Exhibit 10.75
Nutrition 21 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President & CEO
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(▇▇▇) ▇▇▇-▇▇▇▇
September 10, 2002
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Dear Ben:
This Letter Agreement ("Agreement") is between you and Nutrition 21, Inc.
("Nutrition 21" or the "Company") regarding your current position as Senior Vice
President, General Counsel, and Secretary of Nutrition 21 reporting to ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, President and Chief Executive Officer, and is for the period
commencing September 1, 2002 through August 31, 2006 (the "Contract Period").
September 1, 2002 through August 31, 2003 is called Year 1. September 1, 2003
through August 31, 2004 is called Year 2. September 1, 2004 through August 31,
2005 is called Year 3. September 1, 2005 through August 31, 2006 is called
Year 4.
GENERAL
You will be an employee of Nutrition 21 during Year 1 and Year 2, and you will
be a consultant to Nutrition 21 during Year 3 and Year 4. In your capacity as an
employee you will serve as Senior Vice President, General Counsel, and
Secretary. In your capacity as a consultant, you will serve as General Counsel.
You agree that your employment by Nutrition 21 in Year 1 and Year 2 shall be
full time and that you shall then engage in no other business nor employment,
other than supervising your passive investments. You shall devote three days per
week to your consulting work in Year 3 and two days per week in Year 4. You
represent that you are under no restrictions or obligations which would prevent
you from serving as Senior Vice President, General Counsel, and Secretary You
may serve as a non-executive director on Boards of other companies only with my
written permission.
COMPENSATION
As an employee, your direct annualized base compensation in will be $207,500 in
Year 1 and $225,000 in Year 2 paid bi-weekly, as a non-union, full-time
employee, and your compensation shall be subject to withholding and similar
deductions. As a consultant, your annualized fee in
NUTRITION 21, INC.
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Year 3 will be $150,000, and $100,000 in Year 4, paid bi-weekly, and there shall
be no withholding unless otherwise required by law.
ANNUAL PERFORMANCE BONUS
You will be granted an annual performance bonus for each of Nutrition 21's 2003
and 2004 year-end fiscal accounting years based upon the attainment of targets
for gross revenues from operations (each, a "Target"), as more fully set forth
the following paragraphs.
The Target for fiscal year 2003 is gross revenues of $19 million. The Targets
for fiscal year 2004 will be established by agreement between the Board of
Directors and the President and Chief Executive Officer, will be the same target
that is used for calculating the annual performance bonus of the President and
Chief Executive Officer, and will be set forth in a Fiscal Year Budget Plan for
that year.
If the Company achieves less than 85% of a Target for any fiscal year, any
performance bonus for that fiscal year will be in the sole discretion of the
Board.
If the Company achieves at least 85% but less than 100% of the Target for any
fiscal year, your performance bonus for that year will be 15% of your base
compensation.
If the Company achieves at least 100% but less than 120% of the Target for any
fiscal year, your performance bonus for that year will be 30% of your base
compensation.
If the Company achieves at least 120% of the Target for any fiscal year, your
performance bonus for that year will be 60% of your base compensation.
For purposes of the bonus calculation, Year 1 base compensation applies for the
2003 fiscal year, and Year 2 base compensation applies for the 2004 fiscal year.
STOCK OPTIONS
On July 31, 2002, the Board granted to you Stock Options to purchase 225,000
shares of Nutrition 21 common stock ("Common Stock") at $0.39 per share (the
closing price on July 31, 2002). In addition to the terms set forth below,
additional terms that apply to these Stock Options are set forth in a separate
Stock Option Award Agreement. The Stock Options will vest 112,500 on each of the
first and second anniversaries of the date of the Stock Option grant.
The Stock Options shall vest as aforesaid on these vesting dates only if you are
then employed or retained as a consultant by the Company or if there has
theretofore occurred a change of control event (as defined under Nutrition 21's
Change of Control policy) while you were employed by the Company or retained by
it as a consultant. Stock Options shall be considered ISOs to the extent
permitted by law. The Stock Options will expire on July 30, 2012, and are
subject to the terms of the Stock Option Award Agreement.
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The expiration date of each previous Stock Option that the Company has granted
to you is hereby extended until the tenth anniversary of the date of grant.
OTHER BENEFITS
During your employment and consultancy, Nutrition 21 shall furnish and/or
reimburse you for all reasonable and customary business requirements including a
car allowance or equivalent. During your employment, Nutrition 21 shall furnish
coverage for group insurance, i.e. medical, dental, life insurance, AD&D, Short
and Long Term Disability, Business Travel Insurance, etc. as well as the
Nutrition 21 sponsored pension plan and savings plan will be provided in
accordance with the terms and conditions of each plan.
VACATION
Annual paid vacation and holidays will accrue in accordance with Nutrition 21's
vacation policy.
PERIOD OF EMPLOYMENT AND CONSULTANCY
Your employment and consultancy with Nutrition 21 shall be for the terms set
forth above, but Nutrition 21 may terminate your employment earlier for cause or
without cause as determined by written notice from the Board of Directors. If
Nutrition 21 fails to perform and/or mitigate within a reasonable period of time
any term or condition herein, you can terminate your employment or consultancy
upon written notice to the Board of Directors.
For purposes of this Agreement, "cause" shall be defined as follows: (1) your
conviction (including a plea of guilty to nolo contendere) of a felony or any
crime of theft, dishonesty or moral turpitude or (2) your gross omission or
gross dereliction of any statutory or common law duty to the Company or (3) your
gross violation of the Company's written policies and guidelines.
TERMINATION
In the event that Nutrition 21 terminates your employment or consultancy without
cause, or if you resign because the Company has diminished your authority and
responsibility as Senior Vice President, General Counsel and Secretary (other
than any such diminution which is for cause or which is in connection with a
change in ownership), you will receive: 1) severance equal to two times your
then annual base salary or your annualized consulting fee as of the date of
termination, payable, at your option by notice to the Company, either as a lump
sum or as continuation of your salary or consulting fee for twenty-four months,
in ordinary payroll installments (subject to withholding if required by law); 2)
immediate vesting of all of your Stock Options; and 3) a continuation of your
other benefits as defined herein for the period of salary continuation if
terminated while an employee (but only to the maximum extent permitted under law
or by agreement with third parties), or, if earlier, until you obtain other
employment. Should the parties seek mutual general releases after any such
termination, the terms thereof, and
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any additional consideration to be afforded to either party, shall be as they
may determine by mutual written agreement.
In the event you resign for any other reason or if your employment or
consultancy is terminated with cause, you shall be entitled to no salary or
benefit continuation, and your Stock Options will be vested only to the extent
vested prior to termination.
RETIREMENT BENEFITS
If you retire after reaching age 65, all of your Stock Options shall vest and
shall be exercisable until the end of the 10th year from the date of grant. The
Options shall thereafter expire.
OTHER MATTERS
Except in the event of retirement after reaching age 65, all vested Options
shall be exercisable for one year after termination of employment if the Company
terminated your employment or consultancy without cause, and for 90 days after
termination of employment or consultancy for all other terminations.
This Agreement incorporates by reference the Nutrition 21 Change of Control
Policy as it may be amended from time to time. A copy of the current Policy is
attached as an exhibit to this Agreement. For the purpose of calculating amounts
payable to you under the Policy for a Change of Control that occurs in the 2003
or 2004 fiscal years, the bonus for the prior fiscal year shall be deemed to be
a minimum of $75,000.
You agree that during and after termination of your employment and consultancy
and for a one (1) year period following termination, you will not directly or
indirectly compete with Nutrition 21 or engage in or participate in any business
(in whatever capacity, whether as owner, consultant, adviser, employee or
otherwise), which competes with the business of Nutrition 21. This paragraph may
be enforced by injunction (without posting bond or other security), as well as
by other remedies. The preceding sentence does not prohibit you from passively
owning up to 2% of the voting securities of any entity that files public reports
under the Securities Exchange Act of 1934. Both during and after your employment
and consultancy, you will maintain the confidentiality of the Company's
confidential information, and you will not disclose or use such information
other than for the benefit of the Company during your employment and
consultancy.
Any controversy or claim arising out of or relating to this Agreement, or any
breach or default under this Agreement, shall, with respect to all actions at
law pertaining to such controversy, claim, breach, or default (excepting
herefrom any action for equitable relief with respect thereto), be settled by
arbitration in the city and state where Nutrition 21's principal place of
business is then located, before a single arbitrator in accordance with the
then-prevailing Rules of Commercial Arbitration of the American Arbitration
Association. The arbitrator shall not contravene or vary in any respect any of
the terms or provisions of this Agreement. The award of the arbitrator shall be
final and binding upon the parties hereto, and judgment upon such award may be
entered in any court having jurisdiction thereof.
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You certify that you have not been debarred by the U.S. Food and Drug
Administration under 231. U.S.C. 335a (Federal Food, Drug and Cosmetic Act 306).
This Agreement is the only employment or consulting Agreement in effect between
Nutrition 21 and you, and it supersedes all prior agreements with respect to the
same subject matter.
If you accept this offer of continued employment and consultancy and the
conditions outlined above, would you please sign the original of this letter and
initial each page. Please retain the duplicate for your records.
Yours sincerely,
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
I accept this offer of continued employment and consultancy on the conditions
outlined above.
Signed:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Date: September 12, 2002
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