INDEPENDENT CONTRACTOR AGREEMENT
"Celebrity Spokesperson"
THIS AGREEMENT (the "Agreement") is entered into and effective August 1,
2001, between Vital Living Inc., ("VL") and Xxxx Xxxxxxx ("Contractor").
RECITALS
A. Vital Living is engaged in, among other things, the marketing and
distribution of a line of nutritional products for both professional
resellers such as Chiropractors, and direct retail sales to consumers. VL
wishes to use the services of Contractor for the purposes of assisting VL in
promoting and marketing its product line and its business in general.
B. Contractor wishes to provide services to VL as an independent
contractor. In connection with his work, Contractor will be given access to,
generate, or otherwise come into contact with certain proprietary and
confidential information of VL.
NOW, THEREFORE, the parties agree as follows:
TERMS AND CONDITIONS
1. Scope of Work. Contractor will perform the services of "Celebrity
Spokesman" for VL. These services will include but not be limited to,
personal appearances not to exceed three per year, assistance with production
of audio and visual marketing materials for VL products as requested by
providing Contractor's image and voice, preparing written testimonials
regarding VL products and other promotional services as may be requested by
VL. Contractor represents that he is qualified to perform such services and
that he will use reasonable professional skill and his best efforts to
perform the work. Contractor will abide by VL's ordinary policies,
procedures, and rules of conduct and will comport himself lawfully and with
integrity. Contractor will at all times be and represent himself to be an
independent contractor, not an agent or employee.
2. License. Contractor grants VL a perpetual, royalty-free license to
use his name, voice, image, and likeness independently to promote VL or its
products or as incorporated into any audio, visual or written materials (the
"Materials") created by VL in connection with this Agreement. Contractor
further grants VL the right to reproduce the content of any Materials in any
media, including but not limited to distribution over the Internet. All
Materials will be owned by VL and VL may use the Materials without
restriction. Contractor assigns to VL any right, title or interest in or to
the Materials.
3. Place of Work and Materials. Contractor will perform the services
at such location agreed to by VL. Any equipment or materials paid for by VL
and used by Contractor will be the property of VL.
4. Termination. This Agreement will terminate upon:
(a) thirty days written notice of termination by either party; or
(b) VL's determination in good faith that the Contractor has materially
failed to perform the services which the Contractor is at the time
engaged to perform.
Upon termination of this Agreement, the parties will determine in good
faith the extent, if any, to which Contractor will be compensated for
partially completed work or service through the date of termination.
5. Compensation. In consideration of Contractor's services, VL will
grant Contractor options for 45,000 shares of VL stock at $.35 per share
vested over three years in accordance with the terms of the Stock Option
Agreement attached hereto. In addition, VL will pay actual out-of-pocket
expenses incurred by Contractor, provided such expenses are approved in
writing by VL prior to being incurred.
6. Benefits, Insurance, Taxes. Contractor is an independent
contractor and will not be eligible for any benefits offered by VL to its
employees, including but not limited to health care insurance, group term
life insurance, paid vacation days, paid sick leave days and paid holidays,
except as otherwise specifically provided herein. Contractor agrees to
provide worker's compensation and unemployment insurance coverage for itself
and for all employees and agents employed by the Contractor as required by
law and agrees to hold harmless and indemnify VL for any and all claims
arising out of any injury, disability or death of Contractor and any of
Contractor's employees or agents. Contractor is responsible for all federal
and state income and employment taxes attributable to compensation received
pursuant to this Agreement.
7. Confidentiality. In connection with this Agreement, Contractor
will develop, acquire, or be granted access to trade secrets and other
information that is confidential and proprietary to VL or to third parties.
Such information includes but is not limited to designs, processes, know-how,
business or marketing strategies, product plans, research plans, development
work, financial information, sales data, customers lists and information and
supplier lists and information. Contractor will not at any time during or
after termination of this Agreement, directly or indirectly, divulge, use or
permit the use of any confidential or proprietary information, except as
required in the course of this Agreement. Contractor may disclose
confidential information to its employees or agents who need access to such
confidential information; provided, however, that such employees or agents
are informed of the confidential nature of the information and have entered
into an agreement with Contractor regarding VL's confidential and proprietary
information not less restrictive than the requirements of this paragraph of
this Agreement. Upon termination of this Agreement, Contractor will
immediately turn over to VL all materials generated by Contractor or provided
to Contractor by VL or used by Contractor in connection with this Agreement,
including all copies thereof or notes relating thereto, in Contractor's
possession or otherwise subject to Contractor's control. The obligations of
this Paragraph will survive the termination of this Agreement.
Notwithstanding the above, the following materials will not be deemed
confidential:
a. Information which was in the public domain at the time of
disclosure (provided, however, that collection or compilation of publicly
available information will be considered proprietary if VL's collection or
organization of the material would be difficult or time-consuming to
replicate);
b. Information which was published or otherwise became part of
the public domain after disclosure to Contractor through no fault of
Contractor (but only after, and only to the extent that, it is published or
otherwise becomes a part of the public domain); and
c. Information which was received from a third party who did not
acquire it, directly or indirectly, from VL under an obligation of confidence
except where required by law.
Contractor will have the burden of establishing the existence of these
conditions by objective or verifiable evidence. If Contractor believes that
one of these conditions applies, he will promptly so notify VL, stating the
basis for his belief, and will not disclose or use any such information for
30 days following such notice.
8. Miscellaneous.
(a) Severability. The provisions of this Agreement will be deemed
severable and the invalidity or unenforceability of any provision will not
affect the validity or enforceability of the other provision hereof.
(b) Governing Law. This Agreement will be deemed to be a contract made
under the laws of the State of Arizona, and for all purposes, it, plus any
related or supplemental documents and activities, will be construed in
accordance with and governed by the laws of such state.
(c) Entire Agreement. This Agreement constitutes and expresses the
entire agreement and understanding between the parties hereto with respect to
the subject matter, all revisions discussions, promises, representation, and
understanding relative thereto, if any, being herein merged.
(d) Notices. All notices and communications under this Agreement will
be in writing and will be delivered in person, faxed or mailed, postage
prepaid, by overnight express carrier, to the address of the parties listed
herein, or to any other address, as such party will designate in a written
notice to the other party hereto. All notices sent pursuant to the terms of
this section will be deemed received if personally delivered or faxed, then
on the date of delivery, or if sent by overnight express carrier, on the next
business day immediately following the day sent.
(e) Arbitration. The parties intend to negotiate in good faith and
resolve any dispute arising under this Agreement. In the event the parties
are unable to resolve any such dispute, the dispute will be submitted to
binding arbitration in accordance with the rules of the American Arbitration
Association in Phoenix, Arizona or as otherwise agreed to by the parties.
The arbitrator will determine the manner in which the parties are to pay the
costs of such arbitration, including awarding reasonable attorneys' fees.
(f) Assignment. Contractor may not assign to any person any duties or
obligations arising under this Agreement without VL's prior written consent.
(g) Successors. This Agreement will extend to and be binding on the
Contractor and the Contractor's legal representatives, heirs, assigns and
distributees, and on VL and VL's successors and assigns.
VITAL LIVING, INC. CONTRACTOR
By _____________________________ /S/ Xxxx Xxxxxxx
Its ____________________________
Address: Address:
STOCK OPTION AGREEMENT
EFFECTIVE
DATE: August 1, 2001
PLACE: Phoenix, Arizona
PARTIES: Vital Living, Inc., a Nevada corporation (the "Company"), and Xxxx
Xxxxxxx ("Optionee")
RECITALS:
Optionee is an independent contractor for the Company. The Board
of Directors of the Company has designated Optionee to be awarded Option
Rights as more fully described in this Stock Option Agreement (the
"Agreement").
AGREEMENTS:
In consideration of the mutual promises herein contained, the
parties agree as follows:
1. Grant of Option Right. The Company hereby irrevocably grants
to Optionee the right and option (the "Option Right") to purchase all or any
part of an aggregate of up to 45,000 shares of common stock of the Company
(the "Common Shares") on the terms and conditions set forth herein.
2. Purchase Price. The purchase price of the Common Shares
acquired pursuant to the exercise of an Option Right shall be $.35 per Common
Share. The purchase price shall be paid in the manner set forth in
Paragraph 9.
3. Vesting and Repurchase Rights. Optionee's right to acquire
Common Shares pursuant to the exercise of an Option Right as provided herein
shall vest in accordance with the following schedule:
Year 1 15,000 shares Vesting quarterly prorata
Year 2 15,000 shares Vesting quarterly prorata
Year 3 15,000 shares Vesting quarterly prorata
Shares will vest on that last day of the quarter. If control of the Company
is transferred by purchase of the shares of the Company or otherwise or the
Company completes an Initial Public Offering, all vesting shall accelerate by
one year.
4. Term of Option Right. Subject to early termination of the
Option Right as provided in Paragraph 7, the Option Right shall terminate on
the fourth anniversary of the effective date hereof with respect to any of
Common Shares not acquired pursuant to the exercise of an Option Right as of
that date.
5. Exercise of the Option Right. Subject to early termination of
the Option Right as provided in Paragraph 7, Optionee may exercise the Option
Right from time to time as to any part or all of the vested Common Shares
covered hereby.
6. Nontransferability. The Option Right shall not be
transferable otherwise than by will or the laws of descent and distribution,
and the Option Right may be exercised, during the lifetime of Optionee, only
by Optionee. More particularly, but without limiting the generality of the
foregoing, and except as otherwise specified, the Option Right may not be
sold, assigned, transferred, pledged, hypothecated, or disposed of in any
manner, shall not be assignable by operation of law, and shall not be subject
to execution, attachment, or similar process. Any attempted sale,
assignment, transfer, pledge, hypothecation, or other disposition contrary to
the provisions hereof, and the levy of execution, attachment, or similar
process upon the Option Right, shall be null and void and without effect.
7. Termination of Services.
(a) In General. Upon termination of Optionee's Services for
any reason, Optionee shall have no right to any unvested shares of the
Company as of the effective date of termination of Optionee's Services. If
Optionee's Services are terminated otherwise than for Cause or by reason of
death, the Option Right may be exercised to the extent then vested at any
time within 90 days after the date of such termination. If the Services of
Optionee are terminated for Cause, the unexercised portion of the Option
Right shall expire as of the date of such termination. If Optionee dies while
under contract with the Company or within three months after the termination
of Optionee's Services, the Option Right may be exercised by the legal
representative of Optionee's estate, or by any person or persons who shall
have acquired the Option Right directly from Optionee by bequest or
inheritance, at any time within 90 days after the date of Optionee's death,
but only to the extent that shares of the Company have vested. To the extent
the Option Right has not been exercised by such time periods, the Option
Right shall terminate. Nothing in this Agreement shall confer upon Optionee
any right to continue to provide services to the Company or any subsidiary or
affiliate of the Company or interfere in any way with the right of the
Company or any subsidiary or affiliate of the Company to terminate Optionee's
services at any time.
(b) Cause. For purposes of this Agreement, the term "Cause"
shall mean: (a) any embezzlement or misappropriation of corporate funds; (b)
any conduct that is materially detrimental to the reputation of the Company
or that violates any contractual, statutory or common law duty of loyalty to
the Company.
8. Rights as Shareholder. Optionee shall not by reason of the
Option Right have any rights of a shareholder of the Company until Optionee
shall, from time to time, have exercised the Option Right, and, upon each
such exercise, Optionee shall have, with respect to the number of Common
Shares as to which the Option Right is then exercised, all rights of a
shareholder of record from the date of such exercise, irrespective of whether
certificates to evidence the Common Shares with respect to which the Option
Right was exercised shall have been issued on such date.
9. Method of Exercising.
(a) Notice of Exercise/Payment of Purchase Price. Subject to
the terms and conditions of this Agreement, the Option Right may be exercised
by written notice to the Secretary of the Company, at the Company's main
office, or at such other address as the Company, by written notice to
Optionee, may designate from time to time. Such notice shall state the
election to exercise the Option Right and the number of Common Shares in
respect of which the Option Right is being exercised, and shall be signed by
the person or persons exercising the Option Right. Such notice shall be
accompanied by payment of the full purchase price of such Common Shares, by
cashier's or certified check, or by such other form of consideration, if any,
as may be approved by the Board.
(b) Stock Certificates. Upon the exercise of an Option
Right, the Company shall deliver a certificate or certificates representing
any Common Shares acquired hereunder as soon as practicable after the notice
and payment shall be received. The certificate or certificates for the
Common Shares as to which the Option Right shall have been so exercised shall
be registered in the name of Optionee or in the name of any other person or
entity specified in writing by Optionee. If an Option Right shall be
exercised by the legal representative of Optionee's estate, or by any person
or persons who shall have acquired the Option Right directly from Optionee as
a result of Optionee's death, whether by bequest, inheritance, or otherwise,
such notice shall be accompanied by appropriate proof of the right of such
person or persons to exercise the Option Right. All Common Shares that shall
be purchased upon the exercise of an Option Right as provided herein shall be
fully paid and nonassessable.
(c) Legends. All certificates issued upon exercise of Option
Rights shall bear a legend evidencing the restricted nature of the Common
Shares described in Section 13 hereof.
10. Reservation of Common Shares. The Company shall at all times
during the term of the Option Right reserve and keep available such number of
Common Shares as will be sufficient to satisfy the requirements of this
Agreement, shall pay all fees, expenses, and taxes necessarily incurred by
the Company in connection therewith, and shall, from time to time, use its
good faith efforts to comply with all laws, rules, and regulations which, in
the opinion of counsel for the Company, shall be applicable thereto.
11. Adjustment for Recapitalization. In the event of any stock
dividend, stock split, combination of shares, recapitalization or other
change in the capital structure of the Company or any merger, consolidation,
spin-off, split-off, split-up, reorganization, partial or complete
liquidation or other distribution of assets, issuance of warrants or other
rights to purchase securities or any other corporate transaction or event
having an effect similar to any of the foregoing, appropriate adjustments
shall be made by the Board to the number and kind of Common Shares and the
price per Share subject to this Agreement as provided in the Plan.
12. Taxes. Optionee agrees, no later than the date as of which
the value of any Option Right or Common Shares acquired pursuant to this
Agreement first becomes includible in the gross income of Optionee for
federal income tax purposes, to pay to the Company, or make arrangements
satisfactory to the Company regarding payment of, any federal, state or local
taxes of any kind required by law to be withheld with respect to the Option
Right or such Common Shares. The obligations of the Company under this
Agreement shall be conditional on such payment or arrangements, and the
Company shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to Optionee.
13. Securities Law Compliance. Optionee understands that the
Common Shares have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), and are subject to substantial restrictions
on transfer set forth in the Securities Act and the rules and regulations of
the Securities and Exchange Commission adopted thereunder. Optionee
represents and warrants, and shall be deemed to have affirmed such
representations and warranties upon each exercise of an Option Right
hereunder, that Optionee is acquiring the Common Shares for Optionee's
account for investment purposes and not with a view to the distribution of
such Common Shares within the meaning of the Securities Act. All
certificates for Common Shares issued pursuant to the exercise of Option
Rights granted hereunder shall bear a legend evidencing the restricted nature
of the Common Shares.
14. Action Taken in Good Faith. No member of the Board, nor any
officer or employee of the Company acting on behalf of the Board, shall be
personally liable for any action, determination or interpretation taken or
made in good faith with respect to this Agreement.
15. Miscellaneous.
(a) Waiver. The waiver of any provision of this Agreement
will not be effective unless in writing and executed by the party against
whom enforcement of the waiver is sought.
(b) Arbitration. Any dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by
arbitration, conducted before a panel of three arbitrators in Phoenix,
Arizona in accordance with the rules of the American Arbitration Association
then in effect. The decision of the arbitrators shall be final and binding
on the parties, and judgment may be entered on the arbitrators' award in any
court having jurisdiction. The costs and expenses of such arbitration,
including but not limited to attorneys' and other professionals' fees, shall
be borne in accordance with the determination of the arbitrators.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Arizona without regard
to its conflict of laws principles.
(d) Severability. If any provision of this Agreement is held
to be unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall be severable and not affected thereby.
(e) Assignment. The rights and obligations of the Company
and Optionee hereunder shall inure to the benefit of and shall be binding on
their successors and assigns.
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement effective as of the day and year written above.
COMPANY: OPTIONEE:
Vital Living, Inc.
a Nevada corporation
By_____________________________ /S/ Xxxx Xxxxxxx
Its______________________________
