Exhibit 10.3
EMPLOYMENT AGREEMENT
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Agreement dated as of the 19/th/ day of October, 2001, by and between
XXXXXX.XXX, INC., a Delaware corporation having its principal place of business
at 0000 X. Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx Xxxxx, Xxxxxxx 00000 (the
"Corporation") and XXXXXX XXXXX-ONA (the "Executive").
W I T N E S S E T H:
WHEREAS, the Corporation desires to employ Executive as an executive
officer, and Executive is willing to accept such employment, all subject to the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements set forth herein, the parties hereto agree as follows:
1. EMPLOYMENT AND TERM. Subject to the terms and conditions hereof, the
Corporation hereby employs Executive, and Executive hereby accepts employment by
the Corporation, for a period of three (3) years commencing on October 19, 2001
(the "Commencement Date") and ending on the third anniversary of the
Commencement Date, unless terminated sooner pursuant to the provisions hereof.
2. DUTIES. Executive shall serve the Corporation initially as an Executive
Vice President and, after relocation to Florida, as its Chief Operating Officer.
Executive's primary responsibilities, subject to the direction of the
Corporation's Board of Directors and Chief Executive Officer shall be as set
forth on Exhibit "A" attached hereto. However, Executive shall perform such
executive, administrative, management, marketing and other services and duties
as are incidental to the offices he holds and as may, from time to time, be
assigned to him by the Board of Directors of the Corporation or a committee
thereof or the Chief Executive Officer. Executive shall devote all of his
business and professional time to the performance of his duties hereunder.
Executive further agrees to serve as an officer or director of any parent,
subsidiary or affiliate of the Corporation upon the Corporation's request, with
no additional compensation beyond that set forth in Paragraph 3 below. The
Executive's principal place of employment shall initially be the executive
offices of the Corporation's subsidiary, DietSmart, Inc., in New York, New York
for a transition period of up to six (6) months, after which time the
Corporation may relocate Executive to its home office in Deerfield Beach,
Florida, although the Executive understands and agrees that during the
transition period he will be required to travel frequently to and spend
extensive time in the Florida home office. In the event of Executive's
relocation to Deerfield Beach, Florida, at the request of the Corporation, the
Corporation shall reimburse Executive for all reasonably incurred relocation
expenses up to a maximum amount of $20,000.
3. COMPENSATION.
(a) As base compensation for the services to be rendered by Executive
hereunder, the Corporation agrees to pay to Executive an annual base salary in
the amount of One Hundred Sixty Thousand Dollars ($160,000), such salary to be
paid in equal biweekly installments for so long as Executive is employed by the
Corporation. Executive's base compensation shall be reviewed and increased at
least annually, with such increases being a minimum of six percent (6%) per
year.
(b) The Corporation shall institute a bonus and/or profit sharing plan
effective January 1, 2002. Such plan shall provide that all eligible full time
employees of the Corporation or its subsidiary DietSmart, Inc. shall participate
in the plan so long as the Corporation's annual operating performance
(commencing in 2002) meets or exceeds the criteria, which shall be determined
when bonus compensation is to be awarded to employees. The Executive shall be
consulted by the Corporation's Chief Executive Officer prior to the submission
of the plan to the Corporation's compensation committee.
(c) The Executive shall receive an initial grant of 150,000 employee stock
options (the "Options") under the Corporation's Stock Option Plan (the "Plan")
with an exercise price equal to the fair market value of the Corporation's
common stock at the Commencement Date. Such Options shall be in the form set
forth on Exhibit "B" attached hereto. The options, which shall be exercisable
for a period of five (5) years from the date of grant, shall vest over two (2)
years in four (4) equal semi-annual installments, with the first installment
vesting six (6) months after the Commencement Date. All unvested options held
by the Executive shall vest upon the following events: (i) a sale of all or
substantially all of the assets, business and goodwill of the Corporation to
another corporation; (ii) the merger or consolidation of the Corporation with
another corporation in which the Corporation is not the survivor; (iii) the
acquisition by a person or a group that is not currently a beneficial holder of
an equity interest in the Corporation of at least 51% of the outstanding stock
of the Corporation; or (iv) consummation of a "going private" transaction in
which the Corporation's securities are no longer registered under the Securities
Exchange Act of 1934 and its securities are no longer publicly traded.
Notwithstanding the specific grant of options pursuant to this Section 3(c) the
Executive may be entitled to receive additional options if so determined in the
sole discretion of the Corporation's Board of Directors or compensation
committee.
(d) Executive shall be entitled, on a basis consistent with the
Corporation's policy, to reimbursement for all normal and reasonable travel,
entertainment and other expenses necessarily incurred by him in the performance
of his obligations hereunder.
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The Corporation shall reimburse Executive for such expenses upon presentation to
the Corporation, within a reasonable time after such expenses are incurred, of
an itemized account of such expenses, together with such vouchers or receipts
for individual expense items as the Corporation may from time to time require
under its established policies and procedures.
(e) Executive shall be entitled to participate in, or benefit from, in
accordance with the eligibility and other provisions thereof, such medical
insurance, pension, retirement, or other fringe benefit plans or policies as the
Corporation may make available to, or have in effect for, its executive
personnel from time to time. Plans and benefits may be modified or eliminated by
the Corporation from time to time as it determines in its sole discretion.
However, the Corporation agrees that it will always make available a medical
insurance plan to its employees and executive personnel. Executive shall also
be entitled to two (2) weeks of vacation and an additional two (2) weeks of
personal (including sick) time annually and other similar benefits in accordance
with the policies of the Corporation from time to time in effect for executive
personnel.
(f) Except as hereinafter provided, the Corporation shall pay Executive,
for any period during the term of this Agreement during which he is unable fully
to perform his duties because of physical or mental disability or incapacity, an
amount equal to the compensation due him for such period in accordance with this
Agreement, less the aggregate amount of all income disability benefits which for
such period he may receive under or by reason of (i) any applicable compulsory
state disability law, (ii) the Federal Social Security Act, (iii) any applicable
workmen's compensation law or similar law, and (iv) any plan towards which the
Corporation or any parent, subsidiary or affiliate of the Corporation has
contributed or for which it has made payroll deductions, such as group accident,
disability or health policies.
4. TERMINATION ON DISABILITY OR DEATH.
(a) In the event that Executive, due to physical or mental disability or
incapacity, is unable to substantially perform his duties hereunder for a period
of three (3) successive months, the Corporation or Executive shall then have the
right to terminate this Agreement and Executive's employment hereunder upon
thirty (30) days' prior written notice, provided, however, that in the event
that Executive shall recommence rendering services and performing all of his
duties hereunder within such thirty (30) day notice period, such notice shall be
vitiated, and the Corporation and the Executive shall no longer have the right
to terminate based on the disability event described in the notice. Executive's
employment shall terminate immediately upon his death.
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(b) Upon termination of Executive's employment by reason of his death or
disability as aforesaid, Executive, or in the case of Executive's death,
Executive's personal representatives, shall be entitled to receive base
compensation earned or accrued to the date of such termination and not already
paid, as well as a pro-rata portion of any earned and unpaid bonus less any
benefits paid to Executive by reason of such disability. Such accrued base
compensation shall be paid to the Executive within 30 days following the date of
termination.
(c) In the event of the termination of this Agreement for any reason other
than death, Executive shall have the right to purchase, and the Corporation
shall assign to Executive, any insurance policy maintained by the Company on the
life of Executive then in effect, for a price equal to the net cash surrender
value thereof at the time of such termination.
5. TERMINATION FOR CERTAIN CAUSES AND OTHER REASONS.
(a) In the event of the (i) willful material misconduct, gross negligence
or bad faith of Executive in the performance of his duties hereunder, (ii)
material breach of any provisions of Paragraphs 6, 7 or 8, or (iii) conviction
of the Executive for any felony under federal or state law, this Agreement and
Executive's employment hereunder may be terminated by the Corporation without
prior notice. This Agreement may also be terminated by the Corporation in the
event that there has been a material failure of performance by Executive of his
duties hereunder and such failure has not been cured by Executive within a
period of sixty (60) days of his receipt from the Corporation of a written
notice of proposed termination specifying the particular failure(s) of
performance, and the proposed remedy upon which the proposed termination will be
based, if not cured. In the event of termination pursuant to this subparagraph
5(a) the Corporation shall have no further obligation to the Executive except to
pay the base compensation earned or accrued to the date of termination, and the
pro-rata share of any earned and unpaid bonus, and upon such termination all
options granted to Executive shall lapse and be no longer exercisable.
(b) The Corporation may also terminate this Agreement if the Executive
refuses to relocate after requested to do so by the Corporation in accordance
with Paragraph 2 above. In the event of termination pursuant to this
subparagraph 5 (b), the Corporation shall have no further obligation to the
Executive except to pay the base compensation earned or accrued to the date of
termination and not already paid and the pro-rata share of any earned and unpaid
bonus. Upon such termination, Executive shall have three months to exercise any
options that are vested on the date of termination.
(c) The Corporation may also terminate this Agreement for any reason other
than the reasons set forth in Paragraphs 5 (a) (b) above. If the Corporation
elects to terminate under this Paragraph 5(c), or if the Executive resigns for
Good Reason (as defined below) during the first six (6) months of this
Agreement, as a severance
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allowance, Executive will be entitled to receive a lump sum payment of $150,000
plus a pro-rata portion of any earned but unpaid bonus. If the Corporation
elects to terminate under this Paragraph 5(c) or if the Executive resigns for
Good Reason during months seven (7) through eighteen (18) of this Agreement,
Executive shall receive a lump sum payment of $200,000 plus a pro-rata portion
of any earned but unpaid bonus. If the Corporation elects to terminate under
this Paragraph 5(c), or if the Executive resigns for Good Reason after nineteen
(19) months of this Agreement, Executive shall receive a lump sum payment of
$250,000 plus a pro-rata portion of any earned but unpaid bonus. Such lump sum
payment shall be paid to the Executive within 30 days following the date of
termination. If, at any time during the initial term of this Agreement, the
Corporation elects to terminate under this Paragraph 5(c) or the Executive
resigns for Good Reason: (i) there shall be an immediate vesting of all unvested
Options that would have vested during the four (4) months succeeding the date of
termination; (ii) with respect to all of Executive's vested Options before they
lapse, Executive shall have a period of seven and one-half (7 1/2) months after
the date of termination within which to exercise such vested Options; and (iii)
all health benefits in effect for Executive as of the date of termination shall
be continued by the Corporation, at its sole cost and expense, through the last
day of the initial term of this Agreement.
For purposes of this Agreement, "Good Reason" shall mean: (i) an adverse
and material change in the Executive's position without Executive's prior
consent, where such change has: (a) a negative financial effect on Executive;
or (b) represents a material change in role, title, nature of duties, employee
benefits or working conditions, or (ii) a requirement by the Corporation that
Executive relocate to a location other than Deerfield Beach, Florida; (iii) a
material breach by the Corporation of its obligations to Executive; (iv) a
direction to Executive to take illegal or unethical actions which direction is
not withdrawn within seven (7) days following written notice by Executive to the
directing party; and (v) where the Chief Executive Officer or any member of the
Board of Directors tells another person, whether written or oral, false and
harmful information that affects the Executive's reputation and hinders his or
her current and future working relationships.
6. DISCLOSURE AND ASSIGNMENT OF DISCOVERIES.
(a) Executive hereby covenants and agrees to disclose promptly and fully,
in writing, whenever possible, to the Corporation and its attorneys and
designated representatives, without additional compensation, all ideas,
formulae, programs, systems, devices, inventions, processes, business concepts,
discoveries, improvements, developments, works of authorship, product marks and
designations, technical information and know-how, whether or not patentable,
copyrightable or otherwise protectable relating to personalized diet and
nutrition programs (together, the "Developments"), which he may conceive,
develop, reduce to practice, acquire or make, alone or jointly with others:
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(i) during the term of his employment with the Corporation, whether
during or outside of the usual hours of work; and
(ii) during the Post-Termination Period, as defined in Section 8
below.
Notwithstanding the foregoing, no obligation is being imposed on Executive
to assign to the Corporation any Development for which no equipment, supplies,
facility, or trade secret information of the Corporation was used and that was
developed entirely on Executive's own time, unless: (a) such Development relates
(1) to the Corporation's business or (2) to the Corporation's actual or
demonstrably anticipated research or development, or (b) the Development results
from any work performed by Executive for the Corporation.
Executive hereby agrees that all of his right, title and interest in and to
such Developments shall be deemed the sole and exclusive property of the
Corporation and shall be subject to the confidentiality provisions of Section 7
as confidential information of the Corporation.
(b) Executive, when requested and required to do so, either during or
after the term of his employment with the Corporation, shall:
(i) assign and convey to the Corporation his entire right, title and
interest in and to the Developments to the extent not owned by the Corporation
as a matter of law from the time of their creation and execute, acknowledge and
deliver all such further instruments and documents, in form and substance
satisfactory to the Corporation, as it shall deem reasonably necessary or
advisable to evidence the vesting in the Corporation of all right, title and
interest of Executive in and to the Developments;
(ii) assist the Corporation and its agents in preparing patent
applications, domestic and foreign, covering the Developments;
(iii) sign and deliver all such applications and assignments of the
same to the Corporation; and
(iv) generally give all information and testimony, sign all papers
and do all things which may be needed or requested by the Corporation to the end
that the Corporation may obtain, extend, reissue, maintain and enforce United
States and foreign patents covering the Developments.
(c) The Corporation shall bear all costs and expenses which it causes to
be incurred in obtaining, extending, issuing, reissuing, maintaining and
enforcing such patents and in investing and perfecting title thereto in the
Corporation, and agrees further to pay Executive for any time which it may
require of him therefor, and for any
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services that may be required of him pursuant to subparagraph 6(b), subsequent
to the termination of his employment with the Corporation, such payment to be at
an hourly rate equivalent to that at which Executive is paid at the time of the
termination of his employment by the Corporation.
(d) In the event of the unenforceability of all or part of the foregoing
provisions of this Paragraph 6, as determined by a court of competent
jurisdiction, Executive hereby transfers and assigns to the Corporation such
lesser interests in the Developments, including, without limitations, any and
all United States and foreign patent rights therein and renewals thereof, as may
be determined by such a court to be a reasonable grant of interests under the
circumstances, but, in any event, and without limitation, Executive shall be
deemed to have granted to the Corporation not less than an irrevocable, non-
exclusive license, with the right to sublicense others, to manufacture, use,
lease and sell the Developments which have not been assigned to the Corporation
under the provisions of subparagraph 6(b), without payment of any royalty.
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7. CONFIDENTIALITY
(a) Executive understands and hereby acknowledges that as a result of his
employment with the Corporation, he will necessarily become informed of, and
have access to, certain valuable and confidential information of the Corporation
and any of its subsidiaries, joint ventures and affiliates, including, without
limitation, inventions, trade secrets, technical information, know-how, plans,
specifications, identity of customers and suppliers, and that such information,
even though it may be developed or otherwise acquired by Executive, is the
exclusive property of the Corporation to be held by Executive in trust and
solely for the Corporation's benefit. Accordingly, except as provided under this
Agreement, Executive hereby agrees that he shall not, at any time, either during
or subsequent to his employment hereunder, use, reveal, report, publish,
transfer or otherwise disclose to any person, corporation or other entity, any
of the Corporation's confidential information without the prior written consent
of the Corporation, except: (i) to officers and employees of the Corporation and
to responsible persons who are in a contractual, employment or fiduciary
relationship with the Corporation or who have a need for such information for
purposes in the interest of the Corporation, (ii) as required by a court or in a
legal or administrative proceeding; and (iii) for such information that legally
and legitimately is or becomes of public knowledge from sources other than
Executive. The Corporation's confidential information shall not include any
information known by the Executive prior to the Commencement Date or that
becomes known to the Executive from sources other than the Corporation.
(b) Upon the termination of his employment with the Corporation for any
reason whatsoever, Executive shall promptly deliver to the Corporation all
drawings, manuals, letters, notes, notebooks, reports and copies thereof, and
all other materials, including, without limitation, those of a secret and
confidential nature, relating to the Corporation's business which are in
Executive's possession or control.
8. NON-COMPETITION. Executive agrees that, during the term of this Agreement
and for the Post-Termination Period (as defined below), he shall not, anywhere
in the United States of America or elsewhere in the world (or in such smaller
area or for such lesser period as may be determined by a court of competent
jurisdiction to be a reasonable limitation on the competitive activity of
Executive), directly or indirectly:
(i) engage in a directly competitive line of business to the
business carried on by the Corporation to be defined as any diet and fitness
business, both on- and offline, either for his own account or with or for anyone
else;
(ii) solicit or attempt to solicit business of any customers of the
Corporation for diet and fitness products or services the same or similar to
those offered, sold, produced or under development by the Corporation at the
time of the beginning of the Post-Termination Period;
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(iii) intentionally attempt to induce any person, firm or entity with a
material business relationship of the Corporation to cease or materially reduce
the level of business it conducts with the Corporation;
(iv) solicit or attempt to solicit (except through general newspaper or
other print media solicitations) for any business endeavor any employee of the
Corporation;
(v) render any services as an officer, director, employee, partner,
consultant or otherwise to, or have any interest as a stockholder, partner,
lender or otherwise in, any person which is so engaged in a diet and fitness
business.
Notwithstanding anything to the contrary contained in this Paragraph 8, the
provisions hereof shall not prevent the Executive from purchasing or owning up
to five percent (5%) of the voting securities of any corporation, the stock of
which is publicly traded.
The Post-Termination Period shall be as follows: (a) in the event that the
Executive's employment terminates during the first six (6) months of this
Agreement, the Post-Termination Period shall be one (1) year; (b) in the event
the Executive's employment terminates for any reason during months seven (7)
through eighteen (18), then the Post-Termination Period shall be one (1) year
and three (3) months; and (c) if Executive's employment terminates after
nineteen (19) months of this Agreement, then the Post-Termination Period shall
be for a period of one (1) year and nine (9) months after the expiration or
termination of employment.
9. REMEDIES. Because the Corporation does not have an adequate remedy at law
to protect its business from Executive's competition or to protect its interests
in its trade secrets, privileged, proprietary or confidential information and
similar commercial assets, the Corporation shall be entitled to injunctive
relief, in addition to such other remedies and relief that would, in the event
of a breach of the provisions of Paragraphs 6, 7 and 8, be available to the
Corporation.
10. SURVIVAL. The provisions of Paragraphs 6, 7 and 8 shall survive termination
of this Agreement for any reason.
11. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of
the parties and merges and supersedes any prior or contemporaneous agreements
between the parties pertaining to the subject matter hereof. This Agreement may
not be changed or terminated orally, and no change, termination or attempted
waiver of any of the provisions hereof shall be binding unless in writing and
signed by the party against whom the same is sought to be enforced; PROVIDED,
HOWEVER, that Executive's compensation may be increased at any time by the
Corporation without in any way affecting any of the other terms and conditions
of this Agreement, which in all other respects shall remain in full force and
effect. Failure of a party to enforce one or more
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of the provisions of this Agreement or to require at any time performance of any
of the obligations hereof shall not be construed to be a waiver of such
provisions by such party nor to in any way affect the validity of this Agreement
of such party's right thereafter to enforce any provision of this Agreement, nor
to preclude such party from taking any other action at any time which it would
legally be entitled to take.
12. SUCCESSORS AND ASSIGNS. Neither party shall have the right to assign this
personal Agreement, or any rights or obligations hereunder, without the consent
of the other party; PROVIDED, HOWEVER, that upon the sale of all or
substantially all of the assets, business and goodwill of the Corporation to
another corporation, or upon the merger or consolidation of the Corporation with
another corporation, this Agreement shall inure to the benefit of, and be
binding upon, both Executive and the corporation purchasing such assets,
business and goodwill, or surviving such merger or consolidation, as the case
may be, in the same manner and to the same extent as though such other
corporation were the Corporation. Subject to the foregoing, this Agreement shall
inure to the benefit of, and bind, the parties hereto and their legal
representatives, heirs, successors and assigns.
13. ADDITIONAL ACTS. Executive and the Corporation each agrees that he or it
shall, as often as requested to do so, execute, acknowledge and deliver and
file, or cause to be executed, acknowledged and delivered and filed, any and all
further instruments, agreements or documents as may be necessary or expedient in
order to consummate the transactions provided for in this Agreement and do any
and all further acts and things as may be necessary or expedient in order to
carry out the purpose and intent of this Agreement.
14. COMMUNICATIONS. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been given
at the time when mailed in any United States post office enclosed in a
registered or certified postage prepaid envelope or via personal delivery,
messenger, reputable overnight courier or fax (with hard copy to follow) and
addressed to the addresses set forth at the beginning of this Agreement, or to
such other address as any party may specify by notice to the other party;
PROVIDED, HOWEVER, that any notice of change of address shall be effective only
upon receipt.
15. CONSTRUCTION. The headings of the Paragraphs of this Agreement have been
inserted for convenience of reference only and shall in no way restrict or
otherwise affect the construction of the terms or provisions hereof. References
in this Agreement to Sections are to the sections of this Agreement. All terms
and words used in this Agreement, regardless of the number, letter or gender
used, shall be deemed to include any other gender, letter or number as the
context or use thereof may require or permit.
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16. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed to be an original and all of which together shall
be deemed to be one and the same instrument.
17. SEVERABILITY. If any provision of this Agreement is held to be invalid or
unenforceable by a court or tribunal of competent jurisdiction, such invalidity
or unenforceability shall not affect the validity and enforceability of the
other provisions of this Agreement and the provision held to be invalid or
unenforceable shall be carried out as nearly as possible according to its
original terms and intent to eliminate such invalidity or unenforceability.
18. LAW; VENUE. This Agreement will be construed in accordance with the laws
of the State of Florida. The party seeking to enforce the provisions of this
Agreement will choose the venue of such action, and the non-enforcing party
agrees to submit to and waives any objections to jurisdiction or venue in that
proceeding.
19. TIME. Time is of the essence of each and every covenant, condition and
obligation of this Agreement. Except as herein expressly permitted, neither
party hereto shall have the right to extend any date, the date of expiration of
any period of time or the date for the performance of any act or the
satisfaction of any condition. Failure by a party hereto to perform timely its
covenants, agreements and obligations hereunder shall, unless waived in writing
by the other party hereto, be a material default under this Agreement. Any
time period provided for herein which ends on a Saturday, Sunday or a legal
holiday in the State of Florida will extend to 5:00 p.m. of the next business
day.
20. EXHIBITS. All of the exhibits attached to this Agreement are hereby
incorporated into, and made a part of, this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first set forth above.
CORPORATION: XXXXXX.XXX, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx, Chairman
EXECUTIVE:
By: /s/ Xxxxxx X. Xxxxx-Ona
--------------------------------
Xxxxxx X. Xxxxx-Ona
Exhibits
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"A" - Primary Responsibilities
"B" - Option Agreement
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EXHIBIT A
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XXXXXX X. XXXXX-XXX
X. Prior to Relocation.
Executive Vice President with primary responsibility for the following:
. Operations liaison between the Corporation and DietSmart subsidiary and
their offices
. General business operations
. Mergers and acquisitions and investments opportunities
. General strategic decisions
. Shall report directly to the Chief Executive Officer
B. After Relocation to Florida.
Xx. Xxxxx-Ona shall be the Chief Operating Officer with the following
responsibilities:
. He shall have the authority and responsibility to oversee and coordinate
most aspects of the Corporation's operations, including having a
significant role in (i) deciding what projects will be undertaken; (ii)
senior level management decisions (including all major strategic, financial
and operational decisions); (iii) prioritizing projects; (iv) organizing
and restructuring business operations; (v) participating in any investment
road show or fund-raising activity; (vi) management of and coordination
with any and all offices and subsidiaries of the Corporation; (vii)
overseeing and leading any merger, acquisition, investment or other similar
opportunities or transactions for the Corporation. All departments of the
Corporation with the exception of the finance department, the Chief
Financial Officer and the President, shall report to the Executive,
including, without limitation, the customer service, marketing, business
development, and legal departments or their functional equivalents. Xx.
Xxxxx-Ona shall report directly to the Chief Executive Officer of the
Corporation.
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EXHIBIT "B"
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of this ____ day of ___________, 2001, between
xXxxxx.xxx, Inc., a Delaware corporation (the "Company"), and
______________________________ (the "Optionee").
WHEREAS, the Company desires to grant to the Optionee an option to purchase
shares of its common capital stock (the "Shares") pursuant to Optionee's
Employment Agreement dated as of _______________, 2001 (the "Employment
Agreement") under the Company's Stock Option Plan (the "Plan"); and
WHEREAS, the Company and the Optionee understand and agree that any terms
used herein have the same meanings as in the Plan (the "Optionee" being referred
to in the Plan as a "Participant").
NOW, THEREFORE, in consideration of the following mutual covenants and for
other good and valuable consideration, the parties agree as follows:
1. GRANT OF OPTION
The Company grants to the Optionee the right and option to purchase all or
any part of an aggregate of 150,000 Shares (the "Option") on the terms and
conditions and subject to and with the benefit of all the limitations set
forth herein and in the Plan, which is incorporated herein by reference.
The Optionee acknowledges receipt of a copy of the Plan. The Option
granted herein is intended to be a Nonstatutory Option as defined in the
Plan. In the event of any inconsistencies between the terms of the
Employment Agreement and the Plan, the expressed terms of the Employment
Agreement shall govern.
2. PURCHASE PRICE
The purchase price of the Shares subject to the Option shall be ______
Dollar __________ Cents ($_____) per Share.
3. EXERCISE OPTION
The Option shall be exercisable as follows:
EXERCISE PERIOD
Commencement Expiration
Number of Shares Date Date
---------------- ------------ ----------
37,500 ____________, 2002 ___________, 2006
37,500 ____________, 2002 ___________, 2006
37,500 ____________, 2003 ___________, 2006
37,500 ____________, 2003 ___________, 2006
The Employment Agreement shall govern those events that require
acceleration of the foregoing vesting schedule.
4. TERMINATION OF EMPLOYMENT
The terms and conditions of Article V, Sections F of the Plan shall not
apply, and the provisions of the Employment Agreement shall govern
Optionee's exercise rights in the event of termination of employment.
Optionee shall have 7.5 months after the expiration of the term of the
Employment Agreement to exercise any vested options.
5. EXERCISE OF OPTION AND ISSUANCE OF STOCK
The Option may be exercisable in whole or in part (to the extent that it is
exercisable in accordance with its terms) by the giving written notice to
the Company. Such written notice shall be signed by the person exercising
the Option, shall state the number of Shares with respect to which the
Option is being exercised, shall contain the warranty, if any, required
under the Plan and shall specify a date (other than a Saturday, Sunday or
legal holiday) not less than five (5) nor more than ten (10) days after the
date of such written notice, as the date on which the Shares will be
purchased, at the principal office of the Company during ordinary business
hours, or at such other hour and place agreed upon by the Company and the
person or persons exercising the Option, and shall otherwise comply with
the terms and conditions of this Agreement and the Plan. On the date
specified in such written notice (which date may be extended by the Company
on one occasion for up to 30 days if any law or regulation requires the
Company to take any action with respect to the Shares prior to the issuance
thereof) the Company shall accept payment for the Shares and shall deliver
to the Optionee an appropriate certificate or certificates for the Shares
as to which the Option was exercised.
The Option price of any Shares shall be payable at the time of exercise as
determined by the Optionee either:
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(a) in cash, by certified check or bank check, or by wire transfer; or
(b) in whole shares of the Company's common stock; or
(c) any combination of (a) or (b) above.
The fair market value of the stock to be applied toward the purchase price
shall be determined as of the date of exercise of the Option in a manner
consistent with the determination of fair market value with respect to the
grant of an Option under the Plan. Any certificate for shares of
outstanding stock of the Company used to pay the purchase price shall be
accompanied by a stock power duly endorsed in blank by the registered
holder of the certificate, with signature guaranteed in the event the
certificate shall also be accompanied by instructions from the Optionee to
the Company's transfer agent with respect to disposition of the balance of
the shares covered thereby. The Company shall pay all original issue taxes
with respect to the issuance of Shares pursuant hereto and all other fees
and expenses necessarily incurred by the Company in connection therewith.
The holder of this Option shall have the rights of a stockholder only with
respect to those Shares covered by the Option which have been registered in
the holder's name in the share register of the Company upon the due
exercise of the Option.
{The provision in the last sentence of Section I of Article V of the Plan
shall not apply.}
6. NON-ASSIGNABILITY
Unless otherwise permissible under Article V. Section K. of the Plan, this
Option shall not be transferable by the Optionee and shall be exercisable
only by the Optionee, or the Optionee's heirs and legatees in the event of
Optionee's death except as the Plan may otherwise provide.
7. PURCHASE FOR INVESTMENT
{Section M. of Article V.} of the Plan shall apply, with the following
modifications: (a) Optionee shall only be required to represent that he
is not purchasing the Shares with a view towards distribution in violation
of the applicable securities laws; and (b) in the event of a placement of a
legend on the Option shares, the opinion of counsel required shall be of a
counsel reasonably acceptable to the Corporation.
8. AMENDMENT
No amendment of the Plan shall be effective to amend this Agreement or
alter or impair the rights of the Optionee hereunder.
9. NOTICES
Any notices required or permitted by the terms of this Agreement or the
Plan shall be given by registered or certified mail, return receipt
requested, addressed as follows:
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To the Company: xXxxxx.xxx, Inc.
0000 X. Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Chairman
To the Optionee: ______________________________
______________________________
______________________________
______________________________
or to such other address or addresses of which notice in the same manner
has previously been given. Any such notice shall be deemed to have been
given when mailed in accordance with the foregoing provisions.
10. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the laws
of the State of Florida.
11. BINDING EFFECT
This Agreement shall (subject to the provisions of Section 6 hereof) be
binding upon the heirs, executors, administrators, successors and assigns
of the parties hereto.
IN WITNESS WHEREOF, the Company has caused these presents to be executed on its
behalf by its duly authorized representative and the Optionee has hereunder set
his/her hand, all on the day and year first above written.
xXxxxx.xxx, Inc.
By:_____________________________
Xxxxx X. Xxxxxx
Its: Chairman
________________________________
_____________________, Optionee
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