NAI Counter-Sues Ex-President; Initiates Cost-Cutting Measures

NAI Counter-Sues Ex-President; Initiates Cost-Cutting Measures

SAN DIEGO--Natural Alternatives International (NAI) is counter-suing its former president, William Spencer, on grounds that Spencer created a competing company and conspired with NAI employees while still acting as an executive and serving on its board of directors. In January 1999, Spencer was terminated by NAI after the results of an investigation into that matter were released. He then sued the company for wrongful termination.

NAI's counter-claim was filed on June 14 in San Diego Superior Court. NAI alleges that Spencer, along with two former NAI employees, a consultant, and his new company, Imagenetix Inc., breached fiduciary duty, conspired against NAI, and engaged in breach of contract, misappropriation of trade secrets, misrepresentation, slander and trade libel.

"We had hoped to resolve this matter privately rather than elevating it into public litigation," said NAI president and founder, Mark LeDoux. "However, since Mr. Spencer filed his lawsuit and has continued to discredit NAI, we will protect both NAI's business and legal interests and have addressed his on-going inappropriate actions in our counter-suit."

In other news, the company will implement several new cost-cutting measures to improve operational efficiencies. According to the company, the cost-cutting plan is aimed at reducing expenses.

Three areas will be targeted to complete the task--the company will establish in-house packaging facilities, reduce its workforce and reduce executive salaries. To assist in the cost cutting, LeDoux reduced his annual salary by 31 percent and reduced a number of executive benefits as well.

According to Peter Wulff, NAI's chief financial officer, making these decisions--especially staff reduction decisions--was difficult. Wulff cited reducing overhead and unnecessary expenses as areas the company is focused on. "The completion of these cost containment measures underscores our commitment to restoring NAI to profitability," he said.