Bradley T. MacDonald & Associates
Supplement
to
Proxy Statement
In Opposition to the Board of Directors of
HealthRite Inc.
________________________________________
Annual Meeting of Stockholders
to be held on December 17, 1997
________________________________________
This Supplement to Proxy Statement is being furnished
to the stockholders of HealthRite Inc. ("HealthRite" or the
"Company") in connection with the solicitation by a committee
consisting of Bradley T. MacDonald, David M. Green, Ronald O.
Hauge, David H. Panasci, Beverly L. Valore, Reed Vordenberg, and
Charles Richard Walgreen, Sr. (the "Committee") of proxies for
use at the annual meeting of stockholders of HealthRite scheduled
to be held on Wednesday, December 17, 1997 at 10:00 A.M. Eastern
time (the "Annual Meeting").
This Supplement amends and supplements the Committee's
proxy statement dated December 5, 1997.
The Committee
The Committee was organized on November 10, 1997, and
the Committee's members intend to vote for the Committee's
nominees for election as directors of HealthRite. According to
the Board's Proxy Statement, seven directors are to be elected at
the Annual Meeting. The nominees for election as directors of
HealthRite receiving the most votes, in person or by proxy, at
the Annual Meeting will be elected to serve as HealthRite's
directors. Because no set percentage or number of votes is
required for election as a director, it is impossible to predict
the number of votes required to elect any nominee as a director.
Accordingly, every vote counts!
Experience of Committee Members
With Major Retail Chains
The Committee believes that certain of the Committee's
nominees have extensive knowledge and experience, in an executive
capacity, with major retail chains. For example, Charles Richard
Walgreen, Sr. was Executive Purchasing Manager in the
Marketing/Purchasing Department of Walgreen Company for 16 years;
David H. Panasci was President and Chief Operating Officer with
Fay's Incorporated for three years and spent 18 years in the
Fay's organization; and David M. Green is the President and Chief
Executive Officer of Southwest Supermarkets LLC and has been
President of two other supermarket chains.
Reasons for the Resignation of Bradley T. MacDonald
Mr. MacDonald resigned as the President and Chief
Executive Officer of the Company in August 1997 after serving in
those positions for seventeen months. Mr. MacDonald resigned at
the request of the Company's Board of Directors and as a result
of disagreements with Warren H. Haber and John L. Teeger
concerning the role of Founders Management Services, Inc.
("Founders") in the every day operations of the Company and the
timing of payments of expenses and fees to Founders. Mr.
MacDonald also objected to Mr. Horwitz's everyday involvement in
marketing decisions as directed by the executive committee of the
Board of Directors in July 1997 and the payment of additional
consulting fees associated with any proposed agreement with Mr.
Horwitz. In connection with his resignation, Mr. MacDonald and
the Company agreed to convert Mr. MacDonald's employment
agreement into a consulting agreement. Pursuant to the terms of
the consulting agreement Mr. MacDonald's compensation remained at
his base salary and the expiration date of his options was
extended to March 31, 1998. Mr. MacDonald agreed not to make any
disparaging remarks about the Company or its officers or
directors. The agreement expires on December 31, 1997.
Reasons for Solicitation
The Committee is opposing management's nominees for
director because the Committee believes that the Company's
operating results can be improved through more effective
management. In addition, the Committee believes its nominees are
better qualified to serve as directors of HealthRite than
management's nominees. Although Bradley T. MacDonald and
Ronald O. Hauge are two of the Company's largest shareholders,
there are other larger shareholders of the Company.
The Committee has not performed any formal analysis of
the Company's performance or its potential performance under the
leadership of the Committee's nominees. The Committee has
determined, however, that labor costs in Montana are
substantially lower than in Baltimore (approximately $9.00 per
hour in Montana versus approximately $15.00 per hour in
Baltimore) and believes that consolidation of production of
HealthRite's products in Montana will result in cost savings to
the Company. No assurance can be given, however, that any cost
savings can be achieved. In addition, the Committee intends to
seek a tenant for the Baltimore facility presently leased by the
Company or to negotiate an early termination of the lease. The
Committee has not made any contract or arrangement regarding a
tenant for such facility or entered into any agreement with the
landlord regarding an early termination of the Company's lease.
Although the Committee's nominees, if elected, intend
to hire a sales specialist with experience in sales and
distribution of consumer products to drugstore and supermarket
chains, no assurance can be given that the Company will be able
to hire anyone with such experience and knowledge. In addition,
the hiring of such a specialist may increase the Company's
compensation expense.
The Committee's nominees, if elected, intend to hire
Bradley T. MacDonald as President and Chief Executive Officer and
Reed Vordenberg as President of HealthRite. There are no
agreements or understandings with Mr. MacDonald or Mr. Vordenberg
as to the terms of their employment. Mr. Vordenberg was a
commissioned sales representative of the Company in 1997 for one
transaction. The Company has not paid Mr. Vordenberg the
commission he earned for such sale.
The Committee does not intend to raise any matters or
proposals at the Annual Meeting except to nominate the
Committee's nominees for election as directors of HealthRite.
The Committee is soliciting votes FOR the Company's proposal to
amend the Company's stock option plan.
Other Matters
Mr. MacDonald intends to file a report on Form 4 with
respect to his December 5, 1996 Stock Purchase.
Mr. MacDonald failed to timely file a Schedule 13D
relating to his ownership of 5% or more of the Company's stock.
According to the Company's quarterly report, during the
nine month period ended September 30, 1997, the Company incurred
a net operating loss of $1,034,000. Mr. MacDonald was the
Company's President during eight of those nine months.
