual or representative capacity
whatsoever, make any statement, oral or written, or perform any act or omission
which is or could be detrimental in any material respect to the reputation or
goodwill of the other (including, in the case of Mannatech, its successors,
affiliates, or related companies); provided, however, that any truthful
statements made by either ▇▇▇▇▇ or Mannatech in good faith shall not violate
this subsection. Mannatech's obligations under this paragraph extend only to
officers and senior management employees of Mannatech who were officers and/or
senior management employees of Mannatech at the time the statements were made.
19. TEXAS LAW APPLIES. This Agreement will be construed in accordance with
and governed by the laws of the State of Texas.
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20. NO WAIVER OR MODIFICATION. No waiver or modification of this
Agreement will be valid unless in writing and signed by both parties.
21. SEVERABILITY OF PROVISIONS. If any provision in this Agreement shall
be held to be invalid, illegal or unenforceable, this Agreement shall be
construed as if that provision had never been contained in this Agreement and
the remainder of this Agreement shall remain valid and enforceable.
22. ▇▇▇▇▇ has elected to maintain his current company health insurance
coverage for a period of eighteen (18) months, as provided for by COBRA.
Mannatech has agreed to and will pay all associated premIum costs related to
such health and dental insurance coverage, for a period of six (6) months,
beginning May 1, 1997.
PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE OF ALL KNOWN
AND UNKNOWN CLAIMS AS SPECIFIED IN PARAGRAPHS 5, 6, AND 8 ABOVE.
I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THE FOREGOING AGREEMENT, THAT I
UNDERSTAND ALL OF ITS TERMS, AND THAT I AM ENTERING INTO IT VOLUNTARILY.
I FURTHER ACKNOWLEDGE THAT I AM AWARE OF MY RIGHTS TO RENEW AND CONSIDER
THIS AGREEMENT FOR 21 DAYS AND TO CONSULT WITH AN ATTORNEY ABOUT IT, AND STATE
THAT BEFORE SIGNING THIS AGREEMENT, I EXERCISED THESE RIGHTS TO THE FULL EXTENT
THAT I DESIRED.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇")
August 1, 1997
-------------------------------------
Date
Subscribed and sworn to before me this 1 day of August , 1997.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Notary Public for the State of Oklahoma
County of Oklahoma
My Commission Expires: 5-12-01
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ACCEPTED AND AGREED:
Mannatech, Incorporated ("Mannatech")
By /s/ [Illegible]
---------------------------------
Title CHIEF EXECUTIVE OFFICER
------------------------------
Date August 13, 1997
-------------------------------
Subscribed and sworn to before me this 13 day of August , 1997.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Notary Public for the State of Texas
[SEAL] MY COMMISSION EXPIRES County of Dallas
September 11, 1997 My Commission Expires: 9-11-97
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