August 25, 2006
EXHIBIT
10.1
August
25, 2006
Mr.
_______________
__________________
__________________
Dear
Xxxx:
This
Letter Agreement (“Agreement”) is between you and Nutrition 21, Inc. (“Nutrition
21” or the “Company”) regarding your position as Vice President of Nutrition 21
reporting to the Chief Executive Officer (and, in the absence of a Chief
Executive Officer, to the Board of Directors), and is for the period commencing
on this date and ending on the day before the third anniversary of this
date.
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1)
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GENERAL
You agree that your employment by Nutrition 21 shall be full time
(telecommuting shall be included as part of your commitment of full
time
employment) and that you shall engage in no other business or employment.
However, you may supervise your passive investments, and you may
act as a
consultant, and receive therefor compensation in either cash or equity
(as
determined at your discretion) on activities that would not be violative
of the non-compete provisions referred to in Section 8)
were you personally to engage in such activities, provided that you
do not
devote such time to such consulting services as in the reasonable
opinion
of the CEO of N21 detracts significantly from the performance of
your
duties under this Agreement. You may serve as a non-executive director
on
Boards of other companies only with the written permission of the
Nutrition 21 Board, provided that no permission shall be necessary
for
service as a non-executive director on the Boards of charitable
entities.
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2)
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COMPENSATION
Your direct annualized base compensation will be $225,000, and will
be
paid in ordinary payroll installments, subject to withholding and
similar
deductions.
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3)
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BONUS
AND STOCK OPTIONS
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a)
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For
each full fiscal year of Nutrition 21 during your employment in which
Nutrition 21 has positive EBITDA, Nutrition 21 will pay to you a
bonus
equal to 0.25% (but not more than $50,000) of N21’s direct response sales
in excess of $30 million during such fiscal year, plus 2.5% (but
not more
than $100,000) of direct response operating profits in excess of
$3
million during such fiscal year.
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b)
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The
following definitions apply if Nutrition 21, during the period (the
“Option Period”) from the Closing until December 31, 2007, grants to
similarly situated executives options to purchase in excess of 2,000,000
shares of Nutrition 21 common stock (“Common
Stock”):
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i)
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“All
Options” means all options granted by Nutrition 21 during the Option
Period to all its executives who are similarly
situated;
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ii)
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“Excess
Options” means the number by which All Options exceeds
2,000,000;
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iii)
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“Your
Similar Employee Percentage” means the percentage that during the Option
Period your base salary is of the total of your base salary and the
base
salaries of executives who are similarly
situated.
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c)
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If
you are employed throughout the Option Period, Nutrition 21 will
during
the Option Period grant to you a number of options equal to Your
Similar
Employee Percentage of the Excess Options. Your options shall have
the
same vesting and other terms that apply to the Excess Options, provided
that the exercise price of your options shall not be less per share
than
the closing price of a share of Common Stock on the date of
grant.
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d)
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Share
amounts in this Section shall be appropriately adjusted to reflect
stock
splits, reverse stock splits, combinations and similar
matters.
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e)
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If
you are employed after the Option Period you will be eligible for
additional options for this later period at the discretion of the
Board.
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4)
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OTHER
BENEFITS Coverage for group insurance, e.g., medical, dental, life
insurance, AD&D, Short and Long Term Disability, Business Travel
Insurance, etc. as well as the Nutrition 21 sponsored savings plan
will be
provided to the extent offered to similarly situated executives.
You will
have a $500 per month car allowance. Nutrition 21 will reimburse
you for
your reasonable out of pocket expenses, but not for your home, office,
secretarial or similar or related expenses other than telephone expenses.
You will seek prior approval of disbursements that are atypical in
amount
or kind.
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5)
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VACATION
Annual paid vacation and holidays will accrue in accordance with
Nutrition
21's vacation policy and any unused vacation time shall be paid upon
any
termination of your employment.
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6)
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PERIOD
OF EMPLOYMENT Your employment with Nutrition 21 shall be for a three
-year
term beginning on this date, but Nutrition 21 may terminate your
employment For Cause or without cause as provided in Section 7, and
you
may terminate your employment for Good Reason as provided in Section
7.
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7)
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TERMINATION
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a)
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Termination
for Good Reason
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i)
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Your
employment will be considered to have been terminated by you for
“Good
Reason” if you give notice to Nutrition 21 that Nutrition 21 has breached
any provision of this Agreement and has failed to cure the breach
within
30 days after the Company has received from you a notice of this
breach
and a demand that it be cured.
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b)
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Termination
for Cause
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i)
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Your
employment will be considered terminated by the Company “For Cause” if the
Board notifies you that such termination is on account of: (i) your
failure to perform your duties for Nutrition 21 other than any such
failure resulting from your disability, after (A) a written demand
for
performance was delivered to you by the Board of Directors which
specifically identified the manner in which the Board believes that
you
have not performed your duties, and (B) your failure to reasonably
comply
with such demand within thirty days after notice to you,(ii) your
failure
to perform your duties in accordance with the Company’s Standards of
Business Conduct (iii) your engagement in conduct materially and
demonstrably injurious to Nutrition 21, (iv) your violation of any
provision of the Confidentiality and Non-compete Agreement incorporated
into Section 8),
or (v) your conviction of any felony from which all appeals have
been
exhausted.
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c)
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Your
Rights after Termination
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i)
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In
the event that you resign other than for Good Reason or if your employment
is terminated For Cause, you shall be entitled to receive your salary
and
benefits accrued to the date of termination, and you shall not be
entitled
to any salary or benefit
continuation.
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ii)
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In
the event that you resign for Good Reason or Nutrition 21 terminates
your
employment other than For Cause, and you thereafter execute and deliver
to
Nutrition 21 a general release in standard form, you will receive
a
continuation of your base salary, in ordinary payroll installments
and
subject to withholding, for 12 months or, if less, for the balance
of your
employment term hereunder.
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2
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8)
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There
are incorporated herein each of the provisions of the Confidentiality
and
Non-Compete Agreement between the Company and you dated as of this
date.
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9)
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The
federal and state courts sitting in the State of New York shall have
exclusive jurisdiction with respect to this Agreement. Trial by jury
is
waived.
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Any
and
all notices or other communications required or permitted to be given under
any
of the provisions of this Agreement shall be in writing and shall be deemed
to
have been duly given when personally delivered or when forwarded for priority
delivery by Federal Express or other recognized courier, addressed, if to the
Company, to it at its then principal offices, attn: President, and, if to you,
to you at 000 Xxxx 00xx
Xxxxxx -
Xxx. 00X, Xxx Xxxx, XX 00000 (or at such other address as any party may specify
by notice to all other parties given as aforesaid).
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10)
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This
employment agreement supersedes all prior agreements and understandings
(whether in writing, oral in board resolutions or otherwise) with
respect
to the subject matter of this agreement. Without limiting the generality
of the foregoing, it sets forth all of your rights to compensation
and
other benefits both during your employment and thereafter. It may
not be
changed or terminated orally. All notices hereunder shall be in
writing.
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If
you
agree with the foregoing, would you please sign and return the original of
this
letter to Nutrition 21. Please retain the duplicate for your
records.
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Yours
sincerely,
___________________
Xxxx
Xxxxxxxxxx
Chief
Executive Officer
Nutrition
21, Inc.
0
Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx,
XX 00000
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Agreed
to
and accepted:
___________________
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