EMPLOYMENT AGREEMENT
BETWEEN
HEALTHRITE, INCORPORATED
AND
XXXXXXX X. WALGREEN SR.
REVISION
REVISED AGREEMENT (transitioning as of July 7, 1998), dated as of August
28, 1998 (as approved by the Board of Directors) between HealthRite,
Incorporated, a Delaware Corporation, hereinafter called the "Employer," and
Xxxxxxx X. Walgreen Sr., 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, 1999. This Employment Agreement expires on
March 1, 1999, unless terminated earlier pursuant to the provisions of
paragraph 12.
3. TERMINATION AGREEMENT. Employer and Employee mutually agreed that the
employment of Employee by Employer shall expire on March 1, 1999,
unless a new Employment Agreement is negotiated.
4. PERFORMANCE CRITERIA.
a. Performing the duties designated by the board to him as
Consultant (Chairman of the Compensation Committee, Mr. Xxxxx
Xxxxx authorized the new title of Vice President Buisness
Development in lieu of Consultant) of HealthRite.
1) Duties: Sales and Marketing Consultant (Chairman of the
Compensation Committee, Mr. Xxxxx Xxxxx authorized the new
title of Vice President Buisness Development in lieu of
Consultant) in the development of all HealthRite products in
the chain drug and mass merchandiser category, specifically
Walgreen, Pharmavite, PFI, Inc. and Celestial Seasonings.
The goal of this effort is to insure profitable sales
development.
b. 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.
c. All functions normally associated with the Chief Financial
Officer (CFO) and Corporate Controller (CC) will not report to
the Employee as Consultant (Chairman of the Compensation
Committee, Mr. Xxxxx Xxxxx authorized the new title of Vice
President Buisness Development in lieu of Consultant) to
HealthRite. However, both CFO and CC will keep the Employee
informed of pertinent information necessary for the Employee to
make appropriate decisions. The Employee will not be responsible
as the President or as a
Director for the omissions or errors by the CFO and/or CC, if
determined by an independent committee of the Board that the
Employee did not have the necessary knowledge to prevent such an
error or omission.
d. Authority to enter into discussions of purchase, merger,
acquisition or joint ventures requires prior express
authorization of the Board.
e. Employee shall report directly to the Chairman and the Chief
Executive Officer of the Employer, Xx. Xxxxxxx X. Xxx Xxxxxx, and
in the absence of the Chairman and CEO, the Employee shall report
to the President of the Employer, Xx. Xxxx Vordenberg.
5. COMPENSATION. Employee will be paid SEVENTY-FIVE THOUSAND DOLLARS
($75,000.00) 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 about 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
Company's option, if the Company does not meet its sales goals.
c. This Agreement will terminate immediately if deferred
compensation is not paid by January 31, 1999.
7. STOCK OPTIONS. Employee will receive Seventy Thousand (70,000) shares
of the common stock of HealthRite, Inc., under the attached
HealthRite, Inc. 1993 Stock Option Plan. Future compensation and bonus
will depend on development of all HealthRite products.
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 Employer agrees that Employee may perform duties, with an
office located at 000 Xxxxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxx
Xxxxxx, Xxxxxxxx, 00000.
b. The Employee shall spend at least 100% of his time performing his
duties at the Employer's principal place of business.
c. The office shall have a dedicated telephone that is to be
identified to all callers as Consultant (Chairman of the
Compensation Committee, Mr. Xxxxx Xxxxx authorized the new title
of Vice President Buisness Development in lieu of Consultant) to
HealthRite, Inc. 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 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
2
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 energy,
herbal extract, pharmaceutical powders and products manufactured by
the Company. Employee shall not associate the Employer, the Company or
its subsidiaries with the Walgreen asset group.
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. 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.
a. 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
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.
3
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
Date: July 15, 1998
/s/ XXXXXXX X. XXX XXXXXX
---------------------------------------
Xxxxxxx X. Xxx Xxxxxx
Chairman & CEO
EMPLOYEE:
/s/ XXXXXXX X. WALGREEN SR.
--------------------------------------
Xxxxxxx X. Walgreen Sr.
4
