EX-10.1




	




Exhibit 10.1



EMPLOYMENT
AGREEMENT



     
        This
 Employment  Agreement is made and entered into this 1st day of January 2004,  by and
between R-Tec  Holding,  Inc., an Idaho  corporation  (the  “Company”),  and
its wholly owned  subsidiary,  R-Tec Corporation, an Idaho corporation, and Michael T.
Montgomery, an individual (“Employee”). 



RECITALS



     
        A.
 The Company desires to be assured of the association and services of Employee for the
Company. 



     
        B.
 Employee is willing and desires to be employed by the Company, and the Company is
willing to employ Employee, upon the terms, covenants and conditions hereinafter set
forth. 



AGREEMENT



     
        NOW,
THEREFORE, in consideration of the mutual terms, covenants and conditions hereinafter set
forth, the parties hereto do hereby agree as follows: 



     
        1.
         Employment. The Company hereby employs Employee as the Company’s Chief
Financial Officer, subject to the supervision and direction of the Company’s Board
of Directors. 



     
        2.
         Term.  The term of this Agreement  shall be for a period of three (3) years
 commencing on the date hereof,  unless  terminated  earlier  pursuant to Section 6
below;  provided,  however,  that Employee’s obligations in Section 5 below shall
continue in effect after such termination. 



     
        3.
         Compensation; Reimbursement.  



     
        3.1
        Base Salary.   For all services  rendered by Employee  under this  Agreement,  the
Company shall pay Employee a base salary as set forth in Exhibit A (the “Base  Salary”),
 attached  hereto and incorporated  herein.  Salary payments shall be made every two
weeks in equal installments.  There shall be an annual evaluation of Employee’s
 performance.  The base salary may be increased from time to time subject to the Employee’s
 annual evaluation and the Company’s  profitability as determined by the Board of
Directors.  No such change shall in any way abrogate,  alter,  terminate or otherwise
affect the other terms of this Agreement. 



     
        3.2
        Additional  Benefits.   In addition to the Base  Salary,  Employee  shall be
entitled to the same  benefits as  provided to other  employees  of the Company  upon
such terms and  conditions  as established by the Board of Directors.  A summary of
current employee benefits is set forth in Exhibit B, attached hereto. In addition,
 Employee shall be entitled to any benefits,  bonuses and/or incentive  programs
established by the Board of Directors for him. 



     
        3.3
        Reimbursement.   Employee shall be reimbursed for all reasonable  “out-of-pocket” business
expenses for business travel and business entertainment incurred in connection with the
performance of his duties under this Agreement (1) so long as such expenses  constitute
 business  deductions  from taxable income for the Company and are excludable  from
taxable income to the Employee under the governing laws and regulations of the Internal
 Revenue Code (provided,  however,  that Employee shall be entitled to full
 reimbursement  in any case where the Internal Revenue Service may, under Section 274(n)
of the Internal Revenue Code, disallow to the Company 50% of meals and entertainment
 expenses); and (2) to the extent such expenses do not exceed the amounts allocable for
such expenses in budgets that are approved from time to time by the Company. The
reimbursement of Employee’s business expenses shall be upon monthly presentation to
and approval by the Company of valid receipts and other appropriate documentation for
such expenses. 



     
        4.
         Scope of Duties.   Employee  shall have such duties as may be assigned to him
from time to time by the  Company’s  Board of Directors  and such duties shall be
exercised  subject to the control and supervision of the Board of Directors of the
Company. 



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        4.1
        Conflicting  Activities.  Employee hereby agrees to promote and develop all
business opportunities that come to his attention relating to current or anticipated
future business of the Company, in a manner consistent with the best interests of the
Company and with his duties under this Agreement.  Should Employee  discover a business
 opportunity that does not relate in any way to the current or anticipated future
business of the Company,  then Employee may develop the business opportunity for himself;
 provided,  however,  that such development may in no way conflict or interfere with the
duties owed by Employee to the Company under this Agreement. Further, Employee may
develop such business opportunities only on his own time, and may not use any service,
personnel,  equipment, supplies, facility, or trade secrets of the Company in their
development.  As used herein, the term “business  opportunity”  shall not
include business  opportunities  involving  investment in publicly traded stocks,  bonds
or other securities,  or other investments of a personal nature. 



     
        5.
         Confidentiality of Trade Secrets. 



     
        5.1
        Trade Secrets.  Other than in the performance of his duties hereunder,  Employee
agrees not to disclose,  either during the term of his employment by the Company or at
any time thereafter,  to any person,  corporation or other business entity any
information  concerning the business affairs, the trade secrets or the customer lists or
similar confidential  information of the Company. Any technique,  method, process or
technology used by the Company shall be considered a “trade secret” for the
purposes of this Agreement. 



     
        5.2
        Ownership of Trade Secrets;  Assignment of Rights. Employee hereby agrees that
all know-how,  documents,  reports,  plans, proposals,  marketing and sales plans, client
lists, client files and materials  made by him or by the Company are the property of the
Company and shall not be used by him in any way adverse to the  Company’s
 interests.  Except in the ordinary  course of business,  Employee  shall not deliver,
 reproduce or in any way allow such documents or things to be delivered or used by any
third party without specific  direction or consent of the Board of Directors of the
Company.  Employee hereby assigns to the Company any rights, which he may have in any
such trade secrets or proprietary information. 



     
        6.
         Bases for Termination. 



     
        6.1
 Employee’s employment hereunder may be terminated at any time by mutual agreement
of the parties. 



     
        6.2
This Agreement  shall  automatically  terminate on the last day of the month in which
Employee dies or becomes  permanently  incapacitated.  “Permanent  incapacity” as
used herein shall mean mental or physical  incapacity,  or both,  reasonably  determined
by the Company’s Board of Directors based upon a certification of such incapacity
by, in the discretion of the Company’s Board of Directors,  either  Employee’s
regularly  attending  physician or a duly licensed physician selected by the Company’s
Board of Directors,  rendering Employee unable to perform  substantially all of his
duties hereunder and which appears reasonably certain to continue for at least six
 consecutive  months  without  substantial  improvement.  Employee  shall be deemed to
have “become  permanently  incapacitated”  on the date the Company’s
 Board of Directors has determined that Employee is permanently incapacitated and so
notifies Employee. 



     
        6.3
 Employee’s  employment  may be terminated by the Company only “with cause,”  effective
upon delivery of written notice to Employee given at any time (without any necessity for
prior notice) if any of the following shall occur: 










	 	             (a)
any action by Employee which would be grounds for  termination for any willful breach of
duty,  habitual  neglect of duty and continued  incapacity  which is detrimental to the
business of             the Company;






	 	             (b)
 any material breach of Employee’s obligations in Section 5 above; or






	 	             (c)
any material acts or events which inhibit  Employee from fully  performing his or her
 responsibilities  to the Company in good faith,  such as (i) a felony criminal
 conviction;  (ii) any             other criminal conviction involving Employee’s
lack of honesty or Employee’s moral turpitude; (iii) drug or alcohol abuse; or (iv)
acts of dishonesty, gross carelessness or gross misconduct.







	


     
        6.4
 Employee’s  employment  may be  terminated  by the Company  “without  cause” (for
any reason or no reason at all) at any time by giving  Employee 30 days prior written
 notice of  termination,  which termination  shall be effective on the 30th day following
such notice. If Employee’s  employment under this Agreement is so terminated,  the
Company shall make a lump sum cash payment to Employee within 10 days after termination
of an amount equal to Employee’s Base Salary for one year, plus any unreimbursed
expenses accruing to the date of termination. 



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        6.5
Severance  Provisions.  The provisions of this Sections 6 shall be subject to and deemed
modified by the terms of any severance  benefits granted to Employee by the Board of
Directors.  However,  such severance  benefits  cannot  provide  Employee with less
monetary  compensation  than he would have received under the provisions of Section.  In
the event of termination  initiated by the Company,  Employee shall be entitled to all
stock options that have been issued to Employee by the Company,  whether the stock
options have been vested or not. In the event of  acquisition,  merger,  takeover,  sale,
or other change in business form, the provisions of this contract will be deemed as valid
and will continue with any new business structure or format. 



     
        7.
         Injunctive  Relief.  The Company and  Employee  hereby  acknowledge  and agree
that any default  under  Section 5 above may cause  damage to the Company in an amount
 difficult  to  ascertain. Accordingly,  in addition to any other relief to which the
Company may be entitled, the Company shall be entitled to such injunctive relief as may
be ordered by any court of competent jurisdiction including,  but not limited to, an
injunction restraining any violation of Section 5 above and without the proof of actual
damages. 



     
        8.
         Miscellaneous. 



     
        8.1
        Transfer and Assignment.  This Agreement is personal as to Employee and shall not
be assigned or transferred by Employee without the prior written consent of the Company.
 This Agreement shall be binding upon and inure to the benefit of all of the parties
hereto and their respective heirs, personal representatives, successors and assigns. 



     
        8.2
        Severability.  Nothing  contained herein shall be construed to require the
commission of any act contrary to law. Should there be any conflict between any
provisions  hereof and any present or future statute,  law, ordinance,  regulation,  or
other pronouncement having the force of law, the latter shall prevail, but the provision
of this Agreement affected thereby shall be curtailed and limited only to the extent
necessary to bring it within the requirements of the law, and the remaining provisions of
this Agreement shall remain in full force and effect. 



     
        8.3
        Governing Law and Jurisdiction.  This Agreement is made under and shall be
construed in accordance with the laws of the State of Idaho. Any legal action,  mediation
or arbitration  proceedings brought by any party to enforce any provision of this
Agreement shall be brought and maintained in a court of competent jurisdiction in the
State of Idaho with venue in Ada County State of Idaho. 



     
        8.4
        Entire Agreement.  This Agreement,  together with its attachments and exhibits,
 constitutes the entire agreement and understanding of the parties with respect to the
subject matter hereof and supersedes all prior oral or written agreements,  arrangements,
 and understandings with respect thereto. No representation,  promise, inducement,
 statement or intention has been made by any party hereto that is not embodied herein,
and no party shall be bound by or liable for any alleged representation, promise,
inducement, or statement not so set forth herein. 



     
        8.5
        Modification.  This Agreement may be modified,  amended,  superseded,  or
canceled, and any of the terms, covenants,  representations,  warranties or conditions
hereof may be waived, only by a written instrument executed by the party or parties to be
bound by any such modification, amendment, supersession, cancellation, or waiver. 



     
        8.6
        Attorneys’ Fees and Costs. In the event of any dispute arising out of the
subject matter of this Agreement,  the prevailing party shall recover, in addition to any
other damages assessed,  its attorneys’ fees and court costs incurred in litigating
or otherwise settling or resolving such dispute whether or not an action is brought or
prosecuted to judgment. In construing this Agreement,  none of the parties hereto shall
have any term or provision construed against such party solely by reason of such party
having drafted the same. 



     
        8.7
        Waiver.  The waiver by either of the parties,  express or implied,  of any right
under this Agreement or any failure to perform under this Agreement by the other party,
shall not constitute or be deemed as a waiver of any other right under this Agreement or
of any other failure to perform under this Agreement by the other party, whether of a
similar or dissimilar nature. 



     
        8.8
        Cumulative  Remedies.  Each and all of the several rights and remedies  provided
in this Agreement,  or by law or in equity,  shall be cumulative,  and no one of them
shall be exclusive of any other right or remedy, and the exercise of any one of such
rights or remedies shall not be deemed a waiver of, or an election to exercise, any other
such right or remedy. 



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        8.9
        Headings. The section and other headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning and interpretation of
this Agreement. 



     
        8.10
       Notices.  Any notice under this Agreement must be in writing, may be telecopied,
 sent by express 24-hour guaranteed courier, or hand-delivered,  or may be served by
depositing the same in the United States mail, addressed to the party to be notified,
postage-prepaid and registered or certified with a return receipt requested. The
addresses of the parties for the receipt of notice shall be as follows: 









	              	If
      to the Company: 

      

      R-Tec Corporation 

      1471 E. Commercial Ave.

      Meridian, Idaho 83642 

      

      

      If to Employee: 

      

      Michael T. Montgomery 

      3072 Maywood Ave. 

      Boise, Idaho 83704 







	


     
        Each
notice given by registered or certified mail shall be deemed  delivered and effective on
the date of delivery as shown on the return  receipt,  and each notice  delivered in any
other manner shall be deemed to be effective as of the time of actual delivery thereof.
 Each party may change its address for notice by giving notice thereof in the manner
provided above. 



     
        8.11
       Survival.  Any provision of this Agreement  which imposes an obligation  after
 termination or expiration of this Agreement shall survive the termination or expiration
of this Agreement and be binding on Employee and the Company. 



     
        8.12
       Right of Set-Off.  Upon termination or expiration of this Agreement,  the Company
shall have the right to set-off against the amounts due Employee  hereunder the amount of
any outstanding loan or advance from the Company to Employee. 



     
        8.13
       Legal  Representation.  The parties to this Agreement  acknowledge that this
Agreement has been prepared by legal counsel for the Company and that each party to this
Agreement has had full and adequate opportunity to review this Agreement and have the
Agreement reviewed by legal counsel of their choosing. 



     
        8.14
       Effective Date.  This Agreement shall become effective as of the date set forth on
page 1 when signed by Employee and the Company. 



     
        IN
WITNESS WHEREOF, the parties hereto have caused this Employment Agreement to be executed
as of the date first set forth above. 










			“Employee”

      

      

      ______________________________

      

      “Company”

      

      

      By: ___________________________

      

      Its: ___________________________






	


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Exhibit A of
Employment Agreement



Base Salary 



For the position of Chief
Financial Officer, Employee’s salary shall be $72,000.00 (seventy-two
thousand dollars) per year. 



Responsibilities shall
include but are not limited to: Oversight of all financial transactions relating
to the Company’s financial statements, cash management including AR and AP
functions, direction of corporate audits, reporting for MIS (management
information system) to facilitate management decision making, oversight of all
payroll and HR functions, oversight of the Company’s compliance for SEC
regulations, oversight of tax reports, deposits, and filings, including payroll
and corporate income, oversight of preparation of Annual Report, Proxy
Statements, and other related financial documentation for the Annual
Shareholders meeting. The CFO will also be responsible for the Company’s
operating system and ensure accuracy of the data in the system and the
development of the system working with IT personnel to match the system’s
capabilities with the Company’s strategic plans. The CFO will also be
responsible for daily accounting functions, and in the absence of a controller
or accounting personnel, will perform the necessary accounting duties for the
Company. 



Additions to Base
Salary and Responsibilities 



To the extent the Employee
is asked to accept the responsibilities of Interim President and Chief Executive
Officer or to fill the office of President and Chief Executive Officer, which
may or may not include the original responsibilities of the CFO, the
Employee’s base salary will be increased to $80,000.00 (eighty thousand
dollars) per year for year one, with annual reviews and salary adjustments by
the Board of Directors 



Stock Options 



As incentive to
performance, the Employee shall be granted 500,000 stock options at $.125
(twelve and one half cents) for each of the three years of the employment
contract. The options will be deemed vested at date of granting and will not be
revoked or deemed void due to early severance. 



Exhibit B of
Employment Agreement



Summary of
R-Tec Employee Benefits










			              - 		R-Tec
Corporation will provide a standard medical benefit package with Blue Cross.






			  - 		With
in this medical benefit package is a cafeteria plan for dependents. 






			  - 		Six
paid holidays; New Years Day, Memorial Day, 4th of July, Labor Day, Thanksgiving Day, and
Christmas Day






			  - 		Four
weeks paid personal leave per year.  (Note: this personal leave can be used for sick days
or vacation days at employee’s discretion.)






	


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			  - 		R-Tec
Corporation Retirement Program.






			  - 		Company
Bank Business card for business and travel expenses. 






			  - 		Future
Profit Sharing / Bonus Plans.






			  - 		Salary
compensation program






			  - 		Flex
Time






	


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