EMPLOYMENT AGREEMENT
BETWEEN
HEALTHRITE, INCORPORATED
AND
XXXX XXXXXXXXXX
AGREEMENT dated as of May 1, 1998 between HealthRite, Incorporated, a
Delaware Corporation, with its principal office located at 00000 Xxxxxxxx Xxxxx.
Xxxxxx Xxxxx, Xxxxxxxx 00000, hereinafter called the "Employer," and Xxxx
Xxxxxxxxxx, an individual residing at 0000 Xxxxxxx Xxxxx, Xxxxxxxxxx Xxxxx,
Xxxxxxxx 00000, hereinafter called the "Employee," an employee of HealthRite,
Inc.
WHEREAS, Employee and employer now desire to mutually enter into an
Employment relationship as Employee and Employer, and all employment thereunder;
NOW THEREFORE, in consideration of their mutual promises set forth herein,
the TERMS OF EMPLOYMENT as parties hereby agree as follows:
1. EMPLOYMENT. Employer and Employee hereby mutually agree that the
employment of Employee by Employer, is hereby effective immediately.
2. DURATION OF EMPLOYMENT. Employer and Employee enter into an Employment
Agreement until March 1, 2000. This Employment Agreement expires on
March 1, 2000, unless terminated earlier pursuant to the provisions of
paragraph 14.
3. TERMINATION AGREEMENT. Employer and Employee mutually agreed that the
employment of Employee by Employer shall expire on March 1, 2000,
unless a new Employment Agreement is negotiated.
4. PERFORMANCE CRITERIA.
a. Continuation of employment requires that the employee, the
President of HealthRite, Inc., to devote all of his business
time, skill and energy to the affairs and business of the Company
and its subsidiaries.
b. Performing the duties designated by the Board to him as the
President of HealthRite, Inc.
1) Primary Duties: Sales and Marketing development of all
HealthRite products to doctors, clinics, healthfood, drug
stores, grocery stores, and mass merchandisers to include
distributors who service the retailers. As the President of
HealthRite, the Employee will be responsible for the sales
and marketing development strategy in conjunction with CEO
and the President of Montana Naturals Internat'l., Inc.
2) Secondary Duties: Chief Operating Officer of Xxxxx
Pharmaceuticals, Inc.
3) All personnel, purchasing, information systems and finance
are corporate functions that will report to the Chief
Financial Officer of the Company.
c. Using Employee's best efforts to promote the interests and
welfare of the Company and its subsidiaries. Developing sales and
marketing for all HealthRite products.
d. All functions normally associated with the Chief Financial
Officer (CFO) and Corporate Controller will not report to the
Employee as President of HealthRite, Inc.
e. Employee shall report directly to the Chairman and the Chief
Executive Officer of the Employer, Xx. Xxxxxxx X. Xxx Xxxxxx. 5.
COMPENSATION. Employee will be paid SEVENTY-FIVE THOUSAND DOLLARS
($75,000) annually, which shall be paid in bi-weekly
installments.
6. DEFERRED COMPENSATION. Employee will be paid a deferred compensation
of FIFTY THOUSAND DOLLARS ($50,000) on or before December 31, 1998.
a. This deferred compensation will be paid in cash or stock, at the
Employee's option if the Company meets its sales goals.
b. This deferred compensation will be paid in cash or stock, at the
Employee's option, if the Company meets its sales goals.
7. STOCK OPTIONS. Employee will receive One Hundred Thousand (100,000)
shares of the common stock of HealthRite, Inc., under the HealthRite,
Inc. 1993 Stock Option Plan, to be effective immediately.
8. BENEFITS. Employee shall be entitled to all medical, hospital and
disability benefits made available to the other employees of the
Employer.
9. VACATION. Employee shall be entitled to two (2) weeks paid vacation
per year.
10. PLACE OF EMPLOYMENT
a. The Employee shall perform his duties under this Agreement from
the Employer's principal place of business at 00000 Xxxxxxxx
Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000.
b. The Employer agrees that Employee may perform limited duties,
with a temporary office located at 00000 Xxxx 00 Xxxx Xxxx, Xxxxx
000, Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000.
c. The Employee shall spend at least 50% of his time performing his
duties at the Employer's principal place of business d. The
temporary office shall have a dedicated telephone, that is to be
identified to all callers as "HealthRite," to prevent confusion
to callers.
11. DISCLOSURE. Full and complete disclosure made to the Board, of all
employment, association, services performed or otherwise act in any
capacity (including without limitation as an employee, independent
contractor, or consultant) for, or otherwise be engaged by or any
other entity involved in or connected with the business in which the
Employer or any of its subsidiaries has or had been engaged which
currently principally consists of the production
2
or distribution of nutritional products, dietary supplements, weight
management and related health care products.
12. NON-COMPETITION. During the term of this Agreement and, for an
additional period of one year following the duration of this
Agreement, Employee shall not perform services or otherwise act in any
capacity (including without limitation as an employee, independent
contractor, or consultant) for, or otherwise be engaged by or any
other entity involved in or connected with the business in which the
Employer or any of its subsidiaries has or had been engaged during the
course of the employment of Employee by the Employer, which currently
principally consists of the production or distribution of nutritional
products, dietary supplements, weight management and related health
care products.
13. NON-DISCLOSURE. Employee agrees that during and after the Term of this
Employment Agreement that any confidential information concerning the
Company or their respective businesses which comes to Employee in the
course of Employee's employment and which is not (independent of
disclosure by Employee) public knowledge or general knowledge in the
trade, shall remain confidential and, except as required by legal
process, may not be used or made available for any purpose.
14. TERMINATION.
a. The Employer shall have the right to discharge Employee and
terminate this Agreement for Cause (as hereinafter defined) by
written notice to Employee and this Agreement shall be deemed
terminated as of the date of such notice.
b. For the purpose of this Agreement, "Cause" shall mean:
1) conviction of a felony,
2) gross neglect or gross misconduct (including conflict of
interest) in the carrying out of Employee's duties,
3) repeated or substantial failure, refusal or neglect to
perform Employee's duties in accordance with paragraphs 4
and 10 hereof,
4) the engaging by Employee in a material act or acts of
dishonesty affecting the Company, any affiliate or any
client of the company, or
5) Drunkenness or the illegal use of drugs by Employee
materially and repeatedly interfering with performance of
Employee's obligations under this Agreement.
c. In the event of a termination by the Company pursuant to this
paragraph 14, the Employer shall not be under any further
obligation Employee hereunder except to pay Employee, subject to
the Company's rights and remedies in the circumstances:
1) Salary, prorated deferred compensation and benefits accrued
and payable up to the date of such termination, and
3
2) Reimbursement for expenses accrued and payable that Employee
was authorized to incur for reasonable and necessary
expenses in connection with the discharge of Employee's
duties and in promoting the business of the Company.
15. JURISDICTION. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to
contracts entirely made and performed therein.
16. ENTIRE AGREEMENT. This Agreement shall constitute the entire agreement
between the parties and any prior understanding or representation of
any kind preceding the date of this agreement shall not be binding
upon either party except ANY PREVIOUS LEGAL REPRESENTATION BINDING ON
THE CORPORATON.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
EMPLOYER:
HEALTHRITE, a Delaware corporation
/s/ XXXXXXX X. XXX XXXXXX
--------------------------------------
Xxxxxxx X. Xxx Xxxxxx
Chairman & CEO
EMPLOYEE:
/s/ XXXX XXXXXXXXXX
--------------------------------------
Xxxx Xxxxxxxxxx
President, HealthRite, Inc.
Date: May 1, 1998
4
