EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Agreement is entered effective the 1st day of April. 2001 by and between
United Heritage Corporation, a Utah corporation ("UHCP") National Heritage
Sales Corporation a Texas corporation ("Heritage"), and Xxxx Xxxxxx, an
individual (the "Employee")
RECITALS
WHEREAS, UHCP and the Employee entered into a prior Consulting Agreement dated
July 18, 2000 ("Prior Agreement")
WHEREAS, the parties desire to terminate the Prior Agreement and enter into an
employment agreement;
WHEREAS, the partied desire to enter into this Agreement pursuant to which
Heritage shall employ the Employee;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are acknowledged, the partied agree as follows:
1. Employment. During the term of this Agreement, the Employee shall be employed
as the President and Chief Executive Officer of Heritage. The Employee shall be
based at Heritage's headquarters in Cleburne, Texas, although he may also
perform his duties at other locations acceptable to Heritage. His duties shall
include (a) providing advise when reasonably requested by Heritage with respect
to marketing Heritage's meat products (the ("Products") to grocery chains and
other purchasers, wholesale or retail, of Products, (b) coordinating all
activities surrounding the buying, preparing, packaging and shipping of
National's Products, and (c) negotiating all sales of Products to food stores
and through food brokers. The Employee shall be subject to oversight by
Heritage's Board of Directors. The Employee shall bear his own expenses provided
however that the Employee's travel expenses incurred at the request of Heritage
and for its exclusive benefit shall be reimbursed by Heritage. Other travel
expenses incurred by the Employee in pursuit of sales, either directly or by
brokers, shall be paid and borne by the Employee.
2. Compensation. As the exclusive compensation for the services of the Employee
to be furnished under this Agreement, UHCP grants to the Employee an option to
purchase 510,000 shares of the common stock, $0.001 par value per share, to be
issued by it at an exercise price of $1.50 per share. These options shall be
exercisable as described below. The first installment of 210,000 options (i.e.,
options to purchase 210,000 shares) shall vest upon execution of this Agreement,
and an additional 150,000 options shall vest on each of the first and second
anniversary of the effective date of this Agreement. All unexercised options
shall expire on the fifth anniversary of the effective date of this Agreement.
All options not previously exercisable shall become exercisable immediately if
(a) Xxxxxx X. Xxxx, persons controlled by him and his wife, brothers and his and
their children and grandchildren are no longer entitled to elect a majority of
the members of the Board of Directors
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of UHCP, or (b) UHCP to ceases to hold a majority of the outstanding common
stock issued by Heritage.
UHCP agrees to use its best efforts to cause the shares of its common stock
issued upon exercise of the options to be registered under the Securities Act of
1933, as amended, on Form S-8. In the event that this registration is
unavailable, the Employee and UHCP agree to use their best efforts to cause
these shares to be registered under the Securities Act of 1933, as amended, or
issued pursuant to an exemption from this registration requirement. The Employee
shall be paid damages arising if UHCP fails to register these securities as
described in this Section 2 for a period of one-hundred, twenty (120)
consecutive days or longer.
The Employee shall not be paid any cash compensation for his services.
3. Term. Either party to this Agreement may terminate the Agreement by written
notice delivered to the other at least 90 days but no more than 180 days prior
to the effective date of the termination. In addition, this Agreement shall
terminate immediately upon the death, or "disability" of the Employee or the
commission of any act that constitutes "cause". As used herein, "disability"
shall mean the inability of the Employee to perform substantially all of his
duties under this Agreement for a period of one-hundred twenty (120) consecutive
days, as determined by a doctor of medicine board-certified in a medical
specialty related to the cause of the disability. "Cause" shall mean (a) the
Employee's commission of any fraudulent or deceptive act in the course of his
employment, (b) the Employee undertakes any acts that reflect any unfavorably,
upon Heritage or UHCP in a materiel respect or (a) the Employee commits an act
punishable as a felony.
Upon termination of the Agreement by Heritage other than for cause all stock
options shall remain in effect. Upon termination by the Employee, all
unexercised options (whether vested or not) shall immediately terminate.
Termination for cause also terminates all stock options granted hereunder
regardless of whether then exercisable.
4. Confidentiality. The Employee covenants and agrees that (a) all information
relating to the production of Products (including contents, recipes, marinates,
marinating techniques, etc.) shall remain the property of UHCP and Heritage, and
(b) neither the Employee nor MC Development LLC, an entity controlled by the
Employee ("Development"), shall disclose to any other person any propriety or
confidential information relating to the Products or use or employ this
information for the benefit of the Employee, Development or any other person.
5. Public Company. The Employee acknowledges that he has been advised that UHCP
is a corporation with publicly traded common stock and he shall be deemed an
"officer" of UHCP subject to the provisions of Section 16 of the Securities
Exchange Act of 1934, as amended, binding the legal obligations relating to
reporting of transaction and the divestiture of "short - swing" profits.
6. Miscellaneous. This Agreement shall be governed by the laws of the State of
Texas. Exclusive venue and jurisdiction for any disputes arising under this
Agreement shall be with courts of competent jurisdiction sitting in Xxxxxxx
County, Texas. All notices required under
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this Agreement shall be in writing and shall be delivered to the most recent
address known to the other party.
7. Prior Agreement. Effective April 1, 2001, the Prior Agreement shall be
superceded by this Agreement and all stock options granted under the Prior
Agreement shall terminate unexercised.
EXECUTED as of the date first written above.
/s/ Xxxx Xxxxxx
_________________________
XXXX XXXXXX
UNITED HERITAGE CORPORATION
By: /s/ Xxxxxx X. Xxxx
_____________________________
Xxxxxx X. Xxxx, Chairman of the Board
NATIONAL HERITAGE SALES
CORPORATION
By:/s/ Xxxxxx X. Xxxx
____________________________
Xxxxxx X. Xxxx, Chairman of the Board
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AMENDED AND RESTATED LETTER AGREEMENT
As of April 1, 2001
MC Development LLC
0000 Xxxxx Xxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxxxxxx, XX 00000
Gentlemen:
National Heritage Sales Corporation ("Heritage") prepares and packages
certain marinated and non-marinated meat products under the trademarks
"Heritage" "Heritage Lifestyle" and other related marks (collectively, the
"Products") for sale to grocery stores, other vendors, brokers and consumers.
M.C. Development LLC ("Development") has knowledge of the retail grocery
business that will assist Heritage in the marketing of its Products. This
Agreement will confirm the agreement between Heritage and Development relating
to the sale of the Products.
1. Rights. Development shall have the right to market Products in the
United States. Development shall initiate contact with purchasing and other
representatives of food stores and will make such presentations, tastings, and
other promotional activities at its expense as it deems appropriate to market
the products to these stores. Heritage shall commit inventory and other
resources, as it deems appropriate to assist Development in its efforts under
this Agreement. All efforts by Heritage shall be at its expense. Notwithstanding
anything herein to the contrary, the marketing services provided by Development
shall not include the services provided by Xxxx Xxxxxx under that Employment
Agreement, of even date, with National and its parent, United Heritage
Corporation.
2. Standard of Conduct. Development shall market the Products using
information, data and marketing material furnished by Heritage, and Development
shall not use any other material unless first approved by Heritage. All pricing
and terms quoted by Development shall be from lists established by Heritage, and
no other pricing and terms shall be quoted by Development without Heritage's
prior written consent. In all matters, Development shall act as an independent
contractor and not as employee or servant of Heritage. All expenses incurred by
Development in connection with this Agreement shall be paid and borne by
Development. Development and its representatives shall at all times comport
themselves in a manner reasonably expected to reflect favorably upon Heritage.
3. Commissions. During the terms of this Agreement, Heritage shall pay to
Development commissions (the "Commissions") equal to $0.10 per pound (packaged
weight) of all marinated Products sold to stores located in California and
$0.03 per pound (packaged weight) of marinated Products sold to stores located
outside of California. Also, Heritage shall pay to Development Commissions equal
to $0.05 per pound (packaged weight) of all non-marinated Products sold,
regardless of location. The Commission shall be made by Heritage when it
receives payment from the Products from the purchaser.
Page 1 of 3
4 Payments. In addition to the Commissions, Heritage shall make monthly
payments to Development in the amount of Seven Thousand ($7,000.00). These shall
be paid in arrears on the fifth (5th) day of each month.
5. Termination. Either party to this Agreement may terminate the
Agreement by written notice delivered to the other at least 90 days but no more
than 180 days prior to the effective date if the termination. Upon termination
of the Agreement by Heritage, Development shall be entitled to receive all
Commission previously accrued and Commission computed in the manner provided in
Section 3 for all sales to all stores to which sales were made during the 180
days preceding the effective date of the date of termination and for a period of
up to two (2) years thereafter, but only if Development continues to market
sales by Heritage to those stores. Upon termination by Development, it shall not
be paid any Commission for sales arising after the date of termination. Payments
under Section 4 shall accrue and be paid through the date of termination and
shall then terminate.
6. Subcontractors. Development shall have the option of retaining
subcontractors to perform some or all of the duties of Development under this
Agreement. Heritage shall have the right to demand the immediate removal of
each subcontractor for reasonable cause. Development shall cause all
subcontractors to comply with the terms and provisions of this Agreement
applicable to Development.
7. Indemnity. Development shall indemnify and hold Heritage harmless
from any losses or damages (including uncollectible accounts receivable created
by Development or any subcontractor in violation of this Agreement, lost
profits, and injury to name and reputation) caused by any conduct by
Development or one or more subcontractors that is in violation of the terms and
provisions of this Agreement applicable to Development.
8. Miscellaneous. This Agreement shall be governed by the laws of the
State of Texas. Exclusive venue and jurisdiction for any disputes arising under
this Agreement shall be with courts of competent jurisdiction sitting in Xxxxxxx
County, Texas. All notices required under this Agreement shall be in writing and
shall be delivered to the most recent address known to the other party. This
Agreement amends and restates that certain Letter Agreement dated July 18, 2000,
between Heritage and Development, effective April 1, 2001.
Executed as of the date first written above.
NATIONAL HERITAGE SALES CORPORATION
By: /s/ Xxxxxx X. Xxxx
---------------------------------
Xxxxxx X. Xxxx, Chairman of the Board
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AGREED AND ACCEPTED:
M. C. DEVELOPMENT
By: /s/ Xxxx Xxxxxx
___________________
Member
