Cto Employment Agreement

EMPLOYMENT AGREEMENT ("Agreement"), dated as of April 23, 1998, between GLOBAL HEALTH SCIENCES, INC., a Delaware corporation (the "Company"), and RICHARD D. MARCONI (the "Executive").


W I T N E S S E T H :


WHEREAS, the Company is engaged in the business of manufacturing dietary and nutritional supplements in the United States and throughout the world (the "Business"); and


WHEREAS, the Company desires to retain the services of the Executive in the capacity of Chairman of the Board of Directors and President of the Company, and the Executive desires to provide such services in such capacity to the Company, on the terms and subject to the conditions set forth in this Agreement;


NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and obligations hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:


1. Employment and Term.


(a) The Company hereby employs the Executive, and the Executive hereby accepts employment by the Company, in the capacities and on the terms and subject to the conditions set forth herein from April 23, 1998 until April 23, 2003 (the "Term of Employment"). At least ninety (90) days prior to the expiration of the Term of Employment, the Company shall notify the Executive if, and under what terms and conditions, the Company will offer to extend the Term of Employment.


2. Duties. During the Term of Employment, the Executive shall serve as the Company's Chairman of the Board of Directors and President. In addition, while it is understood that the right to elect directors of the Company is by law vested in the shareholders of the Company, it is nevertheless contemplated, subject to such right, that the Executive shall, at all times during the Term of Employment, be a member of the Board of Directors of the Company (and act as Chairman thereof). The Executive shall serve the Company faithfully and to the best of his ability in such capacities and shall devote substantially all of his business time, attention, knowledge, energy and skills to such employment. If elected, the Executive also shall serve during any part of the Term of Employment as any other officer of the Company or as an officer or director of any of the Company's subsidiaries without any additional compensation other than as specified in this Agreement.


3. Compensation and Benefits. As full and complete compensation to the Executive for his execution and delivery of this Agreement and performance of the services required hereunder, the Company shall pay, grant or provide the Executive, and the Executive agrees to accept, the following salary and other compensation and benefits:


(a) an annual base salary, payable in accordance with the Company's standard payroll practices for senior executive officers, of $2,000,000 per annum ("Base Salary");


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(b) an annual bonus, determined by the Board of Directors of the Company, payable with respect to each full fiscal year of the Company during the Term of Employment in which the total EBITDA (i.e., net income before interest income (expense), income taxes and depreciation and amortization) of the Company (on a consolidated basis) exceeds $50,000,000, provided, however, that the amount of such annual bonus shall not exceed 15% of the amount by which the Company's EBITDA in such fiscal year exceeds $50,000,000;


(c) an annual automobile allowance to allow Executive to maintain an automobile comparable to his present automobile during the Term of Employment;


(d) the right to participate in any savings and stock option plans or programs and in any medical, dental, disability, retirement, insurance, savings, vacation, holiday, paid sick leave or other plans as in effect from time to time for the benefit of the Company's senior executive officers;


(e) the right to participate in any long-term incentive program as in effect from time to time for the benefit of senior executive officers implemented by the Company or any of its subsidiaries;


(f) prompt reimbursement for all reasonable business-related expenses incurred by the Executive, in accordance with the policies and procedures of the Company as in effect from time to time for senior executive officers; and


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(g) paid vacation in accordance with the policies and procedures of the Company as in effect from time to time for senior executive officers.


4. Termination.


(a) Death. In the event of the death of the Executive during the Term of Employment, this Agreement shall automatically terminate and the Company shall have no further obligations hereunder, except to pay the Executive's beneficiary or legal representative the Base Salary prorated to the date of death.


(b) Cause. The Company shall have the right, upon written notice to the Executive, to terminate the Executive's employment under this Agreement for Cause (as hereinafter defined), effective upon the giving of such notice (or such later date as shall be specified in such notice), and the Company shall have no further obligations hereunder, except to pay the Executive his Base Salary prorated to the effective date of termination, and the Executive shall continue to have the obligations provided for in Sections 6 and 7 hereof.


For purposes of this Agreement, "Cause" means:


(i) fraud, embezzlement, gross insubordination on the part of the Executive or any act of moral turpitude or misconduct by the Executive;


(ii) conviction of or the entry of a plea of nolo contendere by the Executive for any felony; or


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(iii) a material breach of, or the willful failure or refusal by the Executive to perform and discharge, his duties, responsibilities or obligations under this Agreement.


(c) Change of Control. The Executive shall have the right to terminate his employment under this Agreement upon a C ...