DIRECTOR AGREEMENT
Exhibit
10.1
This DIRECTOR AGREEMENT is made as of
this 19th day
of October, 2009 (the "Agreement"), by and between NXT Nutritionals Holdings,
Inc., a Delaware corporation (the "Company") and Xxx XxXxxxx (the
“Director”).
WHEREAS, the Company appointed the
Director as a member of the Board of Directors of the Company on October 19,
2009 and desires to enter into an agreement with the Director with respect to
such appointment; and
WHEREAS, the Director wishes to accept
such appointment and to serve the Company on the terms set forth herein, and in
accordance with, the provisions of this Agreement.
NOW, THEREFORE, in consideration of the
mutual covenants contained herein, the parties hereto agree as
follows:
1. Position. Subject
to the terms and provisions of this Agreement, the Company shall cause the
Director to be appointed as non-executive member of the Board of Directors (the
“Board”) to fill an existing but now vacant directorship and the Director hereby
agrees to serve the Company in that position upon the terms and conditions
hereinafter set forth, provided, however, that the Director's continued service
on the Board after the initial term on the Board shall be subject to any
necessary approval by the Company's stockholders. This Agreement is subject to
the satisfactory completion of a third party background check within sixty (60)
days of the date hereof.
2. Duties. During
the Directorship Term (as defined in Section 5 hereof), the Director shall serve
as a member of the Board, and the Director shall make reasonable business
efforts to attend all Board meetings, serve on appropriate subcommittees as
reasonably requested by the Board, make herself available to the Company at
mutually convenient times and places, attend external meetings and
presentations, as appropriate and convenient, and perform such duties, services
and responsibilities and have the authority commensurate to such
position.
The Director will use her best efforts
to promote the interests of the Company. The Company recognizes that the
Director (i) is or may become a full-time executive employee of another entity
and that her responsibilities to such entity must have priority and (ii) sits on
the Board of Directors of other entities. Notwithstanding same, the
Director will use reasonable business efforts to coordinate her respective
commitments so as to fulfill her obligations to the Company and, in any event,
will fulfill her legal obligations as a director. Other than as set forth above,
the Director will not, without the prior notification to the Board, engage in
any other business activity which could materially interfere with the
performance of her duties, services and responsibilities hereunder or which is
in violation of the reasonable policies established from time to time by the
Company, provided that the foregoing shall in no way limit her activities on
behalf of (i) her current employer and its affiliates or (ii) the Board of
Directors of those entities on which he sits. At such time as the
Board receives such notification, the Board may require the resignation of the
Director if it determines that such business activity does in fact materially
interfere with the performance of the Director’s duties, services and
responsibilities hereunder.
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3. Board
Committees. The Director hereby agrees to serve on or
head a to-be-determined Committee of the Board at the Company’s discretion and
to perform all of the duties, services and responsibilities necessary
thereunder.
4. Monetary
Remuneration.
(a) Fees and
Compensation. During the Directorship Term the Director shall receive
the following compensation and benefits:
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A
cash payment of $2,000 per meeting of the Board of Directors in which the
Director is in attendance.
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The
Director's status during the Directorship Term shall be that of an independent
contractor and not, for any purpose, that of an employee or agent with authority
to bind the Company in any respect. All payments and other consideration made or
provided to the Director under Section 4 shall be made or provided without
withholding or deduction of any kind, and the Director shall assume sole
responsibility for discharging, all tax or other obligations associated
therewith.
(b)
Restricted Stock Award. For services rendered, the Director shall
receive 250,000 shares of the Company’s common stock (the “Initial Award”) upon
execution of this Agreement. If the members of the Board of Directors
make introductions and facilitate meetings during the Directorship Term that
lead to the consummation of business deals by the Company other than through the
existing contacts of the Company, the Director shall receive additional shares
(“Stock Award”) of the Company’s common stock based on the amount of revenues
generated by such business deals, regardless of whether the Directorship Term
has expired, according to the following schedule:
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250,000
shares of the Company’s common stock for the first $2.5 million in
revenues generated collectively by the
Directors;
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250,000
shares of the Company’s common stock for the next additional $2.5 million
in revenues generated collectively by the Directors, representing a total
of $5 million in revenues; and
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250,000
shares of the Company’s common stock for the next additional $2.5 million
in revenues generated collectively by the Directors, representing a total
of $7.5 million in revenues.
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In the
event that a change of control occurs resulting from (i) a merger of the Company
into or with another person or any sale or transfer of the equity interests of
the Company in any such case in which the equity holders of the Company
immediately prior to such transaction possess less than 50% of the Company’s or
the surviving entity's issued and outstanding equity interests immediately after
such transaction; or (ii) the sale by the Company of all or substantially all of
its assets, the entire 750,000 shares of the Stock Award shall immediately vest
and be issued to the Director.
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(c) Expense
Reimbursements. During the Directorship Term, the Company shall
reimburse the Director for all reasonable out-of-pocket expenses incurred by the
Director in attending any in-person meetings, provided that the Director
complies with the generally applicable policies, practices and procedures of the
Company for submission of expense reports, receipts or similar documentation of
such expenses. Any reimbursements for allocated expenses (as compared to
out-of-pocket expenses of the Director) must be approved in advance by the
Company.
5. Directorship
Term. The "Directorship Term", as used in this Agreement,
shall mean the period commencing on the date hereof and terminating on the
earliest of the following to occur:
(a) one (1)
year from the date hereof, subject to a one (1) year renewal term upon
re-election by a majority of the shareholders of the Company;
(b) the
death of the Director ("Death");
(c) the termination of the Director
from the position of member of the Board by the mutual agreement of the Company
and the Director;
(d) the removal of the Director from
the Board by the shareholders of the Company;
(e) the
resignation by the Director from the Board if after the date hereof, the Chief
Executive Officer of her current employer determines that the Director's
continued service on the Board conflicts with her fiduciary obligations to her
current employer (a "Fiduciary Resignation"); and
(f) the
resignation by the Director from the Board if the board of directors or the
Chief Executive Officer of her current employer requires the Director to resign
and such resignation is not a Fiduciary Resignation.
6. Director's Representation
and Acknowledgment. The Director represents to the Company
that her execution and performance of this Agreement shall not be in violation
of any agreement or obligation (whether or not written) that he may have with or
to any person or entity, including without limitation, any prior employer. The
Director hereby acknowledges and agrees that this Agreement (and any other
agreement or obligation referred to herein) shall be an obligation solely of the
Company, and the Director shall have no recourse whatsoever against any
stockholder of the Company or any of their respective affiliates with regard to
this Agreement.
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7. Director
Covenants.
(a) Unauthorized
Disclosure. The Director agrees and understands that in the
Director's position with the Company, the Director has been and will be exposed
to and receive information relating to the confidential affairs of the Company,
including but not limited to technical information, business and marketing
plans, strategies, customer information, other information concerning the
Company's products, promotions, development, financing, expansion plans,
business policies and practices, and other forms of information considered by
the Company to be confidential and in the nature of trade secrets. The Director
agrees that during the Directorship Term and thereafter, the Director will keep
such information confidential and will not disclose such information, either
directly or indirectly, to any third person or entity without the prior written
consent of the Company; provided, however, that (i) the Director shall have no
such obligation to the extent such information is or becomes publicly known or
generally known in the Company's industry other than as a result of the
Director's breach of her obligations hereunder and (ii) the Director may, after
giving prior notice to the Company to the extent practicable under the
circumstances, disclose such information to the extent required by applicable
laws or governmental regulations or judicial or regulatory process. This
confidentiality covenant has no temporal, geographical or territorial
restriction. Upon termination of the Directorship Term, the Director will
promptly return to the Company all property, keys, notes, memoranda, writings,
lists, files, reports, customer lists, correspondence, tapes, disks, cards,
surveys, maps, logs, machines, technical data or any other tangible product or
document which has been produced by, received by or otherwise submitted to the
Director in the course or otherwise as a result of the Director's position with
the Company during or prior to the Directorship Term, provided that, the Company
shall retain such materials and make them available to the Director if requested
by her in connection with any litigation against the Director under
circumstances in which (i) the Director demonstrates to the reasonable
satisfaction of the Company that the materials are necessary to her defense in
the litigation, and (ii) the confidentiality of the materials is preserved to
the reasonable satisfaction of the Company.
(b) Non-Solicitation. During
the Directorship Term and for a period of three (3) years thereafter, the
Director shall not interfere with the Company's relationship with, or endeavor
to entice away from the Company, any person who, on the date of the termination
of the Directorship Term, was an employee or customer of the Company or
otherwise had a material business relationship with the Company.
(c) Remedies. The
Director agrees that any breach of the terms of this Section 7 would result in
irreparable injury and damage to the Company for which the Company would have no
adequate remedy at law; the Director therefore also agrees that in the event of
said breach or any threat of breach, the Company shall be entitled to an
immediate injunction and restraining order to prevent such breach and/or
threatened breach and/or continued breach by the Director and/or any and all
entities acting for and/or with the Director, without having to prove damages,
in addition to any other remedies to which the Company may be entitled at law or
in equity. The terms of this paragraph shall not prevent the Company from
pursuing any other available remedies for any breach or threatened breach
hereof, including but not limited to the recovery of damages from the Director.
The Director acknowledges that the Company would not have entered into this
Agreement had the Director not agreed to the provisions of this Section
7.
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The provisions of this Section 7 shall
survive any termination of the Directorship Term, and the existence of any claim
or cause of action by the Director against the Company, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of the covenants and agreements of this Section 7.
8. Indemnification. The
Company agrees to indemnify the Director for her activities as a director of the
Company to the fullest extent permitted by law, and to cover the Director under
any directors and officers liability insurance obtained by the
Company. Further, the Company and the Director agree to enter into an
indemnification agreement substantially in the form of agreement entered into by
the Company and its other Board members.
9. Non-Waiver of
Rights. The failure to enforce at any time the provisions of
this Agreement or to require at any time performance by the other party of any
of the provisions hereof shall in no way be construed to be a waiver of such
provisions or to affect either the validity of this Agreement or any part
hereof, or the right of either party to enforce each and every provision in
accordance with its terms. No waiver by either party hereto of any breach by the
other party hereto of any provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions at that
time or at any prior or subsequent time.
10. Notices. Every
notice relating to this Agreement shall be in writing and shall be given by
personal delivery or by registered or certified mail, postage prepaid, return
receipt requested; to:
If to the Company:
00 Xxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
with a copy to:
Xxxxxx & Xxxxxx, LLP
000 Xxxxx
0 Xxxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
If to the Director:
Xxx X. XxXxxxx
0
Xxxxxxxx Xxxxx
Xxxxxxxxx,
XX 00000
Either of the parties hereto may change
their address for purposes of notice hereunder by giving notice in writing to
such other party pursuant to this Section 10.
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11. Binding
Effect/Assignment. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, executors,
personal representatives, estates, successors (including, without limitation, by
way of merger) and assigns. Notwithstanding the provisions of the immediately
preceding sentence, neither the Director nor the Company shall assign all or any
portion of this Agreement without the prior written consent of the other
party.
12. Entire
Agreement. This Agreement (together with the other agreements
referred to herein) sets forth the entire understanding of the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements,
written or oral, between them as to such subject matter.
13. Severability. If
any provision of this Agreement, or any application thereof to any
circumstances, is invalid, in whole or in part, such provision or application
shall to that extent be severable and shall not affect other provisions or
applications of this Agreement.
14. Governing
Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without reference to
the principles of conflict of laws. All actions and proceedings arising out of
or relating to this Agreement shall be heard and determined in any Delaware
state or federal court and the parties hereto hereby consent to the jurisdiction
of such courts in any such action or proceeding; provided, however, that neither
party shall commence any such action or proceeding unless prior thereto the
parties have in good faith attempted to resolve the claim, dispute or cause of
action which is the subject of such action or proceeding through mediation by an
independent third party.
15. Legal
Fees. The parties hereto agree that the non-prevailing party
in any dispute, claim, action or proceeding between the parties hereto arising
out of or relating to the terms and conditions of this Agreement or any
provision thereof (a "Dispute"), shall reimburse the prevailing party for
reasonable attorney's fees and expenses incurred by the prevailing party in
connection with such Dispute; provided, however, that the Director shall only be
required to reimburse the Company for its fees and expenses incurred in
connection with a Dispute, if the Director's position in such Dispute was found
by the court, arbitrator or other person or entity presiding over such Dispute
to be frivolous or advanced not in good faith.
16. Modifications. Neither
this Agreement nor any provision hereof may be modified, altered, amended or
waived except by an instrument in writing duly signed by the party to be
charged.
17. Tense and
Headings. Whenever any words used herein are in the singular
form, they shall be construed as though they were also used in the plural form
in all cases where they would so apply. The headings contained herein are solely
for the purposes of reference, are not part of this Agreement and shall not in
any way affect the meaning or interpretation of this Agreement.
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18. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original but all of which together shall constitute one and the
same instrument.
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IN
WITNESS WHEREOF, the Company has caused this Director Agreement to be executed
by authority of its Board of Directors, and the Director has hereunto set her
hand, on the day and year first above written.
By: /s/
Xxxxxxx XxXxxxxx
Name: Xxxxxxx
XxXxxxxx
Title: Chief
Executive Officer
DIRECTOR
/s/ Xxx
XxXxxxx
Name: Xxx
XxXxxxx
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