TRANSITION AGREEMENT
Exhibit 10.1
This Transition Agreement (the
“Agreement”) is effective as of August 15, 2018 (the
“Effective
Date”) between FitLife
Brands, Inc., a Nevada corporation (the “Company”), and Xxxxxxx Xxxxxx
(“Xxxxxx”) (each of the foregoing individually a
“Party” and collectively the
“Parties”).
WHEREAS,
Xxxxxx is the Chief Financial Officer of the Company and a member
of the Company’s Board of Directors; and
WHEREAS,
the Parties desire to transition Xxxxxx’ responsibilities
with the Company, including Xxxxxx’ service on the
Company’s Board of Directors, each on the terms and
conditions set forth herein.
NOW,
THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto, intending to be legally bound,
hereby agree as follows:
1. Continued
Employment. Xxxxxx’
employment with the Company shall continue until February 15, 2019
(the “Termination
Date”) at Xxxxxx’
current annual salary, provided,
however, the parties agree and
acknowledge that Xxxxxx’ employment with the Company may be
terminated by either Party at any time after the date hereof, with
or without notice, with or without cause
(“Early
Termination”). The
Parties agree and acknowledge that in the event of Early
Termination, Xxxxxx shall only be entitled to the benefits
specifically set forth in this Agreement.
2. Service
on the Board of Directors. On
the earlier to occur of the date of Early Termination or the
Termination Date, Xxxxxx shall tender his resignation as a member
of the Company’s Board of Directors, effective as of such
date. Such resignation shall be in the form attached hereto
as Exhibit A
(“Resignation”), which Resignation shall be executed and
held by counsel for the Company and delivered to the Company
effective on the date of Early Termination or the Termination Date,
as the case may be (the “Effective
Date”).
3. Severance
Benefits. In the event
Xxxxxx’ employment by the Company is terminated by either
Party prior to the Termination Date, Xxxxxx shall be paid as
severance the amount otherwise due and payable Xxxxxx under the
terms of this Agreement from the date of Early Termination up to
and including the Termination Date (“Severance
Benefits”), which
Severance Benefits shall be paid in equal biweekly installments
corresponding with the Company’s existing payroll practices,
beginning on the Early Termination Date and continuing through the
Termination Date. Xxxxxx acknowledges that the Severance
Benefits represent consideration to which he would not otherwise be
entitled and is in lieu of any rights or claims that he may have
with respect to any Severance Benefits or other remuneration from
the Company. For the avoidance of doubt, Xxxxxx acknowledges and
agrees that he will receive no additional payments other than
Severance Benefits set forth herein, including, but not limited to,
for services rendered for accrued or unused vacation, or paid time
off; provided, however,
that Xxxxxx shall be entitled to reimbursement by the Company for
all bonafide business expenses incurred by Xxxxxx up to and
including the earlier to occur of the Early Termination Date or
Termination Date.
4. Release.
For and in consideration for the continued employment by the
Company and/or the payment to Xxxxxx of the Severance Benefits
Xxxxxx will receive from the Company, as the case may be, Xxxxxx,
on his own behalf and on behalf of his successors and assigns
(collectively referred to as “Releasor”), effective on the date
hereof and as of the Effective Date, hereby release and forever
discharge the Company, its predecessors, successors, corporate
affiliates, parent entities and subsidiaries and their respective
officers, directors, agents, representatives, employees,
consultants and advisors (collectively referred to as
“Releasee”),
from any and all claims, counterclaims, demands, debts, actions,
causes of action, suits, costs, attorneys’ fees, damages,
indemnities, obligations and/or liabilities of any nature
whatsoever (“Release”), whether known or
unknown, which Releasor ever had, now has or hereafter can, shall
or may have against Releasee, for, upon or by reason of any matter,
cause or thing whatsoever from the beginning of the world to the
date of this Release, including, but not limited to, the following:
(i) all such claims and demands directly or indirectly arising out
of or in any way connected with Xxxxxx’ employment with the
Company and/or its affiliated entities, parents and subsidiaries or
the termination of that employment; (ii) all such claims and
demands related to salary, bonuses, commissions, restricted stock,
unvested stock options or unvested warrants, or any other benefits
or compensation which have, are or may be due to me or my
beneficiaries from the Company and/or its affiliated entities,
parents and subsidiaries, including vacation pay, fringe benefits
and/or any other form of compensation; (iii) any
claims
arising under any
federal, state or local law, statute or ordinance, including,
without limitation, Title VII of the Civil Rights Act of 1964, the
Age Discrimination in Employment Act, the Older Workers Benefit
Protection Act, the Americans With Disabilities Act, the Civil
Rights Act of 1991, the Fair Labor Standards Act, the Equal Pay
Act, the Employee Retirement Income Security Act of 1974, the
Family and Medical Leave Act of 1993, the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”), Chapter 48 of the
Nebraska Statutes, Nebraska’s Fair Employment Practices Act,
Part I, Title XXI of the General Laws of the Commonwealth of
Massachusetts, and Chapter 613 of the Nevada Revised Statutes; and
(iv) any claims for breach of contract related to Xxxxxx’
employment, express or implied, including any claim for breach of
any implied covenant of good faith and fair dealing, wrongful
discharge, discrimination, harassment, fraud, defamation,
intentional tort, emotional distress and negligence.
Notwithstanding the foregoing, Releasor does not release any rights
he may have (a) to payment of the Severance Benefits in the event
Xxxxxx’ employment is terminated for any reason prior to the
Termination Date; (b) to payment of accrued benefits under an
employee benefit plan, to the extent and in the manner prescribed
by the plan documents; (c) to payment of bona fide expense
reimbursements; (d) to elect continued healthcare coverage under an
employee health plan pursuant to COBRA, it being understood and
agreed that the cost of health insurance coverage shall be paid by
the Company until the Termination Date; provided, however, in the event of
Early Termination initiated by Xxxxxx, the Company shall not be
responsible for such health care costs as of the Early Termination
date, and although Xxxxxx may continue such coverage, he shall
assume all costs of healthcare insurance as of the date of, and
subsequent to, the Early Termination; (e) to file, or assist in the
investigation of, a charge against the Company with a state or
federal agency with jurisdiction over unlawful employment
practices; or (f) to apply for and receive unemployment
benefits.
5. Covenants. The
benefits provided for under this Agreement are subject to the
following:
5.1 Xxxxxx’
continued compliance with the restrictive covenants set forth in
any other agreement between Xxxxxx and the Company in effect at the
date hereof and continuing through the Termination Date. By
way of example, as of the date of this Agreement, Xxxxxx remains
bound by the restrictive covenants set forth in any grant documents
governing the grant of equity awards to Xxxxxx.
5.2 Until the date of
Early Termination or the Termination Date, Xxxxxx
shall:
(a) transition
and transfer to the Chief Executive Officer, or such executive
determined by the Chief Executive Officer (the “Designated Officer”), all duties
and responsibilities of Xxxxxx that existed at any time prior to
the date of this Agreement, including, but not limited to,
providing to Designated Officer all trade secrets, information
regarding the Company’s products, customers, distributors,
vendors, or otherwise related to the Company’s business,
products or operations, whether or not confidential, within the
knowledge or domain of Xxxxxx;
(b) provide
a list to the Designated Officer of all assets, including
inventory, fixed assets, website domains, or other property,
tangible or intangible, directly or indirectly controlled by, or
under common control with, Xxxxxx as of the date of this Agreement
(“Company
Assets”). To the extent that Xxxxxx has disposed of
any Company Assets prior to the date of this Agreement, directly or
indirectly, Xxxxxx shall provide to the Designated Officer a list
of such Company Assets disposed of, and shall remit to the Company
any consideration received by Xxxxxx for such Company Assets;
and
(c) return
to the Company all Company Assets. The Parties agree and
acknowledge that the term “Company Assets” as used in
this Section 5.3 shall not include any tangible assets with a value
less than $500.00 (product past its expiration date is deemed to
have no value).
5.3
Nondisclosure and
Nonuse of Confidential Information.
(a) Xxxxxx shall not
disclose or use at any time, after the Effective Date, any
Confidential Information (as defined below) of which Xxxxxx became
aware during his employment with the Company, whether or not such
information is developed by him, except to the extent that such
disclosure or use is directly related to and required by
Xxxxxx’ performance in good faith of duties assigned to
Xxxxxx by the Company or is required to be disclosed by law, court
order, or similar compulsion; provided, however, that such disclosure
shall be limited to the extent so required or compelled; and
provided, further, that
Xxxxxx shall give the Company notice of such disclosure and
cooperate with the Company in seeking suitable
protection.
(b) As used in this
Agreement, the term “Confidential Information” means
information that is not generally known to the public and that is
used, developed or obtained by the Company or any Affiliate in
connection with its business, including, but not limited to,
information, observations and data obtained by Xxxxxx while
employed by the Company or any predecessors thereof (including
those obtained prior to the Effective Date) concerning the
Company’s or any affiliate’s (i) business or affairs,
(ii) products or product formula, (iii) fees, costs and pricing
structures, (iv) designs, (v) analyses, (vi) drawings, photographs
and reports, (vii) computer software, including operating systems,
applications and program listings, (viii) flow charts, manuals and
documentation, (ix) data bases, (x) accounting and business
methods, (xi) inventions, devices, new developments, methods and
processes, whether patentable or unpatentable and whether or not
reduced to practice, (xii) customers, clients, suppliers and
publishers and customer, client, supplier and publisher lists,
(xiii) other copyrightable works, (xiv) all production methods,
processes, technology and trade secrets, (xv) business strategies,
acquisition plans and candidates, financial or other performance
data and personnel lists and data, and (xvi) all similar and
related information in whatever form. Confidential Information
shall not include any information that has been published in a form
generally available to the public prior to the date Xxxxxx proposes
to disclose or use such information. Confidential Information shall
not be deemed to have been published merely because individual
portions of the information have been separately published, but
only if all material features comprising such information have been
published in combination.
6. Non-Disparagement. The Parties
agree not to defame, disparage or criticize each other at any
time.
7. Prohibited Activities. Without
the Company’s prior written consent, for a period of one (1)
year from the Effective Date, Xxxxxx shall not (i) solicit,
directly or indirectly, or cause to be solicited the employment of
or employ any person who is now employed by Company (or whose
activities are dedicated to the Company); or (ii) offer or sell
product in direct competition with any product currently offered by
the Company up until the Effective Date, directly or indirectly, or
solicit any current customer of the Company, the result of which is
that the Company’s business with such customer is harmed. The
Parties agree that a product shall be deemed to be currently
offered provided such products generate a minimum of $10,000 in
revenues during the twelve months prior to the Effective
Date.
8. Severability. If
any portion or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other
than those as to which it is so declared illegal or unenforceable,
shall not be affected thereby, and each portion and provision of
this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
9. Mutual
Drafting. Each Party has had
the opportunity to be represented by counsel of its choice in
negotiating this Agreement. This Agreement shall therefore be
deemed to have been negotiated and prepared at the joint request,
direction and construction of the Parties, at arm’s length,
with the advice and participation of counsel, and shall be
interpreted in accordance with its terms without favor to either
Party, and no presumption or burden of proof shall arise favoring
or disfavoring either Party by virtue of the authorship of any of
the provisions of this Agreement.
10. Withholding
Taxes. The Company may
withhold from any amounts payable under this Agreement such
federal, state and local taxes as may be required to be withheld
pursuant to any applicable law or regulation.
11. Governing
Law; Consent to Jurisdiction. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Nebraska
without giving effect conflicts of law principles that would result
in the application of the substantive laws of another
jurisdiction. Each of the Parties consents to the exclusive
jurisdiction of the Federal courts whose districts encompass any
part of the State of Nebraska in connection with any dispute
arising under this Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection
based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions. Each Party waives its right
to a trial by jury. Each Party to this Agreement irrevocably
consents to the service of process in any such proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to such Party at its address set forth
herein. Nothing herein shall affect the right of any Party to
serve process in any other manner permitted by
law.
12. Assignment. Neither
the Company nor Xxxxxx may make any assignment of this Agreement or
any interest herein, by operation of law or otherwise, without the
prior written consent of the other; provided,
however, that the Company may
assign its rights and obligations under this Agreement without the
consent of Xxxxxx to any affiliate or in the event that the Company
shall after the Effective Date effect a reorganization, consolidate
with or merge into, any entity or transfer all or substantially all
of its properties or assets to any entity. This Agreement
shall inure to the benefit of and be binding upon the Company and
Xxxxxx, their respective successors, executors, administrators,
heirs and permitted assigns.
13. Waiver. No
waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving Party. The failure of either
Party to require the performance of any term or obligation of this
Agreement, or the waiver by either Party of any breach of this
Agreement, shall not prevent any subsequent enforcement of such
term or obligation or be deemed a waiver of any subsequent
breach.
14. Notices. Any
and all notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be
effective when delivered in person, consigned to a reputable
national courier service or deposited in the United States mail,
postage prepaid, registered or certified, and addressed to Xxxxxx
at his last known address on the books of the Company or, in the
case of the Company, at its principal place of business, attention
of Chief Executive Officer, or to such other address as any Party
may specify by notice to the other.
15. Entire
Agreement. This Agreement
constitutes the entire agreement among the Parties hereto
pertaining to the subject matter hereof and supersedes all prior
and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written, of the Parties with respect
to such subject matter.
16. Amendment.
This Agreement may be amended or modified only by a written
instrument signed by Xxxxxx and by an expressly authorized
representative of the Company.
17. Headings. The
headings and captions in this Agreement are for convenience only,
and in no way define or describe the scope or content of any
provision of this Agreement.
18. Counterparts. This
Agreement may be executed in two or more counterparts, each of
which shall be an original and all of which together shall
constitute one and the same instrument.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the
date and year first above written.
XXXXXX
_____________________________
Xxxxxxx
Xxxxxx
_____________________________
By: Xxxxxx
Xxxx
Title: Chief Executive
Officer
EXHIBIT
A
[DATE]
Re:
Resignation
To the
Board of Directors of FitLife Brands, Inc.
Please
accept this letter as my official resignation from the Board of
Directors of FitLife Brands, Inc. (the “Company”), and from the Board of
Directors of each direct and indirect subsidiary of the Company,
effective as of _______ __, 201_.
My
resignation is not the result of any disagreement with the
Company’s management regarding any matter related to the
Company or otherwise.
Respectfully,
Xxxxxxx
Xxxxxx
