Exhibit 10.19
EMPLOYMENT AGREEMENT
THIS AGREEMENT dated February 11, 2003 between Integrated Health
Technologies, Inc., a Delaware corporation, with offices at 000 Xxxxx 00,
Xxxxxxxx, Xxx Xxxxxx 00000, ("Corporation"), and Xxxxx X. Xxxxxx ("Employee").
WHEREAS, the Corporation is in the business of manufacturing, marketing
and selling vitamins and nutritional supplements; and
WHEREAS, Corporation desires to employ Employee, and Employee desires
to be so employed, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises and the terms
and conditions hereinafter set forth, the parties agree as follows:
1. Employment. The Corporation agrees to employ the Employee, and the Employee
agrees to be so employed by the Corporation, in the capacity of Vice President
of Corporate Development and Communications. Effective February 24, 2003 (the
"Commencement Date") and shall continue until December 31, 2004 (the "Expiration
Date") or the earlier termination of this Agreement in accordance with Section 5
below (the thereafter until termination of your employment.
2. Duties. Employee will have responsibility for all acquisitions, corporate
development, and communications. And will report directly to the Chief Executive
Officer of the Corporation (the "CEO") or the Chairman of the Board. During the
term of your employment, the employee will be expected to be a full time
employee of the corporation, and the employee will not engage or participate in
any business that is competitive with the business of the corporation. The
Employee will also serve on the advisory board to the board of directors,
employee stock option committee and will be present and available at all board
meetings for advice. The Employee will also be expected to comply with and be
bound by the Corporation's operating policies, procedures and practices adopted
by the Corporation and in effect from time to time during the term of your
employment.
3. Compensation:
(a) Salary. Employee initial annual base salary retroactive to the
Commencement Date will be $100,000. Your annual base salary will be payable in
accordance with the Corporation normal payroll practices with such payroll
deductions and withholdings as are required by law. Your base salary will be
reviewed on an annual basis by the Compensation Committee of the Board of
Directors of Corporation (the "Board") and may be increased (but not decreased)
from time to time, in the discretion of the Compensation Committee of the Board
Employee's.
(b) Stock Compensation. Employee shall be entitled to participate in
the Corporation's qualified and non qualified stock option plans ("Plans")
during each full year during the term of this Agreement (the "Stock
Compensation") on a basis commensurate with his salary and considering the
amount of stock awarded to other management employees.
(c) Benefits. During each contract year of the term of this Agreement,
Employee shall receive such other benefits as are available to other senior
executives of the Corporation.
(d) Office. During the term of this agreement the Corporation will
reimburse the employee for his cost of an office in Denver, Colorado not to
exceed $2,000 per month.
(e) Expenses. The Corporation will reimburse the actual and reasonable
costs of your travel expenses between the Corporation's offices and on all
business related trips. If all or any portion of the amounts payable to you or
on your behalf under this Section (e) become or otherwise are subject to federal
or state income taxes, the Corporation shall pay to the employee an amount
necessary to place the employee in the same after-tax position as you would have
been in had no such taxes been imposed. The determination of the amount of any
such tax indemnity shall be made by the independent accounting firm employed by
the Corporation, which amount shall be increased or decreased to reflect the
results of any final determination by taxing authorities in any administrative
or judicial action, and shall include any expenses reasonably incurred by the
employee in defending same. The amount payable pursuant to this paragraph shall
be increased to the extent necessary to pay any interest and penalties
determined to be due, and shall be grossed up for the income tax due on the
aggregate reimbursement. Amounts due shall be paid within ten (10) days after
demand by you.
(f) Signing Bonus. The employee is entitled to a signing bonus of
$15,000 at the signing of this contract.
5. Termination During Employment Term. Your employment with the Corporation will
be at will and may be terminated by the employee or by the Corporation at any
time for any reason as follows:
(a) The employee may terminate your employment upon written notice to the Board
at any time following an event constituting "Good Reason" (as defined below), if
following such event, the event constituting Good Reason is not cured by the
corporation within 10 days after your notice to the Board requesting that such
event be cured (an "Involuntary Termination");
(b) the employee may terminate your employment upon written notice to the Board
at any time in your discretion without Good Reason ("Voluntary Termination");
(c) The Corporation may terminate your employment upon written notice to you at
any time following a determination by the Board that there is "Cause" (as
defined below) for such termination ("Termination for Cause");
(d) The Corporation may terminate your employment upon written notice to you at
any time in the sole discretion of the Board without a determination that there
is Cause for such termination ("Termination without Cause");
(e) Your employment will automatically terminate upon your death or upon your
disability as determined by the Board ("Termination for Death or Disability");
provided that "disability" will mean your complete inability to perform your job
responsibilities for a period of 120 consecutive days or 120 days in the
aggregate in any 12-month period.
6. Definitions. As used in this agreement, the following terms have the
following meanings:
(a) "Good Reason" means the occurrence of any of the following conditions,
without your written consent:
(i) your no longer serving as Vice President of the Corporation or its
ultimate parent corporation and reporting to the CEO or Chairman of the
Corporation or such ultimate parent, as the case may be; (ii) any
material breach of this letter agreement by the Corporation, including
any reduction in your cash compensation or reimbursements; or (iii)
Corporation's requiring you to be based at any office or location more
than 60 miles from Boulder, Colorado or corporation's current
headquarters in Hillside, New Jersey.
(b) "Cause" means:
(i) the willful engaging by you in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the
Corporation. For purposes of this provision, no act or failure to
act, on the part of you, shall be considered "willful" unless it
is done, or omitted to be done, by you in bad faith without
reasonable belief that your action or omission was in the best
interests of the Corporation. Any act, or failure to act, based
upon authority given pursuant to a resolution duly adopted by the
Board or based upon the advice of counsel for the Corporation
shall be conclusively presumed to be done, or omitted to be done,
by you in good faith and in the best interests of the Corporation.
7. Separation Benefits. Upon termination of your employment with the Corporation
for any reason, you will receive payment for all unpaid salary and vacation
accrued to the date of your termination of employment; any bonus that has been
earned but not paid; and your benefits will be continued under the Corporation's
then existing benefit plans and policies for so long as provided under the terms
of such plans and policies or as required by applicable law. In addition, the
following provisions will apply depending on the basis of your termination of
employment:
(a} In the event of your Voluntary Termination or Termination for Cause, the
employee will not be entitled to any cash severance benefits (except the amounts
as set forth above)
(b) In the event of your Involuntary Termination, Termination for Death or
Disability, or Termination without Cause, subject to your execution (or the
execution by your executor or personal representative in the case of your death)
of the acknowledgement, you will be entitled to a severance payment equal to the
sum of the length left on your employment agreement
(c) No payments due you under this letter agreement will be subject to
mitigation or offset.
8. Indemnification Agreement. Upon your commencement of employment with the
Corporation, the Corporation will enter into its standard form of
indemnification agreement for officers and directors to indemnify you against
certain liabilities you may incur as a Vice President of the Corporation.
9. Restrictive Covenants.
(a) Proprietary Property. Employee acknowledges that in the course of his
employment with the Corporation, the Corporation will provide Employee with, or
access to, memoranda, files, records, trade secrets and other proprietary
information and property of the Corporation, including information regarding the
Corporation and operations, market structures, processes, data, programs,
inventions, techniques, marketing plans, strategies, forecasts, new products,
systems, financial information, budgets, projections, licenses, prices, costs,
and customer supplier lists (collectively the "Proprietary Property") as is
necessary or desirable to assist Employee in the performance of his employment
duties hereunder. Employee acknowledges that the Proprietary Property, and all
information and intellectual property and other data developed by trademarks,
copyrights, ideas, creations, and properties (also hereafter included in the
term "Proprietary Property"), is the sole and exclusive property of the
Corporation, to the extent not available to the public at large. Employee shall
have no right, title or interest of any kind or nature in the Proprietary
Property or any proceeds thereof. Employee covenants and agrees that he shall
not directly or indirectly, during the term of this Agreement or thereafter,
communicate or divulge to, or use for the benefit of himself or any other person
or entity without the prior written consent of its owner, any Proprietary
Property or any information in any way relating to the Proprietary Property. The
Proprietary Property shall remain the sole and exclusive property of the
Corporation, as the case may be, and upon termination of this Agreement,
Employee shall immediately thereupon return all Proprietary Property in his
possession or control to the Corporation.
(b) Employment and Post-Employment Restriction. Employee hereby covenants and
agrees that during the term of his employment hereunder, and for a period of one
(1) year after the date of any termination of his employment with the
Corporation in the event he is terminated for Cause or voluntarily leaves prior
to the end of the Employment Term, he shall not, directly or indirectly, be
engaged in any other commercial activities or pursuits whatsoever which may in
any way be in competition with or in any conflict with the business affairs of
the Corporation in any market or geographic area in which the Corporation is
then doing business. Employee further covenants and agrees that for one (1) year
after the date of termination of his employment hereunder (for any reason) he
shall not, directly or indirectly, pursue any party that was a customer of the
Corporation on the date of that termination for the purpose of soliciting and/or
providing to any of those customers any products, goods, or services of the
nature and type sold by the Corporation. For purposes of the preceding sentence-
a "customer" of the Corporation includes (a) any person which the Corporation
has actually contacted for the purpose of obtaining an order for its products,
goods or services and which the Corporation, at the time of Employee's
termination, is still pursuing by regular contacts with such person, and (b) any
person specifically identified by the Corporation in any of its marketing or
strategic plans as a target for solicitation of orders for the Corporation's
products, goods or services, and with respect to which person the Corporation,
has, as of the time of Employee's termination, expended substantial time, effort
and financial resources.
(c) Remedies. Employee hereby acknowledges that his services under this
Agreement are unique and extraordinary and that irreparable injury may result to
the Corporation in the event of a breach of the terms and conditions of this
Agreement to be performed or observed by him, which may be difficult to
ascertain, and that the award of damages may not be adequate relief to the
Corporation. Employee, therefore, agrees that in the event of his breach of any
of the terms or conditions of this Agreement to be performed or observed by him,
the Corporation shall have the right, in addition to all other remedies
available in the event of a breach of this Agreement, to injunctive or other
equitable relief against Employee.
(d) Severability. If at the time of the enforcement of subparagraphs (a), (b) or
(c) above a court shall hold that the period or scope of the provisions thereof
are unreasonable under the circumstances then existing, the parties hereby agree
that the maximum period or scope.
10. Notices. All notices required or permitted to be given under this Agreement
shall be given by certified mail, return receipt requested, to the parties at
the addresses set forth at the beginning of the Employee Agreement or to such
other addresses as either may designate in writing to the other party.
11. Gverning Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of New Jersey.
12. Entire contract. This Agreement constitutes the entire understanding and
agreement between the Corporation and Employee with regard to the subject matter
set forth herein. There are no other agreements, conditions or representations,
oral or written, express or implied, with regard hereto. This Agreement may be
amended only in a writing signed by both parties.
13. Non-waiver. A delay or failure by either party to exercise a right under
this Agreement, or a partial or single exercise of that right, shall not
constitute a waiver of that or any other right.
14. Headings. Headings in this Agreement are for convenience only and shall not
be used to interpret or construe its provisions.
15. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same agreement.
16. Modification. No modification, amendment or waiver of the provisions of this
Agreement shall be effective unless in writing specifically referring hereto and
signed by all parties.
17. Assignability and Binding Effect. Employee shall not assign any of his
rights or delegate the performance of any of his obligations hereunder without
the prior written consent of the Board of Directors. However, the Corporation
may assign any of its rights and delegate the performance of any of its
obligations hereunder to any of its successors, assigns or
successors-in-interest. Subject to the provisions of the preceding sentences,
all the terms of this Agreement shall be binding upon and shall inure to the
benefit of the parties and their legal representatives, heirs, successors and
assigns.
18. Survival of Covenants. The covenants and other provisions of this Agreement
shall survive the termination of Emplqyee's employment pursuant to this
Agreement.
IN WITNESS WHEREOF the Corporation and the Employee have signed this Agreement.
By: /s/ Xxxxxxx Xxxx February 18, 2003
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Name: Xxxxxxx Xxxx
Title: President
INTEGRATED HEALTH TECHNOLOGIES, INC. (a Delaware corporation)
By: /s/ E. Xxxxxx Xxx
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Name: E. Xxxxxx Xxx
Title: Chairman of the Board
INTEGRATED HEALTH TECHNOLOGIES, INC. (a Delaware corporation)
Accepted:
By: /s/ Xxxxx X. Xxxxxx February 20, 2003
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Name: Xxxxx X. Xxxxxx
Employee
