CONSULTING AGREEMENT II
THIS CONSULTING AGREEMENT (the "Agreement") is effective as of May 1,
1998, between Health Fitness Corporation (the "Company"), located at 3500 West
80th Street, Suite 130, Bloomington, Minnesota 55431 and Charles E. Bidwell (the
"Consultant"), residing at 835 Windjammer Lane, Mound, Minnesota 55364.
RECITALS:
WHEREAS, the Company wishes to provide for the services of Consultant
to perform certain financial, accounting and other responsibilities for the
Company for the term and on the conditions here set forth; and
WHEREAS, Consultant desires to be assured of certain payments from the
Company for Consultant's services during the term and,
WHEREAS, Company desires protection of Company's confidential business
and technical information which has been developed by the Company in recent
years at substantial expense.
NOW, THEREFORE, in consideration of the mutual promises here contained,
the Company and Consultant each intend to be legally bound, covenant and agree
as follows:
1. Termination of Previous Agreement and Consulting Agreement. The parties agree
that the Consulting Agreement dated April 1, 1997 is terminated effective April
30, 1998. Upon the terms and conditions set forth in this Agreement, the Company
hires the Consultant to perform certain functions as set forth in Section 2.
2. Duties. Consultant shall design a Management Reporting System, shall assist
in a recapitalization of the Company, and shall perform certain duties until a
Chief Financial Officer of the Company is hired, and such other duties as may,
from time to time, be negotiated between the Consultant and the President or the
Board of Directors of the Company.
3. Term. Consultant's relationship shall commence on the above date and continue
until: (a) one year after the date the Company gives written notice of
termination to the Consultant or (b) ninety days after the Consultant gives
written notice of termination to the Consultant.
4. Payments to Consultant.
(a) Fees. For services rendered under this Agreement, Company
shall pay Consultant fees at a monthly rate of $14,500. The
Consultant shall not be eligible for any benefits of the
Company. During the term of this Agreement, Consultant shall
be expected to perform services for the Company for
approximately fifteen working days per month, which shall be
adjusted by mutual agreement of the parties.
(b) Additional Fees. The Consultant shall be eligible for
additional fees for each year this Agreement is in effect,
which shall be calculated on a calendar year basis and paid by
March 31st of each year. The additional fees shall be based
upon a comparison of the Company's actual pre-tax profits (not
including any bonus paid to Loren Brink or Consultant) ("PTP")
with the Company's budgeted pre-tax profits (not including any
bonus budgeted for Loren Brink or Consultant) ("BPTP"). The
bonus shall be paid in accordance with the following formula:
o If Company's PTP = 90% of BPTP, then the additional fee
shall be 25% of $174,000.
o If Company's PTP = 100% of BPTP, then the additional fee
shall be 35% of $174,000.
o If Company's PTP = 120% of BPTP, then the additional fee
shall be 55% of $174,000.
PTP's between 90% and 120% shall result in prorated fees.
5. Business Expenses. The Consultant shall bill the Company and the Company
shall pay to Consultant all business expenses incurred by the Consultant in
performing his duties for the Company. For purposes of business travel expenses,
Consultant's office in Hamel, Minnesota shall be considered Consultant's office
and Consultant shall be paid mileage for trips between Hamel and Company's
office in Bloomington, Minnesota.
6. Confidential Information.
(a) For purposes of this Section 6, the term "Confidential Information"
means information which is not generally known and which is proprietary
to the Company, including: (i) trade secret information about Company
and its services; and (ii) information relating to the business of
Company as conducted at any time within the previous two years or
anticipated to be conducted by Company, and to any of its past, current
or anticipated products, including, without limitation, information
about Company's research, development, services, purchasing,
accounting, engineering, marketing, selling, leasing or servicing. All
information which Consultant has a reasonable basis to consider
Confidential Information or which is treated by Company as being
Confidential Information shall be presumed to be Confidential
Information, whether originated by Consultant, or by others, and
without regard to the manner in which Consultant obtains access to such
information.
(b) Consultant will not during the term of this Agreement and following
expiration or termination of this Agreement, use or disclose any
Confidential Information to any person not employed by Company without
the prior authorization of Company and will use reasonably prudent care
to safeguard, protect and to prevent the unauthorized disclosure of,
all of such Confidential Information.
7. Inventions.
(a) For purposes of this Section 7, the term "Inventions" means
discoveries, improvements and ideas (whether or not in writing or
reduced to practice) and works of authorship, whether or not patentable
or copyrightable: (1) which relate directly to the business of Company,
or to Company's actual or demonstrably anticipated research or
development; (2) which result from any work performed by Consultant for
Company; (3) for which equipment, supplies, facilities or trade secret
information of Company is utilized; or (4) which were conceived or
developed during the time Consultant was obligated to perform the
duties described in Section 2.
(b) Consultant agrees that all Inventions made, authored or conceived
by Consultant, either solely or jointly with others, during the term of
this Agreement, shall be the sole and exclusive property of Company.
Upon termination of this Agreement, Consultant shall turn over to a
designated representative of Company all property in Consultant's
possession and custody belonging to Company. Consultant shall not
retain any copies or reproductions of correspondence, memoranda,
reports, notebooks, drawings, photographs or other documents relating
in any way to the affairs of Company which came into Consultant's
possession at any time during the term of this Agreement.
(c) Consultant will promptly upon request by Company fully disclose to
Company in writing any Inventions. Consultant will assign (and by this
Agreement, hereby assigns) to Company all of Consultant's rights to
Inventions, and to applications for patents or copyrights in all
countries and to patents and copyrights granted in all countries. Upon
the request of Company, Consultant will apply for such United States or
foreign patents or copyrights as Company may deem desirable, and
Consultant will do any and all acts necessary in connection with such
applications for patents or copyrights, or assignments, in order to
establish in Company the entire right, title and interest in and to
such patents or copyrights. If Consultant renders assistance to Company
under this Section 7(c) after termination of this Agreement, Company
shall pay a reasonable fee as determined by Company for Consultant's
time and expenses.
8. No Adequate Remedy. The parties declare that is impossible to measure in
money the damages which will accrue to either party by reason of a failure to
perform any of the obligations under this Agreement. Therefore, if either party
shall institute any action or proceeding to enforce the provisions hereof, such
person against whom such action or proceeding is brought hereby waives the claim
or defense that such party has an adequate remedy at law, and such person shall
not urge in any such action or proceeding the claim or defense that such party
has an adequate remedy at law.
9. Indemnification Company shall indemnify Consultant for all expenses incurred
by Consultant, including any judgments, or claims, and including reasonable
attorney expenses and other expenses, for any matter arising out of or related
to Consultant's actions or failure to act on behalf of the Company, to the
extent permitted by Minn. Stat. Section 302A.559.
10. Miscellaneous.
(a) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of all successors and assigns of the Company,
whether by way of merger, consolidation, operation of law, assignment,
purchase or other acquisition of substantially all of the assets or
business of Company and shall only be assignable under the foregoing
circumstances and shall be deemed to be materially breached by Company
if any such successor or assign does not absolutely and unconditionally
assume all of Company's obligations to Consultant hereunder. Any such
successor or assign shall be included in the term "Company" as used in
this Agreement. Consultant may not assign his rights and obligations
hereunder, except that Consultant's rights and obligations to receive
fees and expenses pursuant to Sections 4 and 5 may be assigned by will
or by operation of law to Consultant's estate or legal representative.
(b) Notices. All notices, requests and demands shall be in writing and
be delivered or mailed to any such party at its address which:
(i) In the case of Company shall be:
HEALTH FITNESS CORPORATION.
3500 West 80th Street, Suite 130
Minneapolis, Minnesota 55431
(ii) In the case of the Consultant shall be:
MR. CHARLES E. BIDWELL
835 Windjammer Lane
Mound, Minnesota 55364
Either party may by notice designate a change of address. Any notice,
if mailed properly addressed, postage prepaid, registered or certified
mail, shall be deemed dispatched on the registered date or that stamped
on the certified mail receipt, and shall be deemed received within the
fifth business day thereafter, or when it is actually received,
whichever is sooner.
(c) Captions. The various headings or captions in this Agreement are
for convenience only and shall not affect the meaning or interpretation
of this Agreement.
(d) Governing Law. The validity, construction and performance of this
Agreement shall be governed by the laws of the State of Minnesota and
any legal proceeding arising out of or in connection with this
Agreement shall be brought in the appropriate courts of the State of
Minnesota, with each of the parties consenting to the exclusive
jurisdiction of said courts for this purpose.
(e) Construction. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
(f) Waivers. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right
or remedy hereunder preclude any other or further exercise thereof or
the exercise of any right or remedy granted hereby or by any related
document or by law.
(g) Modification. This Agreement may not be, and shall not be, modified
or amended except by a written instrument signed by both parties
hereto.
(h) No Conflict in a Business. Consultant agrees that he will not,
during the term of this Agreement, transact business with the Company
personally, or as an agent, owner, partner, shareholder of any other
entity; provided, however, Consultant may enter into any business
transaction that is, in the opinion of the Compensation Committee of
the Company's Board of Directors, reasonable, prudent or beneficial to
the Company, so long as any such business transaction is at arms-length
as though between independent and prudent individuals and is ratified
and approved by a majority of the members of the Compensation Committee
of the Company's Board of Directors.
(i) Entire Agreement. This Agreement constitutes the entire Agreement
and understanding between the parties hereto in reference to all the
matters herein agreed upon; provided, however, that this Agreement
shall not deprive Consultant of any other rights Consultant may have
now, or in the future, pursuant to law.
(j) Counterparts. This Agreement shall be executed in at least two
counterparts, each of which shall constitute an original, but both of
which, when taken together, will constitute one in the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered this _____ day of June, 1998 to be effective as of
the day and year first above written.
HEALTH FITNESS CORPORATION
By: /s/ Loren S. Brink
Its: President
CONSULTANT
/s/ Charles E. Bidwell
Charles E. Bidwell