Document:

exv10w11

 

Exhibit 10.11

2006
CERTIFICATE OF REINSURANCE

for the

Agreement of  Reinsurance
between the

WORKERS’ COMPENSATION REINSURANCE ASSOCIATION

and

RTW Inc

American Compensation Insurance Company 0030392

Bloomington Compensation Insurance Company 0012311

	 	 	 	 	 	 	 	 	 
	Coverage Period:

	 	January 1, 2006 — December 31, 2006
	 	Retention Limit:
	 	$	390,000	 
	 

	 	(12:01 a.m. Standard Time)	 	 	 	 	 	 

This certifies that the entities named above are Members of the Workers’ Compensation Reinsurance
Association (WCRA), and that the WCRA reinsures the Members’ liability during the indicated
coverage period for benefits pursuant to Minn. Stat. Ch. 176 in excess of the Members’ retention
limit for the period indicated above. This certificate provides for coverage in accordance with the
terms and conditions of the Reinsurance Agreement approved by the Commissioner of the Minnesota
Department of Labor and Industry on December 22, 2005. This certificate shall not be valid for any
portion of the indicated period during which an entity is not a Member of the Association.

	 	 	 
	 

	 	Workers’ Compensation Reinsurance Association
	 
	 

	 	
	 
	 

	 	Carl W. Cummins III
	 

	 	President and Chief Executive Officer
	 

	 	Dated: December 27, 2005

Worker’s
Compensation Reinsurance Association®

Suite 1700, 400 Robert Street North, Saint Paul, MN 55101 Phone:
651.293.0999 Fax: 651.229.1848 www.wcra.bizexv10w15

 

Exhibit 10.15

Description of the Reinsurance Agreement for 2006 between ACIC, BCIC and

GE Reinsurance Corporation and Max Re Ltd. effective January 1, 2006

The Company, on behalf of its subsidiaries American Compensation Insurance Company (ACIC) and
Bloomington Compensation Insurance Company (BCIC), entered into reinsurance contracts for the
fiscal year beginning January 1, 2006. The following summarizes the significant terms of these
reinsurance agreements.

LIABILITY OF THE REINSURER

The Reinsurers shall pay to ACIC and BCIC, with respect to Workers’ Compensation and Employers’
Liability Business, the amount of Net Loss for each Occurrence, as defined in the contracts, in
excess of the Company’s retention, but not exceeding the Limits of Liability of the Reinsurer as
follows:

	 	 	 	 	 
	Loss Layer	 	Reinsurer	 	Comment
	$800,000 excess of $200,000

	 	50.0% GE Reinsurance Corporation
50.0% Max Re Ltd.
	 	*
	 
	 	 	 	 
	$4,000,000 excess $1,000,000

	 	100.0% GE Reinsurance Corporation
	 	*

			
	*	 	All business written by the Company.

Recoveries from the MN WCRA will inure to the benefit of this treaty

COMMENCEMENT AND TERMINATION

The agreement shall apply to new and renewal policies of ACIC and BCIC becoming effective at and
after 12:01 A.M., January 1, 2006, and to policies in force at 12:01 A.M., January 1, 2006, with
respect to losses resulting from Occurrences taking place at or after the aforesaid time and date.

The contracts are for one year and automatically expire at 12:01 A.M. on January 1, 2007. The
Reinsurers may also terminate the contracts in the event of significant adverse events at ACIC or
BCIC or in the event of a change in control of ACIC, BCIC or RTW, Inc.

REINSURANCE PREMIUM

ACIC and BCIC agreed to pay the Reinsurer based on subject premiums earned for each Loss Layer as
shown above. These rates are similar to the rates that we paid in 2005.<PAGE>
                                                                   EXHIBIT 10.12

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT, by and between Health Fitness Corporation, a Minnesota
corporation, (hereinafter called "HFC"), and David Hurt (hereinafter called
"Executive"):

                                    RECITALS

         WHEREAS, the Executive was promoted from Vice President of Hospital
Operations to Senior Vice President of Operations - Western Region effective May
8, 2001;

         WHEREAS, the Executive received an increase in base salary for such
promotion and is receiving, contingent upon the signing of this Agreement, which
contains among other matters confidentiality, noncompetition and inventions
provisions, an additional retroactive increase in base salary, eligibility for
annual bonus compensation and the benefit of the terms set forth in Article II
as well as other terms and benefits set forth in this Agreement;

         WHEREAS, the Executive wishes to continue to be employed with HFC and
HFC wishes to employ the Executive under the terms and conditions set forth in
this Agreement;

         WHEREAS, the Executive acknowledges and agrees that he has and will
continue to have access to confidential, proprietary and trade secret
information in the course of his employment with HFC, the unauthorized use or
disclosure of which would cause irreparable harm to HFC;

         WHEREAS, the Executive wishes to receive from HFC the additional
compensation and benefits, and the benefit of other terms of conditions of
employment, as set forth in this Agreement as valuable consideration for the
confidentiality, noncompetition, inventions and other provisions contained in
this Agreement; and

         WHEREAS, HFC and the Executive wish to set forth the terms of their
agreement in writing;

         NOW, THEREFORE, in consideration of Executive's additional compensation
and benefits and the continuation of his employment under the terms and
conditions of this Agreement, any promotions, increases in compensation, and/or
other benefits now or hereafter paid or made available to Executive by HFC, and
for other good and valuable consideration the receipt and sufficiency of which
is specifically acknowledged by the parties, Executive and HFC agree as follows:

                                    ARTICLE I

                      EMPLOYMENT, COMPENSATION AND BENEFITS

         1.01     Employment With HFC. HFC hereby agrees to continue to employ
Executive in the position of Senior Vice President of Operations - Western
Region effective August 13, 2001, and

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Executive hereby accepts such employment with HFC, subject to the terms and
conditions of this Agreement. Such employment shall continue indefinitely until
terminated in accordance with Article II of this Agreement.

         1.02     Duties.

                  (a)    Executive agrees, during his employment, to devote his
                  full time and best efforts to the business of HFC, including,
                  without limitation, the performance of those duties and
                  responsibilities reasonably and customarily associated with
                  his position such as, but not limited to, those duties and
                  responsibilities associated with increasing HFC's
                  profitability and revenue growth; provided, however, that
                  Executive's duties and responsibilities shall be subject to
                  determination by HFC's Chief Executive Officer or his designee
                  (with such designee being a corporate officer of HFC).

                  (b)    Executive shall report to, and at all times shall be
                  subject to the direction of, HFC's Chief Executive Officer or
                  his designee (with such designee being a corporate officer of
                  HFC).

                  (c)    Executive, at all times during his employment with HFC,
                  shall comply with HFC's reasonable standards, regulations and
                  policies as determined or set forth by HFC from time to time
                  and as applicable to employees of HFC.

         1.03     Outside Activities. Executive shall not engage in any outside
activities that conflict or appear to conflict with HFC's interests, or that
interfere in any way with Executive's performance of his duties hereunder. In
addition, Executive shall not engage in any activity that might subject HFC to
criticism or adverse publicity, that might interfere with his normal work
schedule, or that might interfere with his job duties. Moreover, Executive shall
not, and hereby agrees not to accept remuneration of any kind form his
participation in any outside activity without the express written approval of
HFC.

         1.04     Annual Base Salary. Executive's annual base salary shall be
calculated on the gross amount of U.S. $104,251 per year (retroactive to May 8,
2001 effective only as a specific condition to, and upon the signing of, this
Agreement), less withholding for income and FICA taxes and any other proper
deductions. Executive's annual base salary will be paid to him in accordance
with HFC's normal payroll practices. Executive's performance shall be reviewed
annually for base salary increase beginning one year from Executive's date of
promotion and such increase, if any, shall be determined by the Chief Executive
Officer in his sole discretion.

         1.05     Fringe Benefits.  HFC shall provide the following fringe
benefits to Executive so long as he is employed by HFC or as otherwise required
by law:

                  (a)    Executive is eligible to accrue up to 15 days of paid
                  vacation time per anniversary year in accordance with HFC's
                  standard vacation practices and policies. In addition,
                  Executive may be eligible for additional paid time off in
                  accordance with HFC's standard paid time off practices and
                  policies.

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                  (b)    Executive shall be eligible to participate in all other
                  employee benefit plans and programs offered by HFC from time
                  to time, including, but not limited to, any medical, dental,
                  short-term disability, long-term disability and life insurance
                  coverage, or retirement plans, in accordance with the terms
                  and conditions of those benefit plans and programs.

                  (c)    Effective only as a specific condition to, and upon
                  signing of, this Agreement, Executive shall be eligible to
                  participate in an annual calendar year bonus program effective
                  with the 2001 calendar year. Such bonus program shall pay
                  Executive up to 10% of his calendar year base salary if the
                  Executive achieves certain performance criteria. Such
                  performance criteria will be determined annually by HFC as
                  approved by the Board of Directors of HFC. Executive's
                  achievement of the performance criteria will be determined
                  after the annual audit of HFC's financial statements, and the
                  bonus, if earned will be payable to Executive (less
                  withholding for income tax and FICA taxes and any other proper
                  deductions) no later than the April 30th following the audit.
                  The Executive must be in the active employ of HFC at the time
                  the bonus is paid to be eligible for any portion of the bonus.

         1.06     Expenses. During the term of this Agreement, Executive shall
be entitled to prompt reimbursement by HFC for all reasonable, ordinary and
necessary travel, entertainment and other business related expenses incurred by
Executive (in accordance with the policies and procedures established by HFC for
employees from time to time) in the performance of his duties and
responsibilities under this Agreement; provided, however, that Executive shall
properly account for such expenses in accordance with federal, state and local
tax requirements and HFC's policies and procedures.

                                   ARTICLE II

                                   TERMINATION

         2.01     Events of Termination.  Executive's employment with HFC:

                  (a)      May be terminated by mutual written agreement of HFC
                  and Executive.

                  (b)      Shall terminate immediately upon the death of
                  Executive.

                  (c)      May be terminated upon written notice from HFC to
                  Executive for Cause, which shall mean the following:

                                    (i)    Failure of Executive to (a)
                           satisfactorily, faithfully, diligently or competently
                           perform the duties, requirements and responsibilities
                           of his employment as contemplated by this Agreement
                           or as assigned by HFC's Chief Executive Officer, or
                           (b) take reasonable direction consistent with his
                           position from the HFC's Chief Executive Officer; or

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                                    (ii)    Failure of Executive to comply with
                           the reasonable policies, regulations and directives
                           of HFC as in effect from time to time; or

                                    (iii)   Any act or omission on the part of
                           Executive which constitutes a failure to comply with
                           the provisions of this Agreement; or

                                    (iv)    Any act or omission on the part of
                           Executive which is harmful to the reputation or
                           business of HFC, including, but not limited to,
                           personal conduct of Executive which is inconsistent
                           with federal and state laws respecting harassment of,
                           or discrimination against, one or more of HFC's
                           employees; or

                                    (v)    Conviction of Executive of, or a
                           guilty or nolo contendere plea by Executive with
                           respect to, any crime punishable as a felony; or any
                           bar against Executive from serving as a director,
                           officer or executive of any firm the securities of
                           which trade publicly.

                           Specifically excluded from Cause shall be Executive's
                  refusal to relocate outside Executive's present city of
                  residence.

                           Executive's termination for Cause shall be determined
                  in good faith by and in the sole discretion of HFC's Chief
                  Executive Officer and/or his designee (with such designee
                  being a corporate officer of HFC).

                           In the event of termination pursuant to subparagraph
                  2.01(c)(iii), (iv) or (v), Executive's termination shall be
                  immediate upon the giving of written notice to Executive.
                  However, in the event of termination pursuant to subparagraph
                  2.01(c)(i) or (ii), HFC's Chief Executive Officer will provide
                  Executive written notice (the "Cause Notice") of proposed
                  termination which provides (1) reasonable detail as to the
                  cause or causes asserted by HFC and upon which the Cause
                  Notice is based, and (2) notification of a certain period of
                  time from receipt of such Cause Notice within which he shall
                  have the opportunity to cure the performance or conduct upon
                  which the Cause Notice is based, to the satisfaction of HFC's
                  Chief Executive Officer. If after the completion of the
                  designated cure period HFC's Chief Executive Officer
                  determines, in his sole discretion, that Executive has failed
                  to cure the performance or conduct, Executive will be given
                  written notice of his termination and Executive's employment
                  will terminate immediately upon the giving of such notice to
                  Executive.

                  (d)      May be terminated upon Executive's inability to
                  perform the essential functions of his position due to
                  physical or mental disability, with or without reasonable
                  accommodation, as determined in the good faith judgment of the
                  HFC's Chief Executive Officer, or as may otherwise be required
                  by applicable law.

                  (e)     Shall terminate at the end of the month during which
                  Executive reaches the normal retirement date established by
                  HFC for senior management employees of

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<PAGE>

                  HFC, but in no event earlier than the compulsory retirement
                  age permitted under federal or similar law for senior
                  management employees.

                  (f)   May be terminated by Executive for any reason on
                  ninety (90) days' written notice to HFC.

                  (g)   May be terminated by HFC at any time, for any reason,
                  upon written notice to Executive.

         2.02     Compensation Upon Termination of Executive's Employment.  In
the event that Executive's employment with HFC terminates the following
provisions shall govern as applicable:

                  (a)   If termination occurs pursuant to subparagraph 2.01(a),
                  (b), (c), (d), (e), or (f), Executive's receipt of annual base
                  salary and fringe benefits shall terminate as of the date of
                  termination or as required by law, unless the parties agree in
                  writing otherwise. If termination occurs pursuant to
                  subparagraph 2.01(d), Executive acknowledges and agrees that
                  his receipt of salary compensation between the date of
                  disability and date of termination shall be governed by HFC's
                  employee benefit programs, as may be amended from time to
                  time, to the extent Executive is eligible to participate in
                  such programs.

                  (b)   If termination occurs pursuant to subparagraph 2.01(g),
                  Executive's receipt of annual base salary and fringe benefits
                  shall terminate as of the date of termination or as required
                  by law. However, Executive shall receive as separation pay the
                  equivalent of 4 months of his then current annual base salary.
                  Any separation pay due to Executive under this subparagraph
                  2.02(b) shall be payable to Executive, at the sole discretion
                  of HFC, either in a lump sum or in installments in accordance
                  with HFC's standard payroll practices. Executive shall be
                  required to execute a general release of any and all claims in
                  favor of HFC in exchange for his receipt of separation pay
                  under this subparagraph 2.02(b).

                  (c)   All payments made to Executive under this Paragraph 2.02
                  shall be reduced by amounts (i) required to be withheld in
                  accordance with federal, state and local laws and regulations
                  in effect at the time of payment, or (ii) owed to HFC by
                  Executive for any amounts advanced, loaned or misappropriated
                  in accordance with applicable law.

                                   ARTICLE III

                         PROTECTION OF TRADE SECRETS AND
                           CONFIDENTIAL BUSINESS DATA

         3.01.    Confidential Information. For the purposes of this Agreement,
"Confidential Information" means any information not generally known to the
public and proprietary to HFC and includes, without limitation, trade secrets,
inventions, and information pertaining to research, development, purchasing,
marketing, selling, accounting, licensing, business systems, business

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techniques, site processes and manuals, customer lists, prospective customer
lists, price lists, fee schedules, business strategies and plans, information
pertaining to the benefits HFC provides to its customers and employees, pending
patentable materials and/or designs, design documentation, documentation of
meetings, tests and/or test standards, employee compensation, or manuals whether
in document, electronic, computer or other form. For example, Confidential
Information may be contained in HFC's customer lists, prospective customer
lists, the particular needs and requirements of customers, the particular needs
and requirements of prospective customers, and the identity of customers or
prospective customers. Information shall be treated as Confidential Information
irrespective of its source and any information which is labeled or marked as
being "confidential" or "trade secret" shall be presumed to be Confidential
Information. The definition of "Confidential Information" is not intended to be
complete. From time to time during the term of his employment, Executive may
gain access to other information not generally known to the public and
proprietary to HFC concerning HFC's business that is of commercial value to HFC,
which information shall be included in the definition of "Confidential
Information" above, even though not specifically listed in that definition. The
definition of Confidential Information and the provisions of this Article III
apply to any form in which the subject information, trade secrets, or data may
appear, whether written, oral, or any other form of recording or storage.

         3.02   Maintain in Confidence. Executive shall hold the Confidential
Information, including trade secrets and/or data, in the strictest confidence
and will never, without prior written consent of HFC, (directly or indirectly)
disclose, assign, transfer, convey, communicate to or use for his own or
another's benefit or (directly or indirectly) disclose, assign, transfer,
convey, communicate to or use by him, a competitor of HFC or any other person or
entity, including, but not limited to, the press, other professionals,
corporations, partnerships or the public, at any time during his employment with
HFC or at any time after his termination of employment with HFC, regardless of
the reason for the Executive's termination, whether voluntary or involuntary.
Executive further promises and agrees that he will faithfully abide by any
rules, policies, practices or procedures existing or which may be established by
HFC for insuring the confidentiality of the Confidential Information, including,
but not limited to, rules, policies, practices or procedures: (a) limiting
access to authorized personnel; (b) limiting copying of any writing, data or
recording; (c) requiring storage of property, documents or data in secure
facilities provided by HFC and limiting safe or vault lock combinations or keys
to authorized personnel; and/or (d) checkout and return or other procedures
promulgated by HFC from time to time.

         3.03   Return of Information/Property. Upon termination of the
employer-employee relationship, whether voluntary or involuntary, Executive will
return to HFC any and all written or otherwise recorded form of all Confidential
Information (and any copies thereof) in his possession, custody or control,
including, but not limited to, notebooks, memoranda, specifications, customer
lists, prospective or potential customer lists, or price lists, and will take
with him, upon leaving HFC's place of business or employment with HFC, no such
documents, data, writings, recordings, or reproduction in any form which may
have been entrusted or obtained by him during the course of his employment or to
which he had access, possession, custody or control, except with HFC express,
written permission. Upon termination of employment, whether voluntary or
involuntary, Executive will deliver to HFC all Confidential Information in
recorded form in his possession, custody or control. Moreover, in the event of
termination of Executive's employment all corporate documents, records, files,
credit cards, computer disks and tapes, computer access cards, codes and

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keys, file access codes and keys, building and office access cards, codes and
keys, materials, equipment and other property of HFC which is in Executive's
possession shall be returned to HFC at its principal business offices on the
date of termination of Executive's employment, or within five business days
thereafter if termination occurs without notice. Executive may copy, at
Executive's expense, documents, records, materials and information of HFC only
with HFC's express, written permission.

         3.04   Irreparable Harm. The parties acknowledge that HFC will suffer
irreparable harm if the Executive breaches Paragraphs 3.02 or 3.03, either
during or after his employment. Accordingly, HFC shall be entitled, in addition
to any other right and remedy they may have, at law or equity, to a temporary
restraining order and/or injunction, without the posting of a bond or other
security, enjoining or restraining the Executive from any violation of
Paragraphs 3.02 or 3.03, and the Executive hereby consents to HFC's right to
seek the issuance of such injunction. If HFC institutes any such action against
Executive, alone or in conjunction with any third party or parties to enforce
any terms or provisions of Paragraphs 3.02 or 3.03, then the party that prevails
in such action shall be entitled to receive from the opposing party (or parties)
in the action the prevailing party's reasonable attorneys' fees incurred in such
action and all costs and expenses incurred in connection therewith in accordance
with Paragraph 7.07.

                                   ARTICLE IV

                                NON-SOLICITATION

         4.01   Non-Solicitation Agreement. During Executive's employment with
HFC and for a period of one (1) year (or shorter period as provided for in
Paragraph 4.02) after his employment with HFC ends for whatever reason
(voluntary or involuntary), Executive shall not,

                           (a)    solicit HFC's current or former customers or
                  potential or prospective customers on behalf of himself or any
                  other business, person or entity for the purpose of selling,
                  offering, providing or otherwise making available products or
                  services that are the same as or similar to those products and
                  services that were offered by HFC at any time during
                  Executive's employment with HFC;

                           (b)    exploit or use contacts, developed or made
                  during his employment with HFC, for the purpose of soliciting
                  HFC's current or former customers or potential or prospective
                  customers on his behalf or the behalf of any other business,
                  person or entity for purpose of selling, offering, providing
                  or otherwise making available products or services that are
                  the same as or similar to those products and services that
                  were offered by HFC at any time during Executive's employment
                  with HFC; or

                           (c)    directly or indirectly, induce or attempt to
                  induce, any of HFC's then current employees or independent
                  contractors to terminate their employment, contractual or
                  other relationship with HFC, or otherwise interfere or attempt
                  to interfere with that existing employment or other
                  relationship with HFC.

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         4.02   Duration of Restrictions. Notwithstanding Paragraph 4.01 of this
Agreement, in the event Executive's employment terminates pursuant to
subparagraph 2.01(g) of this Agreement, the restriction against solicitation
contained in Subparagraphs 4.01(a) and 4.01(b) shall be in effect during
Executive's employment with HFC and shall continue following termination for the
period of time equal to the number of months separation pay received by
Executive, regardless of whether such separation pay is paid in a lump sum or in
installments.

         4.03   Non-Disparagement. During Executive's employment with HFC and at
all times thereafter, Executive shall not disparage or defame, or allow or cause
others to disparage or defame, HFC, its Board of Directors, directors, officers,
employees, customers, or vendors.

         4.04   Irreparable Harm. The parties acknowledge that HFC will suffer
irreparable harm if Executive breaches Paragraph 4.01 or 4.03. Accordingly, HFC
shall be entitled, in addition to any other right and remedy they may have, at
law or equity, to a temporary restraining order and/or injunction, without the
posting of a bond or other security, enjoining or restraining Executive from any
violation of Paragraph 4.01 or 4.03 and Executive hereby consents to HFC's right
to seek the issuance of such injunction. If HFC institutes any such action
against Executive, alone or in conjunction with any third party or parties to
enforce any terms or provisions of Paragraph 4.01 or 4.03 then the party that
prevails in such action shall be entitled to receive from the opposing party (or
parties) in the action the prevailing party's reasonable attorneys' fees
incurred in such action and all costs and expenses incurred in connection
therewith in accordance with Paragraph 7.07.

         4.05   Limit to Extent Enforceable. In the event that a court of
competent jurisdiction determines that any of the provisions of Paragraph 4.01
or 4.03 are unreasonable, it may limit such provision to the extent it deems
reasonable, without declaring the provision of Paragraph 4.01 or 4.03 invalid in
its entirety. This provision shall not be construed as an admission by HFC, but
is only included to provide HFC with the maximum possible protection for its
business, Confidential Information, trade secrets and data, consistent with the
right of Executive to earn a livelihood subsequent to the termination of his
employment.

         4.06   Survival of Provisions. The parties agree that the provisions in
this Article IV shall survive termination of this Agreement and termination of
Executive's employment for any reason.

                                    ARTICLE V

                                   INVENTIONS

         5.01   Invention. For purposes of this Agreement, the term "Invention"
means ideas, discoveries, and improvements whether or not shown or described in
writing or reduced to practice and whether patentable or not, relating to any of
HFC's present or future sales, research, or other business activities, or
reasonably foreseeable business interests of HFC.

         5.02   Disclosure. Executive shall promptly and fully disclose to HFC
and will hold in trust for HFC sole right and benefit any invention which
Executive, during the period of his employment, makes, conceives, or reduces to
practice or causes to be made, conceived, or reduced to practice either alone or
in conjunction with others that: (a) relates to any subject matter

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<PAGE>

pertaining to Executive's employment; (b) relates to or is directly or
indirectly connected with the business, products, projects, or Confidential
Information of HFC; or (c) involves the use of any time, material, or facility
of HFC.

         5.03   Assignment of Ownership. Executive hereby assigns to HFC all of
Executive's right, title, and interest in and to all such inventions as
described in Paragraph 5.02 and, upon HFC's request, Executive shall execute,
verify, and deliver to HFC such documents including, without limitation,
assignments and applications for Letters Patent, and shall perform such other
acts, including, without limitation, appearing as a witness in any action
brought in connection with this Agreement that is necessary to enable HFC to
obtain the sole right, title, and benefit to all such inventions.

         5.04   Excluded Inventions. It is further agreed, and Executive is
hereby so notified, that the above agreement to assign inventions to HFC does
not apply to any invention for which no equipment, supplies, facility, or
Confidential Information of HFC was used, which was developed entirely on
Executive's own time, and (a) which does not relate: (i) directly to the
business of HFC; or (ii) to HFC's actual or demonstrably anticipated research or
development; or (b) which does not result from any work performed by Executive
for HFC.

         5.05   Prior Inventions. Attached to this Agreement and initialed by
both parties is a list of all of the inventions, by description, if any, in
which Executive possesses any right, title, or interest prior to this employment
and the execution of this Agreement, which are not subject to the terms of this
Agreement.

         5.06   Specific Performance; Attorney Fees. Executive expressly
acknowledges and agrees that any violation of any terms of Paragraphs 5.02 or
5.03 may result in the issuance of a temporary restraining order and/or
injunction against Executive to effect specific performance of the terms of
Paragraphs 5.02 or 5.03. If HFC institutes any action against Executive, alone
or in conjunction with any third party or parties, to enforce any term or
provision of Paragraphs 5.02 or 5.03, then the party that prevails in such
action shall be entitled to receive from the opposing party (or parties) in the
action the prevailing party's reasonable attorneys' fees incurred in such action
and all costs and expenses incurred in connection therewith in accordance with
Paragraph 7.07.

                                   ARTICLE VI

                                   ARBITRATION

         6.01   Agreement to Arbitrate. With the exception of HFC's right to
seek injunctive relief in connection with breaches by Executive of any provision
of Articles III, IV and/or V of this Agreement, all disputes or claims arising
out of or in any way relating to this Agreement, including the making of this
Agreement, shall be submitted to and determined by final and binding arbitration
before the American Arbitration Association ("AAA") under the AAA's National
Rules for the Resolution of Employment Disputes. The award of the arbitrator(s),
or a majority of them, shall be final and judgment upon such award may be
entered in any court of competent jurisdiction. This arbitration provision shall
continue in full force and effect after Executive's termination of employment
under this Agreement.

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         6.02   Discovery. In addition to any other procedures provided for
under the rules of the AAA, upon written request, each party shall, at least 14
days prior to the date of any hearing, provide to the opposite party a copy of
all documents relevant to the issues raised by any claim or counterclaim and a
list of all witnesses to be called by that party at the hearing and each party
shall be permitted to take at least one deposition at least 14 days prior to any
hearing.

         6.03   Costs.  The costs of proceedings under Article VI shall be paid
in accordance with the provisions of Article VII below.

                                   ARTICLE VII

                                  MISCELLANEOUS

         7.01   Governing Law.  This Agreement shall be governed according to
the laws of the State of Minnesota, without reference to its conflict of laws
provisions.

         7.02   Captions. The captions set forth in this Agreement are for
convenience only and shall not be considered as part of this Agreement or as in
any way limiting or amplifying the terms and conditions hereof.

         7.03   No Conflicting Obligations. Executive represents and warrants to
HFC that he is not under, or bound to be under in the future, any obligation to
any person, firm, or corporation that is or would be inconsistent or in conflict
with this Agreement or would prevent, limit, or impair in any way the
performance by him of his obligations hereunder. Specifically, but without
limiting the generality of the foregoing, Executive warrants and represents to
HFC that he is not currently bound and will not be bound in the future by any
confidentiality agreements and/or restrictive covenants that may and/or will
restrict his ability to perform his duties hereunder. Moreover, Executive agrees
that he will not enter into any confidentiality agreements and/or restrictive
covenants during his employment with HFC that may or will restrict his ability
to perform his duties hereunder, with the exception of any confidentially
agreements and/or restrictive covenants entered into by and between Executive
and HFC.

         7.04   Successors. This Agreement is personal to Executive and
Executive may not assign or transfer any part of his rights or duties hereunder,
or any compensation due to him hereunder, to any other person. This Agreement
may be assigned by HFC. This Agreement is binding on any successors or assigns
of HFC.

         7.05   Waiver. The waiver by any party of the breach or nonperformance
of any provision of this Agreement by any other party will not operate or be
construed as a waiver of any future breach or nonperformance under any provision
of this Agreement or any similar agreement with any other employee.

         7.06   Survival of Provisions. Executive acknowledges and agrees that
the restrictions and obligations set forth in Articles III, IV, and V of this
Agreement are reasonable, shall survive his resignation from employment or the
termination of his employment, and shall apply to

                                      -10-

<PAGE>

Executive whether his resignation or termination is voluntary or involuntary and
regardless of the reason for such resignation or termination.

         7.07   Notices. Any and all notices referred to herein shall be deemed
properly given only if in writing and delivered personally or sent postage
prepaid, by certified mail, return receipt requested, as follows:

                  (a)   To HFC by notice to the Chief Executive Officer

                  (b)   To Executive at his home address as it then appears on
                  the records of HFC, it being the duty of the Executive to keep
                  HFC informed of his current home address at all times.

The date on which notice to HFC or Executive shall be deemed to have been given
if mailed as provided above shall be the date on the certified mail return
receipt. Personal delivery to Executive shall be deemed to have occurred on the
date notice was delivered to Executive personally or deposited in a mail box or
slot or left with security or administrative personnel, at Executive's residence
by a representative of HFC or any messenger or delivery service.

         7.08   Payment of Fees and Expenses. If any party initiates or becomes
a party to a formal proceeding in law or equity, or under Article VI, involving
this Agreement, and if either party obtains a substantial portion of the relief
requested by that party (the "prevailing party"), then the non-prevailing party
shall pay all of its and the prevailing party's reasonable costs and expenses,
including reasonable attorneys' fees and expenses, incurred with respect to such
proceeding. If neither party obtains a substantial portion of the relief
requested each shall bear its/his own expenses. In the event Executive is
terminated pursuant to Paragraph 2.01(c) and determines to challenge HFC's
determination of Cause, HFC and Executive shall each bear its/his own expenses
in connection with any proceeding initiated by Executive with respect to the
determination as to "Cause."

         7.09   Term. This Agreement shall be effective from the date written
above and shall continue until terminated in accordance with the provisions set
forth in this Agreement.

         7.10   Modification. This Agreement supersedes any and all prior oral
and written understandings, if any, between the parties relating to the subject
matter of this Agreement. This Agreement sets forth the entire understandings
and agreements between and among the parties and is the complete and exclusive
statement of the terms and conditions thereof, that there are no other written
or oral agreements in regard to the subject matter of this Agreement other than
those agreements, plans, programs and policies expressly referred to herein.
This Agreement shall not be changed or modified except by a written document
signed by the parties hereto. It is expressly understood that this Agreement
supersedes the "HFC Retention Program" between Employer and Executive dated
November 9, 1999 and as such the HFC Retention Program is null and void.

         7.11   Counterparts. More than one counterpart of this Agreement may be
executed by the parties hereto, and each fully executed counterpart shall be
deemed an original.

                                      -11-

<PAGE>

                                       HEALTH FITNESS CORPORATION

Date:    August 13, 2001               By       /s/  Jerry V. Noyce
       --------------------                -------------------------------------
                                                Jerry V. Noyce
                                       Its:     Chief Executive Officer

Date:    August 13, 2001                        /s/  David Hurt
       --------------------                -------------------------------------
                                                David Hurt

                                      -12-

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