Exhibit 10.25
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
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UNDER
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1998 STOCK OPTION PLAN
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THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is made and
entered into effective as of the 12th day of February, 2002, by and between
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC. (hereinafter referred to as the
"Company"), and Xxxxxxxxxxx Xxxx (hereinafter referred to as the "Option
Holder").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the parties hereto hereby
agree as follows:
1. Grant Under 1998 Stock Option Plan. Subject to the terms and
conditions of this Agreement and the Company's 1998 Stock Option Plan (as
amended from time to time, the "Plan"), the Company hereby grants to the Option
Holder an option (the "Option") to purchase 50,000 shares (the "Option Shares")
of the Common Stock of the Company, $.001 par value per share (the "Common
Stock"), at the exercise price of $0.12 per share (the "Option Price"). The
Option is granted effective as of February 12, 2002 (the "Granting Date"). The
Option hereby granted shall expire thirty (30) days after the delivery of this
Agreement to the Option Holder unless the Option Holder signs and returns this
Agreement to the Company within said thirty (30) days.
2. Grant as Nonqualified Stock Option; Other Options. The Option is not
intended to qualify as an incentive stock option under Section 422(b) of the
Internal Revenue Code of 1986 (the "Code"). The Option is a Nonqualified Stock
Option as provided in the Plan. The Option is in addition to any other options
heretofore or hereafter granted to the Option Holder by the Company, but a
duplicate original of this instrument shall not effect the grant of another
option.
3. Vesting of Option. If the Option Holder has continued to be employed
or retained by the Company on the following dates, the Option Holder may
exercise the Option for the number of shares set forth opposite the applicable
date:
Date Number of Shares
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January 31, 2002 50,000
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The foregoing rights are cumulative and, while the Option Holder
continues to be employed or retained by the Company, may be exercised up to and
including the date which is four (4) years from the Granting Date.
4. 1998 Stock Option Plan. The Option is granted pursuant to and is
governed in all respects by the Plan including, without limitation, Section 7
(Terms and Conditions of Options) and Section 8 (Terms and Conditions) of the
Plan. The rights of the Option Holder are subject to all of the terms and
conditions of this Agreement and the Plan, and the provisions of the Plan are
hereby incorporated by reference into this Agreement. In the event of any
conflict between the terms of this Agreement and the terms of the Plan, the
terms of the Plan shall control. The Option Holder hereby acknowledges receipt
of a copy of the Plan and agrees to be bound by all terms and provisions thereof
and further agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under this Agreement
or the Plan. Unless otherwise defined in this Agreement or unless the context
otherwise requires, capitalized terms used herein shall have the same meanings
as in the Plan.
5. Right of First Refusal. The Company shall have a right of first
refusal with respect to all of the Option Shares of Option Holder as provided in
Section 10 (Right of First Refusal) of the Plan.
6. Partial Exercise. Exercise of the Option up to the extent provided
in Section 3 above may be made in part at any time and from time to time within
the above limits.
7. Method of Exercising Option. Subject to the terms and conditions of
this Agreement, the Option may be exercised by thirty (30) days' prior written
notice to the Company, at the principal executive office of the Company, or to
such transfer agent as the Company shall designate. Such notice shall state the
election to exercise the Option and the number of Option Shares in respect of
which it is being exercised and shall be signed by the person or persons so
exercising the Option. Such notice shall be accompanied by payment of the full
Option Price of such shares. The Option Price for all Option Shares shall be
payable in United States Dollars in cash or by check, or any combination of the
foregoing, equal in amount to the aggregate of the Option Price for all Option
Shares purchased. In no event shall the Company be required to issue any Option
Shares prior to admission of such shares to listing on any stock exchange on
which the Company's Common Stock may then be listed, and unless the Option
Shares are at that time effectively registered or, in the opinion of counsel for
the Company, exempt from registration under the Securities Act of 1933, as
amended (the "1933 Act"), the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and other federal and state laws and regulations having similar
requirements.
8. Agreement to Purchase for Investment. The Option Holder agrees that
unless otherwise consented to in writing by the Company, the Option Shares will
be purchased for investment only and not with any intention to resell or
distribute the same and that upon the exercise of the Option or any part thereof
the Option Holder will deliver to the Company a representation in writing, in
such form as the Company shall require, that the Option Shares are being
acquired for investment purposes only and will not be resold except in
compliance with 1933 Act and in compliance with all other federal and state
securities laws.
9. Legend. The certificates representing the Option Shares will bear a
conspicuous legend in substantially the following form:
The securities represented by this certificate have been
acquired for investment purposes only and have not been
registered under the Securities Act of 1933, as amended, or
under applicable state securities laws. Such securities may
not be sold, transferred, pledged or hypothecated unless the
registration provisions of said laws have been complied with
or unless approved by the Company, which approval may be
conditioned upon receipt of an opinion of counsel (acceptable
to the Company) that such registration is not required.
Transfer of these securities is further restricted by the
terms of a Stock Option Agreement between the Company and the
holder hereof.
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10. Option Not Transferable. The Option is not transferable or
assignable except by will or by the laws of descent and distribution. During the
Option Holder's lifetime only the Option Holder shall have the right to exercise
the Option.
11. No Obligation to Exercise Option. The grant and acceptance of the
Option imposes no obligation on the Option Holder to exercise it.
12. No Rights as Stockholder until Exercise. The Option Holder shall
have no rights as a stockholder with respect to Option Shares subject to this
Agreement until a stock certificate therefor has been issued to the Option
Holder and such Option Shares are fully paid for. Except as is expressly
provided in the Plan with respect to certain changes in the capitalization of
the Company, no adjustment shall be made for dividends or similar rights for
which the record date is prior to the date such stock certificate is issued.
13. Withholding Taxes. If any portion of the Option is treated as a
Nonqualified Stock Option, the Option Holder hereby agrees that the Company may
withhold from the Option Holder's wages the appropriate amount of federal, state
and local withholding taxes attributable to the Option Holder's exercise of such
Nonqualified Stock Option. At the Company's discretion, the amount required to
be withheld may be withheld in cash from such wages, or (with respect to
compensation income attributable to the exercise of the Option) in kind from the
Common Stock otherwise deliverable to the Option Holder on exercise of the
Option. The Option Holder further agrees that, if the Company does not withhold
an amount from the Option Holder's wages sufficient to satisfy the Company's
withholding obligation, the Option Holder will reimburse the Company on demand,
in cash, for the amount underwithheld.
14. Cancellation of Options. The Committee may, in its sole discretion,
in cases involving a serious breach of conduct by an Option Holder or activity
of an Option Holder in competition with the business of the Company, cancel the
Option, whether or not vested, in whole or in part. Such cancellation shall be
effective as of the date specified by the Committee. Without limitation,
activities which shall constitute a serious breach of conduct include: (i) the
disclosure or misuse of confidential information or trade secrets; (ii)
activities in violation of the Company's policies; (iii) the violation or breach
of any material provision in any employment contract or other agreement between
the Option Holder and the Company; (iv) engaging in conduct relating to the
Option Holder's employment with or retention by the Company for which either
criminal or civil penalties may be sought; and (v) engaging in activities which
adversely affect or which are inimical, contrary or harmful to the interests of
the Company or its business operations. The determination of whether an Option
Holder has engaged in a serious breach of conduct or activity in competition
with the business of the Company shall be determined by the Committee in good
faith and in its sole discretion.
15. Lock-up Agreement. The Option Holder agrees that the Option Holder
will not, for a period of at least 120 days following the effective date of the
Company's initial distribution of securities in an underwritten public offering
to the general public pursuant to a registration statement filed with the
Securities and Exchange Commission, directly or indirectly, sell, offer to sell
or otherwise dispose of the Company's securities other than any securities which
are included in such initial public offering.
16. Integrated Agreement. This Agreement and the Plan constitute the
entire understanding and agreement of the Option Holder and the Company with
respect to the subject matter contained herein and therein, and there are no
agreements, understandings, restrictions, representations, or warranties among
the Option Holder and the Company other than those as set forth or provided for
herein and therein. To the extent contemplated herein and therein, the
provisions of this Agreement and the Plan shall survive any exercise of the
Option and shall remain in full force and effect.
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17. Right of Company to Terminate Services. Nothing herein contained
shall affect the right of the Company to terminate the Option Holder's services,
responsibilities or duties or his authority to represent the Company at any time
for any reason whatsoever, subject to other written agreements with the Option
Holder, if any.
18. Enumeration and Headings. The enumeration and headings contained in
this Agreement are for convenience of reference only and shall not control or
affect the meaning or construction of any of the provisions of this Agreement.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which shall together constitute one and the same agreement.
20. Governing Law. This Agreement and the respective rights and
obligations of the parties hereto shall be governed by and construed in
accordance with the laws of the State of Florida, without regard to its
conflicts of laws provisions.
IN WITNESS WHEREOF the Company and the Option Holder have caused this
Agreement to be executed as of the day and year first above written.
COMPANY:
HEALTH & NUTRITION SYSTEMS INTERNATIONAL, INC.
By: /s/Xxx Xxxxxx
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Title: Director
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OPTION HOLDER:
/s/Xxxxxxxxxxx Xxxx
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Signature
Xxxxxxxxxxx Xxxx
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Print Name
0000 Xxxxxxxxxx Xxxx
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Xxxxxx Xxxxxxx
Xxxx Xxxx Xxxxx, XX 00000
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City State Zip
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Social Security Number
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