Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made as of the 1st day of December, 1997, by
and between KAIRE INTERNATIONAL, INC., a Delaware corporation (the "Company"),
and XXXXXX X. XXXXXXXX, of 0000 Xxxxxxx Xxxx Xxxxx, Xxxxxxxx, XX 00000
("Employee").
W I T N E S S E T H:
WHEREAS, the Company develops and distributes, through a network of
independent associates, products that are intended to appeal to health-conscious
consumers throughout the United States and select foreign countries.
WHEREAS, Employee possesses valuable knowledge and skills that will
contribute to the successful operation of the Company's business; and
WHEREAS, the Company desires to procure the services of Employee, and
Employee hereby agrees to be employed by the Company, upon the terms and subject
to the conditions hereinafter set forth;
NOW, THEREFORE, intending to be legally bound, the Company agrees to
employ Employee, and Employee hereby agrees to be employed by the Company, upon
the following terms and conditions:
ARTICLES 1
EMPLOYMENT
1.01. Office. Employee is hereby employed as the Chief Executive Officer
of the Company and in such capacity shall use his best energies and abilities in
the performance of his duties hereunder and in the performance of such other
duties as may be assigned to him from time to time by the Board of Directors of
the Company (the "Board").
1.02. Term. Subject to the terms and provisions of Article II hereof,
Employee shall be employed by the Company for a period of five (5) years,
commencing on the date hereof.
1.03. Base Salary. During the term of Employee's employment hereunder,
compensation shall be paid to Employee by the Company at the rate of $180,000
per annum (the "Base Salary"), payable bi-weekly. The rate of compensation to be
paid to Employee may be increased by the Board at any time based upon Employee's
contribution to the success of the Company and on such other factors as the
Board shall deem appropriate.
1.04. Employee Benefits. At all times during the term of Employee's
employment hereunder, Employee shall; (a) be covered by a major medical or
health benefit plan; (b) receive reimbursement for all properly substantiated
business expenses; and (c) be entitled to four (4) weeks paid vacation each year
and such holidays and sick days as are available to other executive employees of
the Company. The compensation provided to Employee hereunder shall not affect
his right to participate in the pension plan, the savings plans, stock option
plans, and similar plans or any other employee benefit plans of Kaire
International, Inc. if under the terms thereof Employee could be eligible
without regard to this Agreement.
1.05. Change in Control. (a) If Employee's employment with the Company is
terminated by the Company or by Employee for any reason other than death of
Employee following a Change in Control of the Company, Employee shall be paid,
within 30 days following of such termination, an amount in cash equal to the Net
Present Value (NPV), discounted at 5%, of the remaining compensation due him
under the remaining term of this contract. In addition, all benefits of Employee
shall be paid for one (1) year by
the Company. The Company's indebtedness to Employee, if any, shall become
immediately due and payable in the event of termination or change in control,
regardless of the original terms thereof.
(b) For purposes of this Section 1.05, the following terms shall have the
following meanings:
(1) The term "person" shall be used as that term is used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934 as amended (the "1934
Act").
(2) "Beneficial Ownership" shall be determined as provided in Rule
13d-3 under the 1934 Act as in effect on the effective date of this Agreement.
(3) "Voting Shares" shall mean all securities of a company entitling
the holders thereof to vote in an annual election of Directors (without
consideration of the rights of any class of stock other than the Common Stock to
elect Directors by a separate class vote); and a specified percentage of "Voting
Power" of a company shall mean such number of the Voting Shares as shall enable
the holders thereof to cast such percentage of all the votes which could be cast
in an annual election of directors (without consideration of the rights of any
class of stock other than the Common Stock to elect Directors by a separate
class vote).
(4) "Tender Offer" shall mean a tender offer or exchange offer to
acquire securities of the Company (other than such on offer made by the Company
or any subsidiary), whether or not such offer is approved or opposed by the
Board.
(5) "Change in Control" shall mean the date upon which any of the
following events occurs:
(A) The Company acquires actual knowledge that any Person
other than the Company, a subsidiary or any employee benefit plan(s) sponsored
by the Company has acquired the Beneficial Ownership, directly or indirectly, of
securities of the Company entitling such Person to 25% or more of the Voting
Power of the Company.
(B) A Tender Offer is made to acquire securities of the
Company entitling the holders thereof to 50% or more of the Voting Power of the
Company; or (ii) Voting Shares are first purchased pursuant to any other Tender
Offer;
(C) At any time less than 60% of the members of the Board
shall be individuals who were either Directors on the effective date of this
Agreement or (ii) individuals whose election, or nomination for election, was
approved by a vote (including a vote approving a merger or other agreement
providing the membership of such individuals on the Board) of at least
two-thirds of the Directors then still in office who where Directors on the
effective date of this Agreement or who were so approved.
(D) The stockholders of the Company shall approve an agreement
or plan (a "reorganization Agreement") providing for the Company to be merged,
consolidated or otherwise combined with, or for all or substantially all its
assets or stock to be acquired by, another corporation, as a consequence of
which the former stockholders of the Company will own, immediately after such
merger, consolidation, combination or acquisition, less than a majority of the
Voting Power of such surviving or acquiring corporation or the parent thereof;
or
(E) The stockholders of the Company shall approve any
liquidation of all or substantially all of the assets of the Company or any
distribution to security holders of assets of the Company having a value equal
to 30% or more of the total value of all the assets of the Company.
(c) The Company agrees to pay the fees and expenses of counsel for
Employee incurred by Employee arising in connection with Employee's enforcement
or preservation of his right to collect the Change in Control payment described
in Section 1.05(a).
ARTICLE 11
TERMINATION
2.01. Illness, Disability. If during the term of Employee's employment
hereunder Employee shall be prevented, in the company's judgment, from
effectively performing all his duties hereunder by reason of illness or
disability, then the Company may, by written notice to Employee, terminate
Employee's employment hereunder. Upon delivery to Employee of such notice,
together with payment of any salary accrued under Section 1.03 hereof,
Employee's shall receive $37,500 per annum during the remaining term of this
contract and the Company shall continue to pay the health insurance premiums of
Employee during the remaining term hereof.
2.02. Death. If Employee dies during the term of his employment hereunder,
Employee's employment hereunder shall terminate and all obligations with respect
to the payment of accrued and unpaid salary under Section 1.03 hereof; shall
terminate.
2.03. Company Termination for Cause. If Kaire International, Inc.
determines that Employee has repeatedly failed to perform his duties hereunder
after written notice of such failure from Kaire International, Inc. to Employee,
has committed a violation of any of the agreements, covenants, terms or
conditions hereunder or has engaged in conduct which has injured or would injure
the business or reputation of Kaire international, Inc. or otherwise adversely
affect its interest, then, and in such event, Kaire International, Inc. may,
upon 30 days prior written notice to Employee, terminate Employee's employment
hereunder. Upon such termination, Employee shall be entitled to any Salary
accrued under Section 1.03 hereof and any indebtedness owed Employee by Company.
Any of Kaire International, Inc.'s obligations under Article 1 hereof shall
forthwith terminate.
2.04. Employee Benefits. Termination of Employee as provided in this
Article shall not affect Employee's rights and Employee benefit plans of Kaire
International, Inc. if under the terms thereof Employee could be eligible
without regard to this Agreement.
ARTICLES III
EMPLOYEE'S COVENANTS AND AGREEMENTS
3.01. Non-Disclosure of Confidential Information. Employee agrees to hold
and safeguard Confidential Information in trust for the Company, its successors
and assigns and agrees that he shall not, without the prior written consent of
the company, misappropriate or disclose or make available to anyone for use
outside the Company's organization at any time, either during his employment
with the Company or subsequent to the termination of his employment with the
Company for any reason, including, without limitation, termination by the
Company for causes, any of the Confidential Information, whether or not
developed by Employee, except as required in the performance of Employee's
duties to the company or as otherwise required by order of Court. "Confidential
Information" as used herein includes information concerning the Company's
revenues, volume, business methods, proposals, identity of customers and
prospective customers, identity of key purchasing personnel in the employ of
customers and prospective customers, amount or kind of customer's purchases form
the Company, the Company sources of supply, vendors of equipment and material,
the Company's computer programs, system documentation, the Company's manuals,
formulae, processes, methods, machines, compositions, ideas, improvements,
inventions or other confidential or proprietary information belonging to the
Company or relating to the Company affairs.
3.02. Duties. Employee agrees to be a loyal full time employee of the
Company. Employee agrees to devote his best efforts to the performance of his
duties for the Company, to give proper time and
attention to furthering the Company's business, and to comply with all rules,
regulations and instruments established or issued by the Company.
3.03. Return of Materials. Upon the termination of Employee's employment
with the company for any reason, including without limitation termination by the
Company for cause, Employee shall promptly deliver to the company all
correspondence, drawing, blueprints, manuals, letters, memoranda, notes,
notebooks, records, reports, flowcharts, programs, proposals and any documents
concerning the Company and, without limiting the foregoing, will promptly
deliver to the Company any and all other documents or materials containing or
constituting Confidential Information.
ARTICLE IV
MISCELLANEOUS
4.01. Authorization to Modify Restrictions. It is the intention of the
parities that the provisions of Article III hereof shall be enforceable to the
fullest extent permissible under applicable law, but that the unenforceability
(or modification to confirm to such law) of any provision or provisions hereof
shall not render unenforceable, or impair, the remainder thereof If any
provision or provisions hereof shall be deemed invalid or unenforceable, either
in whole or in part, this Agreement shall be deemed amended to delete or modify,
as necessary, the offending provision or provisions and to alter the bounds
thereof in order to render it valid and enforceable.
4.02. Entire Agreement. This Agreement represents the entire agreement of
the parities and may be amended only by a writing signed by each of them.
4.03. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
4.04. Agreement Binding. The obligations of Employee under this Agreement
shall continue after the termination of his employment with the Company for any
reason, and shall be binding on his heirs, executors, legal representatives and
assigns and shall inure to the benefit of any successors and assignees of the
Company
4.05. Counterparts. Section Headings. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument. The section
headings of this Agreement are for convenience of reference only and shall not
affect the construction or interpretation of any of the provisions hereof.
4.06. Waiver. The failure of either party at any time or times to require
performance of any provisions hereof shall in no manner affect the right at a
later time to enforce such provisions thereafter. No waiver by either party of
the breach of any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach or a waiver of
the breach of any other term or covenant contained in this Agreement.
4.07. Notices. All notices and other communications provided for herein
shall be in writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, return receipt requested,
postage prepaid:
(a) If to the Company:
Kaire International, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
(b) If to the Employee:
Xxxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Either party may specify a different address by notice in writing to the
other as provided in this Section 4.07.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed as of the day and year first above written.
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Xxxxxx X. Xxxxxxxx
Kaire International, Inc.
By:
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Chairman of the Board
