EXECUTION COPY
 
EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made this 16th day of February,
2011, effective as of August 16, 2010 (the “Effective Date”) except as otherwise
provided herein, by and among VITACOST.COM, INC., a Delaware corporation (the
“Company”) and JEFFREY HOROWITZ, an individual residing at 7273 Fisher Island
Drive, Fisher Island, FL 33109 (the “Employee”).  This Agreement shall supersede
and replace, in its entirety, that certain Consulting Agreement, dated August 2,
2010, by and between the Company and the Employee (the “Consulting Agreement”)
and, as of the Effective Date hereof, the Consulting Agreement shall hereby
terminate and no longer have any force or effect, and neither the Company nor
the Employee shall have any further rights, benefits, claims and/or obligations
thereunder, except as otherwise provided herein.
 
WITNESSETH:
 
WHEREAS, the Company and the Employee entered into the Consulting Agreement
whereby the Employee agreed to provide certain management consulting services to
the Company;
 
WHEREAS, on August 16, 2010, the Board of Directors of the Company (the “Board”)
terminated, without cause, the services of its Chief Executive Officer;
 
WHEREAS, the Board recognizes that the Employee possesses extensive knowledge
and experience regarding the businesses and operations in which the Company is
engaged; and
 
WHEREAS, the Board desires to hire the Employee as its Chief Executive Officer,
and the Employee is willing to accept such position, on the terms and conditions
set forth hereinafter.
 
NOW, THEREFORE, in consideration of the premises and mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are mutually acknowledged, the Company and the Employee
hereby agree as follows:
 
1.           Definitions.  When used in this Agreement, except as otherwise
defined herein, the following terms shall have the following meanings:
 
(a)         “Accrued Obligations” means:
 
(i)        all accrued but unpaid Base Salary through the end of the Term of
Employment;
 
(ii)       any accrued but unpaid Annual Bonus through the end of the Term of
Employment;
 
(iii)      any unpaid or unreimbursed expenses incurred in accordance with
Company policy, including amounts due under Section 5(a) hereof, to the extent
incurred during the Term of Employment; and

 
 

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(iv)     any accrued but unpaid benefits provided under the Company’s employee
benefit plans, subject to and in accordance with the terms of those plans.
 
(b)         “Annual Bonus” means the bonus provided for in Section 4(b) hereof.
 
(c)         “Base Salary” means the salary provided for in Section 4(a) hereof.
 
(d)         “Cause” means:
 
(i)        willful misconduct or gross negligence by the Employee resulting, in
either case, in material economic harm to the Company or any of its Related
Entities;
 
(ii)       a willful and continuing failure to perform Employee’s duties and
responsibilities hereunder including, without limitation, a willful and
continuing failure by the Employee to carry out the reasonable and lawful
directions of the Board;
 
(iii)      the Employee’s fraud, embezzlement, misappropriation of funds or
breach of trust in connection with his services hereunder;
 
(iv)      the Employee’s commission, indictment or conviction, or a plea of nolo
contendere, of a felony; or
 
(v)       a willful material breach by the Employee of this Agreement.
 
The Board’s determination of Cause shall be final, binding and conclusive with
respect to all parties.  For purposes of this Section, an act or failure to act
shall not be “willful” if done by the Employee in good faith and the Employee
reasonably believed such action or inaction was in the best interests of the
Company.
 
(e)         “Change in Control” means, and shall be deemed to have occurred if
on or after the Effective Date, (i) any “person” or “group” (as such terms are
used in Section 13(d) and (14(d) of the Securities Exchange Act of 1934, as
amended) (such person or entity as is agreed to by a majority of the Pre-Change
in Control Directors) becomes the “beneficial owner” (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the voting power represented by
the Company’s then outstanding Voting Securities, (ii) any “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) becomes the “beneficial owner”, directly or indirectly,
of securities of the Company entitling such beneficial owner to elect a majority
of the Company’s Board, (iii) at any time during any period of two consecutive
years that begins on or after the date that this Agreement is executed by the
Company, individuals who at the beginning of such period constitute the Board
cease for any reason to constitute a majority of the Board; for purposes of the
preceding clause any new director whose election to the Board or whose
appointment or election was approved by a majority of the directors prior to the
date of the appointment or election shall be considered as having been on the
Board at the beginning of such period,, or (iv) the Company is liquidated or
dissolved or adopts a plan of liquidation or dissolution or the stockholders of
the Company approve a sale of all or substantially all of the Company’s assets.

 
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(f)          “Commencement Date” means August 16, 2010.
 
(g)         “Competitive Activity” means an activity that is in competition with
the Company in any of the States within the United States or its territories or
possessions, or countries within the world, in which the Company or any of its
Related Entities conducts business with respect to a business in which the
Company or any of its Related Entities engaged while the Employee was employed
by the Company or any of its Related Entities.
 
(h)         “Confidential Information” means all trade secrets and information
disclosed to the Employee or known by the Employee as a consequence of or
through the unique position of his employment and/or service with the Company or
any Related Entity (including information conceived, originated, discovered or
developed by the Employee and information acquired by the Company or any Related
Entity from others) prior to or after the date hereof, and not generally or
publicly known (other than as a result of unauthorized disclosure by the
Employee), about the Company or any Related Entity or its business. Confidential
Information includes, but is not limited to, inventions, ideas, designs,
computer programs, circuits, schematics, formulas, algorithms, trade secrets,
works of authorship, mask works, developmental or experimental work, processes,
techniques, improvements, methods of manufacturing, know-how, data, financial
information and forecasts, product plans, marketing plans and strategies, price
lists, customer lists and contractual obligations and terms thereof, data,
documentation and other information, in whatever form disclosed, relating to the
Company or any Related Entity, including, but not limited to, financial
statements, financial projections, business plans, listings and contractual
obligations and terms thereof, components of intellectual property, unique
designs, methods of manufacturing or other technology of the Company or any
Related Entity.  Notwithstanding anything to the contrary, “Confidential
Information” shall not include information, including, but not limited, to
general industry knowledge, which is not separable from any Confidential
Information and was known to the Employee prior to his receipt of the same from
the Company.
 
(i)          “Disability” means the Employee’s inability, or failure, to perform
the essential functions of his position, with or without reasonable
accommodation, for any period of ninety (90) days or more in any one hundred and
eighty (180) day period, by reason of any medically determinable physical or
mental impairment.
 
(j)          “Expiration Date” means the date on which the Term of Employment,
including any renewals thereof, shall expire.
 
(k)          “Good Reason” means a termination of employment by the Employee due
to any of the following: (i) a diminution in Employee’s title or a material
change in Employee’s job responsibilities, authority, title, or scope of duties,
without Employee’s written consent: (ii) any reduction in Employee’s Base Salary
or benefits without Employee’s written consent other than pursuant to an
across-the-board reduction for the senior-level executives of the Company; (iii)
any material breach by the Company of any of its obligations under this
Agreement other than a breach not occurring in bad faith and that is remedied by
the Company within thirty (30) days after receipt of notice by the Company of
such material breach from the Employee; (iv) any requirement that Employee
relocate to a location more than thirty (30) miles from Boca Raton, FL; or (v)
upon or in connection with a Change in Control.

 
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(l)          “Options” means a right granted to the Employee under Section 5(c)
hereof to purchase Common Stock.
 
(m)        “Related Entity” means any subsidiary, and any business, corporation,
partnership, limited liability company or other entity in which the Company or a
subsidiary of the Company holds, controls or owns a substantial voting or
economic ownership interest, directly or indirectly.
 
(n)         “Restricted Period” shall be the Term of Employment and the one (1)
year period immediately following termination of the Term of Employment.
 
(o)         “Severance Period” means the period equal to the lesser of (i)
twelve (12) months from the Termination Date or (ii) the period from the
Termination Date to the fourth (4th) anniversary of the Commencement Date.
 
(p)         “Stock Option Plan” means the Company’s 2007 Stock Award Plan, as
amended from time to time, and any successor plan thereto.
 
(q)         “Term of Employment” means the period during which the Employee
shall be employed by the Company pursuant to the terms of this Agreement.
 
(r)          “Termination Date” means the date on which the Term of Employment
ends.
 
(s)          “Voting Securities” means any securities of the Company that are
entitled to vote generally in the election of directors.
 
2.           Employment.
 
(a)          Employment and Term.  The Company hereby agrees to employ the
Employee and the Employee hereby agrees to serve the Company during the Term of
Employment on the terms and conditions set forth herein.
 
(b)          Duties of Employee.
 
(i)        In General. Except as hereinafter provided, during the Term of
Employment under this Agreement, the Employee shall be employed and serve as the
Chief Executive Officer of the Company, and shall have such duties typically
associated with such title, including, without limitation, supervising
operations and management of the Company and its Related
Entities.   Notwithstanding the prior sentence, the parties acknowledge and
agree that from the Effective Date through the date hereof, Employee has been
serving as the Company's interim Chief Executive Officer.  The Employee shall
have such power and authority as shall reasonably be required to enable him to
perform his duties hereunder.  The Employee shall report to the Board, and shall
perform faithfully, industriously, and to the best of the Employee’s ability,
experience, and talents, all of the duties and responsibilities set forth
hereunder to the reasonable satisfaction of the Board.  The Executive shall
devote his full business time, attention and efforts to the performance of his
duties under this Agreement, render such services to the best of his ability,
and use his reasonable best efforts to promote the interests of the
Company.  During the summer months, Employee may perform his duties and work
from home for a maximum of ten (10) work days (but no more than two (2)
consecutive work days).

 
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(ii)       No Conflicts.  The Employee shall not engage in any other business or
occupation during the Term of Employment, including, without limitation, any
activity that (1) conflicts with the interests of the Company or its Related
Entities, (2) interferes with the proper and efficient performance of his duties
for the Company, or (3) interferes with the exercise of his judgment in the
Company’s best interests.  Notwithstanding the foregoing or any other provision
of this Agreement, it shall not be a breach or violation of this Agreement for
the Employee to (v) serve on corporate, civic, community or charitable boards or
committees and perform any related activities, (w) serve on any technical,
business or operations advisory council or board, (x) hold an ownership or other
interest in, receive compensation or other benefits from or found, any entity,
(y) deliver lectures, fulfill speaking engagements or teach at educational
institutions, or (z) engage in passive investment activities and manage personal
investments, so long as such activities do not significantly interfere with or
significantly detract from the performance of the Employee’s responsibilities to
the Company in accordance with this Agreement.
 
(c)          Board Membership.  Throughout the Term of Employment under this
Agreement, the Company shall nominate the Employee as a member of the Board (or
remain as a member of the Board), shall use commercially reasonable efforts to
recommend such election of the Employee to its shareholders, and, without
limiting the foregoing, support the Employee for election to the Board in a
manner no less rigorous and favorable than the manner in which the Company
supports its other nominees for election to the Board in the aggregate.
 
3.           Term.  The Term of Employment under this Agreement, and the
employment of the Employee hereunder, shall commence on the Commencement Date
and shall expire on the fourth (4th) anniversary of the Commencement Date,
unless sooner terminated in accordance with Section 6 hereof.   This Agreement
may be renewed for an additional period(s) only upon the mutual written
agreement of the parties.
 
4.           Compensation.
 
(a)          Base Salary.  The Employee shall receive a Base Salary at the
annual rate of Four Hundred Thousand Dollars ($400,000) during the Term of
Employment, with such Base Salary payable in installments consistent with the
Company's normal payroll schedule, subject to applicable withholding and other
taxes.   Upon execution of this Agreement, the Company will pay to Employee an
amount equal to the difference between Employee’s Consulting Fee payable under
the Consulting Agreement and the Base Salary payable hereunder for the period
from the Effective Date through the date of execution of this
Agreement.  Notwithstanding anything to the contrary, during the Term of
Employment, so long as the Employee is being paid the Base Salary under this
Agreement, the Employee acknowledges and agrees to forgo any compensation and/or
fees (including, without limitation, stock options and/or other equity based
awards) the Employee otherwise would have been entitled to as a member of the
Board; provided, however, upon termination of the Employee’s employment with the
Company and its Related Entities, to the extent that the Employee continues to
be a member of the Board, the Employee shall then be entitled to commence
receiving the compensation and/or fees (including, without limitation, stock
options and/or other equity-based awards) generally provided and/or payable to
members of the Board in accordance with the Company’s policies therefor.

 
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(b)          Annual Bonus.  In addition to the Base Salary, in each year during
the Term of Employment under this Agreement, the Employee shall be entitled to
participate in the Company’s annual incentive compensation plan applicable to
senior-level executives as established and modified from time to time by the
Compensation Committee of the Board in its sole discretion, which plan the
Company undertakes to establish (the “Bonus Plan”).  For each such year, under
the Bonus Plan, except as hereinafter provided, the Employee will have an
opportunity to earn an annual bonus payment in a target amount up to Two Hundred
and Seventy-Five Thousand Dollars ($275,000) (the “Annual Bonus”), based on the
satisfaction of certain performance goals, which goals shall be established by
the Compensation Committee of the Board, within its sole discretion, within the
first three (3) months of each year to which they shall relate.  Notwithstanding
the foregoing, the Employee shall receive a guaranteed Annual Bonus of (i)
Seventy Five Thousand Dollars ($75,000) for the period from the Commencement
Date through December 31, 2010 and (ii) Two Hundred Seventy-Five Thousand
Dollars ($275,000) for calendar year 2011, less applicable withholding and other
taxes. Annual Bonus amounts will be payable at such times and in such form as
set forth in the Bonus Plan.
 
5.           Expenses and Other Benefits.
 
(a)          Reimbursement of Expenses.  During the Term of Employment, the
Company shall reimburse the Employee for all reasonable expenses actually paid
or incurred by the Employee in the course of, pursuant to and in furtherance of
the business of the Company, upon proper submission of supporting documentation
by the Employee and in accordance with such policies and guidelines as from time
to time may be reasonably established by the Company for its Chief Executive
Officer.  The Company shall reimburse the Employee for up to a maximum of One
Hundred Fifty Thousand Dollars ($150,000) of such expenses in each year, it
being expressly acknowledged and agreed that such reimbursements shall be
inclusive of (and not in addition to) any expenses incurred for travel between
his home in New York and the Company's offices in Florida.   Notwithstanding
anything to contrary, any reimbursements by the Company to the Employee of any
eligible expenses under this Agreement that are not excludable from the
Employee’s income for Federal income tax purposes (the “Taxable Reimbursements”)
shall be made by no later than the last day of the taxable year of the Employee
following the year in which the expense was incurred.  The amount of any Taxable
Reimbursements, and the value of any in-kind benefits to be provided to the
Employee, during any taxable year of the Employee shall not affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other
taxable year of the Employee. The right to Taxable Reimbursement, or in-kind
benefits, shall not be subject to liquidation or exchange for another benefit.
 
(b)         Compensation/Benefit Programs.  During the Term of Employment, the
Employee shall be entitled to participate in all medical, dental,
hospitalization, accidental death and dismemberment, disability, travel and life
insurance plans, and any and all other plans and programs as are presently and
hereinafter offered by the Company to its executive personnel, including
savings, pension, profit-sharing and deferred compensation plans, subject to the
general eligibility and participation provisions set forth in such plans and/or
programs.

 
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(c)          Stock Options/Additional Severance Payment.
 
(i)        Stock Options.  Except as hereinafter provided, effective as of the
date (the “New Plan Effective Date”) on which the shareholders of the Company
approve a new equity compensation plan (the “New Plan”), the Company shall grant
to the Employee a nonqualified stock option to purchase 950,000 shares of the
common stock of the Company (the “Options”) under (and therefore subject to all
terms and conditions of) the Company’s new equity compensation plan and all
rules and regulations of the Securities and Exchange Commission applicable to
the Company’s equity plans then in effect, and pursuant to an associated stock
option agreement to be entered into between the Company and the Employee, so
long as either (1) the Employee is then still an employee of the Company or (2)
if Employee is no longer an employee, in the event that the Employee's
employment hereunder  has been previously terminated under Section 6 hereunder
for any reason other than by the Company pursuant to Section 6(b) and the New
Plan Effective Date is within one (1) year after the date of termination of
Employee’s employment hereunder.  The Options shall have an exercise price per
share equal to the closing sale price of a share of the common stock of the
Company as reported on the NASDAQ stock market the date immediately preceding
the date of grant, and shall vest and become exercisable as follows: (i) options
with respect to 200,000 shares of common stock of the Company shall vest and
become exercisable monthly, on a pro rata basis, where the vesting schedule
shall deem to have commenced on August 16, 2010 and shall continue until August
15, 2011; and (ii) commencing on August 16, 2011, and monthly thereafter until
August 15, 2014, options with respect to 20,833 shares of common stock of the
Company each shall vest (or shall be deemed to have vested) and become
exercisable.  If Employee is still an employee of the Company on the New Plan
Effective Date, the Options shall immediately accelerate, vest and become
exercisable in full (exercisable by Employee at any time within one year of such
hereinafter described event), in the event that (i) the Employee’s employment is
terminated hereunder for any reason other than (1) by the Company for Cause
pursuant to Section 6(b) of this Agreement or (2) by the Employee for any reason
other than for Good Reason (as hereinafter defined) pursuant to Section 6(f) of
this Agreement or (ii) there is a Change in Control. If Employee is no longer an
employee on the New Plan Effective Date but is entitled to Options as provided
above, then except as hereinafter provided, the Options shall be granted to
Employee and shall immediately accelerate and vest and remain exercisable in
full for a period of one year after  the New Plan Effective
Date.  Notwithstanding the prior sentence, in the event Employee is no longer an
employee on the New Plan Effective Date as a result of Employee’s voluntary
termination of employment pursuant to Section 6(g) below, then the vested
Options shall remain exercisable for a period of one year from the New Plan
Effective Date.  The Options shall be in addition to, and not in substitution
for, the stock options granted to the Employee pursuant to the Consulting
Agreement, and, subject to the above provisions of this Section 5(c)(i), shall
be subject to terms and conditions substantially similar to those as set forth
in the Stock Option Plan and the stock option agreement, as amended, between the
Company and the Employee in connection with the stock options granted to
Employee pursuant to the Consulting Agreement.  The Company agrees to use its
best efforts to cause the shareholders of the Company to adopt a new equity
compensation plan to allow for the grant of the Options described above, which
plan shall include provisions to allow for the grant of options to former
employees.

 
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(ii)      Additional Severance Payment.  In the event that the grant of Options
to Employee and the New Plan Effective Date (a) does not occur within one (1)
year after Employee’s termination of employment for any reason other than (i)
termination by the Company for Cause or (ii) voluntary termination by the
Employee for other than Good Reason, or (b) occurs within one (1) year after
Employee’s termination of employment for any reason other than (i) termination
by the Company for Cause or (ii) voluntary termination by the Employee for other
than Good Reason, but the New Plan does not provide for grants of stock options
to former employees, then Employee shall be entitled to an additional severance
payment in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000)
(the “Additional Severance Payment”).  The Additional Severance Payment shall be
paid to Employee (i) if the New Plan Effective Date does not occur within one
(1) year after Employee’s termination of employment as provided in Section
5(c)(ii)(a) above, on the date that is one (1) year after Employee’s termination
of employment, and (ii) if the New Plan Effective Date occurs within one (1)
year after Employee’s termination of employment but the New Plan does not
provide for grants of stock options to former employees as provided in Section
5(c)(ii)(b) above, on the New Plan Effective Date.  In the event that the
Company fails to pay the Additional Severance Payment within five (5) days of
the date when due as provided above, then the unpaid Additional Severance
Payment shall bear interest at the rate of six percent (6%) per annum from the
date of Employee’s termination of employment until paid.
 
(d)          Other Benefits.  During each year of the Term of Employment, the
Employee shall be entitled to twenty five (25) days paid time off as well as
such paid holidays in accordance with the Company’s holiday policies set forth
in the Company’s employee handbook.  Any vacation time not taken by Employee
during any calendar year may not be carried forward into any succeeding calendar
year.  The Employee shall receive such additional benefits, if any, as the Board
of the Company shall from time to time determine.
 
6.           Termination.
 
(a)         General.  The Term of Employment hereunder shall terminate upon the
earliest to occur of (i) the Employee’s death, (ii) a termination by the Company
by reason of the Employee’s Disability, (iii) a termination by the Company with
Cause, (iv) a termination by the Company without Cause, (v) a voluntary
termination by the Employee without Good Reason or (vi) a termination by the
Employee for Good Reason.
 
(b)         Termination By Company for Cause.  The Company shall at all times
have the right, upon written notice to the Employee, to terminate the Term of
Employment, for Cause.  In no event shall a termination of the Employee’s
employment for Cause occur unless the Company gives ten (10) days prior written
notice (the “Company Notice”) to the Employee in accordance with this Agreement
stating with reasonable specificity the events or actions that constitute Cause
and providing the Employee with an opportunity to be heard within thirty (30)
days after the Employee’s receipt of the Company Notice.  Cause shall in no
event be deemed to exist except upon a decision made by the Board, at a meeting,
duly called and noticed, to which the Employee (and the Employee’s counsel)
shall be invited upon proper notice.  In the event that the Term of Employment
is terminated by the Company for Cause, the Employee shall be entitled only to
the Accrued Obligations, payable as and when those amounts would have been
payable had the Term of Employment not ended.

 
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(c)         Disability.  The Company shall have the option, in accordance with
applicable law, to terminate the Term of Employment upon written notice to the
Employee, at any time during which the Employee is suffering from a Disability
(and the relevant time periods described in Section 1(i) hereof have
lapsed).  In the event that the Term of Employment is terminated due to the
Employee’s Disability, the Employee shall be entitled only to (i) the Accrued
Obligations and (ii) a prorated portion of an Annual Bonus (if any) earned by
Employee for such year, payable as and when those amounts would have been
payable had the Term of Employment not ended.  Further, in the event that the
grant of Options and the New Plan Effective Date has not occurred prior to such
termination, the Employee shall be entitled to any and all applicable rights
under Section 5(c).
 
(d)         Death.  In the event that the Term of Employment is terminated due
to the Employee’s death, the Employee shall be entitled only to (i) the Accrued
Obligations and (ii) a prorated portion of an Annual Bonus (if any) earned by
Employee for such year, payable as and when those amounts would have been
payable had the Term of Employment not ended.  Further, in the event that the
grant of Options and the New Plan Effective Date has not occurred prior to such
termination, the Employee shall be entitled to any and all applicable rights
under Section 5(c).
 
(e)         Termination Without Cause.  The Company may terminate the Term of
Employment at any time without Cause, by written notice to the Employee not less
than thirty (30) days prior to the effective date of such termination.  In the
event that the Term of Employment is terminated by the Company without Cause,
then the Employee shall be entitled to:
 
(i)        The Accrued Obligations, payable as and when those amounts would have
been payable had the Term of Employment not ended;
 
(ii)       A prorated portion of an Annual Bonus (if any) earned by Employee for
such year, payable as and when those amounts would have been payable had the
Term of Employment not ended;
 
(iii)      During the Severance Period, an amount equal to Employee’s Base
Salary at the rate in effect on the Termination Date, payable as and when such
Base Salary would have been payable had the Term of Employment not ended; and
 
(iv)      Vesting, immediately prior to such termination, in any Options that
have not previously vested, and any and all applicable rights under Section 5(c)
in the event that the grant of Options and the New Plan Effective Date has not
occurred prior to such termination.
 
(f)          Termination By Employee for Good Reason.  The Employee shall at all
times have the right, upon written notice to the Company, to terminate the Term
of Employment for Good Reason.  In no event shall a termination of the
Employee’s employment for Good Reason occur unless the Employee gives ten (10)
days prior written notice (the “Employee Notice”) to the Company in accordance
with this Agreement stating with reasonable specificity the events or actions
that constitute Good Reason.  In the event that the Term of Employment is
terminated by the Employee for Good Reason, then the Employee shall be entitled
to:

 
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(i)        The Accrued Obligations, payable as and when those amount would have
been payable had the Term of Employment not ended;
 
(ii)       A prorated portion of an Annual Bonus (if any) earned by Employee for
such year, payable as and when those amounts would have been payable had the
Term of Employment not ended;
 
(iii)      During the Severance Period, an amount equal to Employee’s Base
Salary at the rate in effect on the Termination Date, payable as and when such
Base Salary would have been payable had the Term of Employment not ended; and
 
(iv)      Vesting, immediately prior to such termination in any Options that
have not previously vested, and any and all applicable rights under Section 5(c)
in the event that the grant of Options and the New Plan Effective Date has not
occurred prior to such termination.
 
(g)         Voluntary Termination by Employee Without Good Reason.  The Employee
may terminate his employment for any reason other than Good Reason by providing
the Company thirty (30) days’ written notice of such termination.  In the event
of a termination of employment by the Executive under this Section 6(g), the
Employee shall be entitled only to the Accrued Obligations, payable as and when
those amounts would have been payable had the Term of Employment not
ended.  Further, in the event that the grant of Options and the New Plan
Effective Date has not occurred prior to such termination, the Employee shall be
entitled to any and all applicable rights under Section 5(c).
 
(h)         Termination Upon Expiration Date.  In the event that Employee’s
employment with the Company terminates upon the expiration of the Term of
Employment (ie the fourth (4th) anniversary of the Commencement Date, or such
later date as the parties shall mutually agree), the Employee shall be entitled
to only the Accrued Obligations, payable as and when those amounts would have
been payable had the Term of Employment not ended.  Further, in the event that
the grant of Options and the New Plan Effective Date has not occurred prior to
such termination, the Employee shall be entitled to any and all applicable
rights under Section 5(c).
 
(i)           Release.  Any payments due to Employee under Section 5(c)(ii) or
this Article 6 (other than the Accrued Obligations or any payments due on
account of the Employee’s death) shall be conditioned upon Employee’s execution
of a general release of claims in the form attached hereto as Exhibit A (subject
to such modifications as the Company or Employee may reasonably request) that
becomes irrevocable within thirty (30) days of the Termination Date.  No
payments will be made prior to the date that is thirty (30) days after the
Termination Date.

 
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(j)           Cooperation.  Following the Term of Employment, the Employee shall
give his assistance and cooperation willingly, upon reasonable advance notice
with due consideration for his other business or personal commitments, in any
matter relating to his position with the Company, or his expertise or experience
as the Company may reasonably request, including his attendance and truthful
testimony where deemed appropriate by the Company, with respect to any
investigation or the Company’s defense or prosecution of any existing or future
claims or litigations or other proceedings relating to matters in which he was
involved or potentially had knowledge by virtue of his employment with the
Company.  In no event shall his cooperation materially interfere with his
services for a subsequent employer or other similar service recipient.  To the
extent permitted by law, the Company agrees that (i) it shall promptly reimburse
the Employee for his reasonable and documented expenses in connection with his
rendering assistance and/or cooperation under this Section 6(j) upon his
presentation of documentation for such expenses and (ii) the Employee shall be
reasonably compensated for any continued material services as required under
this Section 6(j).
 
(k)          Return of Company Property.  Following the Termination Date, the
Employee or his personal representative shall return all Company property in his
possession, including but not limited to all computer equipment (hardware and
software), telephones, facsimile machines, palm pilots and other communication
devices, credit cards, office keys, security access cards, badges,
identification cards and all copies (including drafts) of any documentation or
information (however stored) relating to the business of the Company, its
customers and clients or its prospective customers and clients (provided that
the Employee may retain a copy the addresses contained in his rolodex, palm
pilot, PDA or similar device) including, without limitation, non-public Company
financial statements, promotional and advertising materials, minute books,
stockholder lists, litigation files, memoranda and other documents, and all
correspondences with Nasdaq, the Securities and Exchange Commission, outside
auditors and counsel, and with all public and governmental authorities, as well
as copies of the same and all documents and materials within Employee’s
possession or control that are extrapolations or based on any such documents and
materials.
 
(l)           Compliance with Section 409A
 
(i)          General. It is the intention of both the Company and the Employee
that the benefits and rights to which the Employee could be entitled pursuant to
this Agreement comply with Section 409A of the Code and the Treasury Regulations
and other guidance promulgated or issued thereunder (“Section 409A”), to the
extent that the requirements of Section 409A are applicable thereto, and the
provisions of this Agreement shall be construed in a manner consistent with that
intention.  If the Employee or the Company believes, at any time, that any such
benefit or right that is subject to Section 409A does not so comply, it shall
promptly advise the other and shall negotiate reasonably and in good faith to
amend the terms of such benefits and rights such that they comply with Section
409A (with the most limited possible economic effect on the Employee and on the
Company).
 
(ii)         Distributions on Account of Separation from Service.  If and to the
extent required to comply with Section 409A, no payment or benefit required to
be paid under this Agreement on account of termination of the Employee’s
employment shall be made unless and until the Employee incurs a “separation from
service” within the meaning of Section 409A.

 
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(iii)        6 Month Delay for Specified Employees.
 
(A)       If the Employee is a “specified employee”, then no payment or benefit
that is payable on account of the Employee’s “separation from service”, as that
term is defined for purposes of Section 409A, shall be made before the date that
is six months after the Employee’s “separation from service” (or, if earlier,
the date of the Employee’s death) if and to the extent that such payment or
benefit constitutes deferred compensation (or may be nonqualified deferred
compensation) under Section 409A and such deferral is required to comply with
the requirements of Section 409A.  Any payment or benefit delayed by reason of
the prior sentence shall be paid out or provided in a single lump sum at the end
of such required delay period in order to catch up to the original payment
schedule.
 
(B)        For purposes of this provision, the Employee shall be considered to
be a “specified employee” if, at the time of his separation from service, the
Employee is a “key employee”, within the meaning of Section 416(i) of the Code,
of the Company (or any person or entity with whom the Company would be
considered a single employer under Section 414(b) or Section 414(c) of the Code)
any stock of which is publicly traded on an established securities market or
otherwise.
 
(iv)        No Acceleration of Payments.  Neither the Company nor the Employee,
individually or in combination, may accelerate any payment or benefit that is
subject to Section 409A, except in compliance with Section 409A and the
provisions of this Agreement, and no amount that is subject to Section 409A
shall be paid prior to the earliest date on which it may be paid without
violating Section 409A.
 
(v)         Treatment of Each Installment as a Separate Payment. For purposes of
applying the provisions of Section 409A to this Agreement, each separately
identified amount to which the Employee is entitled under this Agreement shall
be treated as a separate payment.  In addition, to the extent permissible under
Section 409A, any series of installment payments under this Agreement shall be
treated as a right to a series of separate payments.
 
7.           Restrictive Covenants.
 
(a)         Non-competition.  At all times during the Restricted Period, the
Employee shall not, directly or indirectly (whether as a principal, agent,
partner, employee, officer, investor, owner, consultant, board member, security
holder, creditor or otherwise), engage in any Competitive Activity, or have any
direct or indirect interest in any sole proprietorship, corporation, company,
partnership, association, venture or business or any other person or entity that
directly or indirectly (whether as a principal, agent, partner, employee,
officer, investor, owner, consultant, board member, security holder, creditor,
or otherwise) engages in a Competitive Activity; provided that the foregoing
shall not apply to the Employee’s ownership of not more than five percent (5%)
of the outstanding Common Stock or other voting securities of the Company or the
acquisition by the Employee, solely as an investment, of not more than five
percent (5%) of the outstanding securities of any issuer that is registered
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended,
and that are listed or admitted for trading on any United States national
securities exchange or included for quotation on any United States inter-dealer
quotation system of a registered national securities association including,
without limitation, the shares of stock of Vitamin Shoppe owned by the Employee
as of the Effective Date of this Agreement, so long as the Employee does not
control, acquire a controlling interest in or become a member of a group which
exercises direct or indirect control of, more than five percent (5%) of any
class of capital stock of such corporation.

 
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(b)         Nonsolicitation of Employees and Certain Other Third Parties.  At
all times during the Restricted Period, the Employee shall not, directly or
indirectly, for himself or for any other person, firm, corporation, partnership,
association or other entity (i) employ or attempt to employ or enter into any
contractual arrangement with any employee, consultant or independent contractor
performing services for the Company, or any Related Entity, unless such
employee, consultant or independent contractor, has not been employed or engaged
by the Company for a period in excess of six (6) months, and/or (ii) call on,
solicit, or engage in business with, any of the actual or targeted prospective
customers or clients of the Company or any Related Entity on behalf of any
person or entity in connection with any Competitive Activity, nor shall the
Employee make known the names and addresses of such actual or targeted
prospective customers or clients, or any information relating in any manner to
the trade or business relationships of the Company or any Related Entities with
such customers or clients, other than in connection with the performance of the
Employee’s duties under this Agreement, and/or (iii) persuade or encourage or
attempt to persuade or encourage any persons or entities with whom the Company
or any Related Entity does business or has some business relationship to cease
doing business or to terminate its business relationship with the Company or any
Related Entity or to engage in any business competitive with the Company or any
Related Entity on its own or with any competitor of the Company or any Related
Entity.
 
(c)         Confidential Information.  The Employee shall not at any time
divulge, communicate, use to the detriment of the Company or any Related
Entity or for the benefit of any other person or persons, or misuse in any way,
any Confidential Information.  Any Confidential Information now or hereafter
acquired by the Employee shall be deemed a valuable, special and unique asset of
the Company and its Related Entities that is received by the Employee in
confidence and as a fiduciary, and the Employee shall remain a fiduciary to the
Company and its Related Entities with respect to all such Confidential
Information. Notwithstanding the foregoing, nothing herein shall be deemed to
restrict the Employee from disclosing Confidential Information to the extent
Employee’s counsel reasonably determines that such disclosure is required by
law; provided that if any person or authority makes a demand on the Employee
purporting to legally compel him to divulge any Confidential Information, the
Employee immediately shall give notice of the demand to the Company so that the
Company may first assess whether to challenge the demand prior to the Employee’s
divulging of such Confidential Information and to enable the Company a
reasonable opportunity to obtain a protective order against disclosure or all or
a portion of the Confidential Information.  Subject to the immediately preceding
sentence, the Employee shall not divulge such Confidential Information until the
Company, in a timely manner, either has concluded not to challenge the demand,
or has exhausted its challenge, including appeals, if any.  Upon request by the
Company, the Employee shall deliver promptly to the Company upon termination of
his services for the Company, or at any time thereafter as the Company may
request, all originals and copies of memoranda, notes, records, reports,
manuals, drawings, designs, computer files in any media and other documents (and
all copies thereof) containing or based upon such Confidential Information.

 
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(d)         Ownership of Developments.  All processes, concepts, techniques,
inventions and works of authorship, including new contributions, improvements,
formats, packages, programs, systems, machines, compositions of matter
manufactured, developments, applications and discoveries, and all copyrights,
patents, trade secrets, or other intellectual property rights associated
therewith conceived, invented, made, developed or created by the Employee during
the Term of Employment either during the course of performing work for the
Company or its Related Entities, or their clients, or which are related in any
manner to the business (commercial or experimental) of the Company or its
Related Entities or their clients (collectively, the “Work Product”) shall
belong exclusively to the Company and its Related Entities and shall, to the
extent possible, be considered a work made by the Employee for hire for the
Company and its Related Entities within the meaning of Title 17 of the United
States Code.  To the extent the Work Product may not be considered work made by
the Employee for hire for the Company and its Related Entities, the Employee
agrees to assign, and automatically assign at the time of creation of the Work
Product, without any requirement of further consideration, any right, title, or
interest the Employee may have in such Work Product.  Upon the request of the
Company, the Employee shall take such further actions, including execution and
delivery of instruments of conveyance, as may be appropriate to give full and
proper effect to such assignment. The Employee shall further: (i) promptly
disclose the Work Product to the Company; (ii) assign to the Company or its
assignee, without additional compensation, all patent or other rights to such
Work Product for the United States and foreign countries; (iii) sign all papers
necessary to carry out the foregoing; and (iv) give testimony in support of his
inventions, all at the sole cost and expense of the Company.
 
(e)          Books and Records.  All books, records, and accounts relating in
any manner to the customers or clients of the Company or its Related Entities,
whether prepared by the Employee or otherwise coming into the Employee's
possession, shall be the exclusive property of the Company and its Related
Entities and shall be returned immediately to the Company on termination of the
Employee's employment hereunder or on the Company's request at any time.
 
(f)           Securities Trading. The Employee hereby acknowledges that he will
have access to and, from time to time, be in possession of proprietary,
confidential and material, non-public information relating to the Company. The
Employee acknowledges that he has been made aware of and understands that he is
prohibited from trading in any Company securities while in possession of
material, non-public information and that the restriction contained herein shall
survive the termination of this Agreement without limitation. Without limiting
the generality of the foregoing, the Employee agrees that he shall not buy, sell
or otherwise effect transactions in any stock or other securities of the Company
or derivative securities thereof during any “Blackout Period” as described in
the Company's Insider Trading Policy and, in all cases, shall refrain from
engaging in any transaction involving the Company's securities without first
obtaining pre-clearance of the transaction from the Company Compliance Officer,
or an opinion from the Employee’s counsel that such transaction is in accordance
with all applicable laws and regulations.  The Employee represents and warrants
that he has read and fully understands the contents of the Company’s Insider
Trading Policy (effective as of September 1, 2010), a true and complete copy of
which heretofore was furnished to the Employee.  The Company agrees that its
Compliance Officer shall promptly respond to any request for pre-clearance in
accordance with the Company’s Insider Trading Policy (effective as of September
1, 2010).   In respect of the Options to be granted to the Employee hereunder,
the Company will take such action as may be necessary to promptly include the
shares of common stock of the Company subject to the Options in the Company’s
existing Registration Statement on Form S-8 filed with the Securities and
Exchange Act on January 13, 2010 (Registration No. 333-164319) (or any successor
or comparable registration form thereto) or to file a new Registration
Statement, including but not limited to on Form S-8 (or any successor or
comparable registration form) which includes such shares so they are registered
for resale under the Securities Act of 1933, as amended.   In addition, in the
event that the Company proposes to file a registration statement with the
Securities and Exchange Commission for the resale of any securities by a
shareholder of the Company, the Company shall (1) provide the Employee with
prompt notice thereof (and in any event no less than fifteen (15) days prior to
the filing of such registration statement) (the "Company Notice"), (2) subject
to customary cutbacks in the sole discretion of the managing underwriter with
respect to such resale, shall include in such registration statement such number
of shares of common stock of the Company held by the Employee as is requested by
the Employee by written notice delivered to the Company no later than ten (10)
days after the Employee received the Company Notice; provided, that the
percentage of the shares of common stock held by the Employee that the Employee
shall be entitled to include in such registration statement shall not exceed the
highest percentage of the shares held by any other selling shareholder that are
being included in such registration statement, (3) cause the Employee and such
shares of common stock of the Employee as provided in (2) above to be registered
to be included and entitled to the benefits of any underwriting agreement,
placement agent agreement, or similar agreement used in connection with any
offering being conducted in connection with such registration statement, and (4)
perform such other obligations for the benefit of the Employee with respect to
the shares of common stock to be registered as the Company has agreed to perform
for the benefit of any other selling shareholder included in such registration
statement.

 
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(g)          Acknowledgment by Employee.  The Employee acknowledges and confirms
that the restrictive covenants contained in this Section 7 (including without
limitation the length of the term of the provisions of this Section 7) are
reasonably necessary to protect the legitimate business interests of the Company
and its Related Entities, and are not overbroad, overlong, or unfair and are not
the result of overreaching, duress or coercion of any kind. The Employee further
acknowledges and confirms that the compensation payable to the Employee under
this Agreement is in consideration for the duties and obligations of the
Employee hereunder, including the restrictive covenants contained in this
Section 7, and that such compensation is sufficient, fair and reasonable.  The
Employee further acknowledges and confirms that his full, uninhibited and
faithful observance of each of the covenants contained in this Section 7 will
not cause him any undue hardship, financial or otherwise, and that enforcement
of each of the covenants contained herein will not impair his ability to obtain
employment commensurate with his abilities and on terms fully acceptable to him
or otherwise to obtain income required for the comfortable support of him and
his family and the satisfaction of the needs of his creditors.  The Employee
acknowledges and confirms that his special knowledge of the business of the
Company and its Related Entities is such as would cause the Company and its
Related Entities serious injury or loss if he were to use such ability and
knowledge to the benefit of a competitor or were to compete with the Company or
its Related Entities in violation of the terms of this Section 7. The Employee
further acknowledges that the restrictions contained in this Section 7 are
intended to be, and shall be, for the benefit of and shall be enforceable by,
the Company’s successors and assigns.  The Employee expressly agrees that upon
any breach or violation of the provisions of this Section 7, the Company shall
be entitled, as a matter of right, in addition to any other rights or remedies
it may have, to (i) temporary and/or permanent injunctive relief in any court of
competent jurisdiction as described in Section 12 hereof, and (ii) such damages
as are provided at law or in equity. The existence of any claim or cause of
action against the Company or its Related Entities, whether predicated upon this
Agreement or otherwise, shall not constitute a defense to the enforcement of the
restrictions contained in this Section 7.

 
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(h)         Reformation by Court.  In the event that a court of competent
jurisdiction shall determine that any provision of this Section 7 is invalid or
more restrictive than permitted under the governing law of such jurisdiction,
then only as to enforcement of this Section 7 within the jurisdiction of such
court, such provision shall be interpreted or reformed and enforced as if it
provided for the maximum restriction permitted under such governing law.
 
(i)           Extension of Time.  If the Employee shall be in violation of any
provision of this Section 7, then each time limitation set forth in this Section
7 shall be extended for a period of time equal to the period of time during
which such violation or violations occur.  If the Company or any its Related
Entity seeks injunctive relief from such violation in any court, then the
covenants set forth in this Section 7 shall be extended for a period of time
equal to the pendency of such proceeding including all appeals by the Employee.
 
(j)           Injunction.  It is recognized and hereby acknowledged by the
parties hereto that a breach by the Employee of any of the covenants contained
in Section 7 of this Agreement will cause irreparable harm and damage to the
Company, and its Related Entities, the monetary amount of which may be virtually
impossible to ascertain.  As a result, the Employee recognizes and hereby
acknowledges that the Company and its Related Entities shall be entitled to an
injunction from any court of competent jurisdiction enjoining and restraining
any violation of any or all of the covenants contained in Section 7 of this
Agreement by the Employee or any of his affiliates, associates, partners or
agents, either directly or indirectly, and that such right to injunction shall
be cumulative and in addition to whatever other remedies the Company may
possess.
 
8.           Representations and Warranties of Employee.  The Employee
represents and warrants to the Company that:
 
(a)          The Employee’s employment will not conflict with or result in his
breach of any agreement to which he is a party or otherwise may be bound;
 
(b)          The Employee has not violated, and in connection with his
employment with the Company will not violate, any non-solicitation,
non-competition or other similar covenant or agreement of a prior employer by
which he is or may be bound; and
 
(c)          In connection with Employee’s employment with the Company, he will
not use any confidential or proprietary information that he may have obtained in
connection with employment with any prior employer.
 
9.           Taxes.  Anything in this Agreement to the contrary notwithstanding,
all payments required to be made by the Company hereunder to the Employee or his
estate or beneficiaries shall be subject to the withholding of such amounts
relating to taxes as the Company may reasonably determine it should withhold
pursuant to any applicable law or regulation.  In lieu of withholding such
amounts, in whole or in part, the Company may, in its sole discretion, accept
other provisions for payment of taxes and withholding as required by law,
provided it is satisfied that all requirements of law affecting its
responsibilities to withhold have been satisfied.

 
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10.         Assignment.  The Company shall have the right to assign this
Agreement and its rights and obligations hereunder in whole, but not in part, to
any corporation or other entity with or into which the Company may hereafter
merge or consolidate or to which the Company may transfer all or substantially
all of its assets, if in any such case said corporation or other entity shall by
operation of law or expressly in writing assume all obligations of the Company
hereunder as fully as if it had been originally made a party hereto, but may not
otherwise assign this Agreement or its rights and obligations hereunder.  The
Employee may not assign or transfer this Agreement or any rights or obligations
hereunder.
 
11.         Governing Law.  This Agreement shall be governed by and construed
and enforced in accordance with the internal procedural and substantive laws of
the State of Delaware, without regard to principles of conflict of laws of such
state.
 
12.         Jurisdiction and Venue.  Except as otherwise expressly provided in
Section 26 below, each of the parties irrevocably and unconditionally (i) agrees
that any suit, action or legal proceeding arising out of or relating to this
Agreement which is expressly permitted by the terms of this Agreement to be
brought in a court of law, shall be brought in the courts of record of the State
of Florida in Palm Beach County or the court of the United States, Southern
District of Florida; (ii) consents to the jurisdiction of each such court in any
such suit, action or proceeding; (iii) waives any objection which it or he may
have to the laying of venue of any such suit, action or proceeding in any of
such courts; and (iv) agrees that service of any court papers may be effected on
such party by mail, as provided in this Agreement, or in such other manner as
may be provided under applicable laws or court rules in such courts.
 
13.         Entire Agreement.  Except with respect to (a) the stock option
agreements entered into by and between the Company and the Employee governing
Options (including the stock options granted pursuant to the Consulting
Agreement), (b) expenses eligible for reimbursements under Section 2.2 of the
Consulting Agreement for the period between the effective date of the Consulting
Agreement and the Commencement Date hereof, (c) Article V of the Consulting
Agreement to the extent applicable to the Employee’s services as a Consultant
and (d), the Indemnification Agreement attached hereto as Exhibit B , this
Agreement (and its exhibits) constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and, upon its effectiveness,
shall supersede all prior agreements, understandings and arrangements, both oral
and written, between the Employee and the Company (or any of its affiliates)
with respect to such subject matter, including, without limitation, the
Consulting Agreement.  This Agreement may not be modified in any way unless by a
written instrument signed by both the Company and the Employee.
 
14.         Survival.  The respective rights and obligations of the parties
hereunder shall survive any termination of the Employee’s employment hereunder,
including without limitation, the Company’s obligations under Sections 5(c), 6
and 25 and the Employee’s obligations under Section 7 and 25, and the expiration
of the Term of Employment, to the extent necessary to the intended preservation
of such rights and obligations.

 
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15.         Notices.  All notices under this Agreement shall be in writing and
shall be given by personal delivery, or by registered or certified United States
mail, postage prepaid, return receipt requested, to the address set forth below:

 
If to the Employee:
Jeffrey Horowitz

7273 Fisher Island Drive
Fisher Island, FL 33109

 
If to the Company:
Vitacost.com, Inc.

5400 Broken Sound Blvd
Suite 500
Boca Raton, FL 33487
Attn: Chairman of the Board of Directors

or to such other person or persons or to such other address or addresses as the
Employee and the Company or their respective successors or assigns may hereafter
furnish to the other by notice similarly given.  Notices, if personally
delivered, shall be deemed to have been received on the date of delivery, and if
given by registered or certified mail, shall be deemed to have been received on
the fifth business day after mailing.

16.         Benefits; Binding Effect.  This Agreement shall be for the benefit
of and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where permitted and
applicable, assigns, including, without limitation, any successor to the
Company, whether by merger, consolidation, sale of stock, sale of assets or
otherwise.
 
17.         Right to Consult with Counsel; No Drafting Party.  The Employee
acknowledges having read and considered all of the provisions of this Agreement
carefully, and having had the opportunity to consult with counsel of his own
choosing, and, given this, the Employee agrees that the obligations created
hereby are not unreasonable.  The Employee acknowledges that he has had an
opportunity to negotiate any and all of these provisions and no rule of
construction shall be used that would interpret any provision in favor of or
against a party on the basis of who drafted the Agreement. The Company further
agrees to pay the Employee’s reasonable counsel fees in connection with the
drafting and negotiation of the Consulting Agreement and this Agreement, which
fees shall not exceed an aggregate of $37,500.
 
18.         Severability.  The invalidity of any one or more of the words,
phrases, sentences, clauses, provisions, sections or articles contained in this
Agreement shall not affect the enforceability of the remaining portions of this
Agreement or any part thereof, all of which are inserted conditionally on their
being valid in law, and, in the event that any one or more of the words,
phrases, sentences, clauses, provisions, sections or articles contained in this
Agreement shall be declared invalid, this Agreement shall be construed as if
such invalid word or words, phrase or phrases, sentence or sentences, clause or
clauses, provisions or provisions, section or sections or article or articles
had not been inserted.  If such invalidity is caused by length of time or size
of area, or both, the otherwise invalid provision will be considered to be
reduced to a period or area which would cure such invalidity.

 
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19.         Waivers.  The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate nor be construed as
a waiver of any subsequent breach or violation.
 
20.         Damages; Attorneys Fees.  Nothing contained herein shall be
construed to prevent the Company or the Employee from seeking and recovering
from the other damages sustained by either or both of them as a result of its or
his breach of any term or provision of this Agreement. In the event that either
party hereto seeks to collect any damages resulting from, or the injunction of
any action constituting, a breach of any of the terms or provisions of this
Agreement, then the party found to be at fault shall pay all reasonable costs
and attorneys' fees of the other.
 
21.         Waiver of Jury Trial.  The Employee hereby knowingly, voluntarily
and intentionally waives any right that the Employee may have to a trial by jury
in respect of any litigation based hereon, or arising out of, under or in
connection with this Agreement and any agreement, document or instrument
contemplated to be executed in connection herewith, or any course of conduct,
course of dealing statements (whether verbal or written) or actions of any party
hereto.
 
22.         Section Headings.  The article, section and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
 
23.         No Third Party Beneficiary.  Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
other than the Company, the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any
rights or remedies under or by reason of this Agreement.
 
24.         Counterparts.  This Agreement may be executed in multiple
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same instrument.  Any signature page delivered by facsimile or PDF signature
shall be binding to the same extent as an original signature page with regard to
any agreement subject to the terms hereof or any amendment thereto.  Any party
who delivers such a signature page agrees to later deliver an original
counterpart to any party who requests it.
 
25.         Indemnification.  The Company shall indemnify and hold the Employee
harmless to the fullest extent permitted by law (including, without limitation,
to the maximum extent permitted by Section 174 of the Delaware General
Corporation Law), and as provided in the Company’s Certificate of Incorporation
and By-Laws currently in effect. In furtherance thereof, the parties acknowledge
and agree that the Indemnification Agreement dated December 3, 2010, effective
as of August 3, 2010, by and between the Company and the Employee attached
hereto as Exhibit B, shall continue in full force and effect.

 
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26.         Arbitration.  Notwithstanding the provisions of Section 12 above, if
Employee and Company are unable to resolve any dispute arising under Section
5(c)(ii) hereof (including the failure of the Company to pay Employee any
Additional Severance Payment) within ten (10) business days after delivery by
one party to the other of written notice any such dispute, then the dispute
shall be settled by binding arbitration in Palm Beach County, Florida in
accordance with the Commercial Arbitration Rules then in effect of the American
Arbitration Association.  Arbitration will be conducted by three (3)
arbitrators: one (1) selected by the Company, one (1) selected by Employee and
the third selected by the first two arbitrators.  The parties agree to use all
reasonable efforts to cause the arbitration hearing to be conducted within sixty
(60) calendar days after the appointment of the last of the three arbitrators
and to use all reasonable efforts to cause the arbitrators’ decision to be
furnished within ninety five (95) calendar days after the appointment of the
last of the three arbitrators.  The parties further agree that any discovery
shall be completed at least twenty (20) business days prior to the date of the
arbitration hearing. The final decision of the arbitrators shall be furnished to
the Company and Employee in writing and shall constitute a conclusive
determination of the issue in question, binding upon the Company and Employee,
and shall not be contested by either of them.  Any award of the arbitrators
shall be non-appealable and may be entered into as a judgment in any court of
competent jurisdiction.  The non-prevailing party in any arbitration shall pay
the reasonable expenses (including attorneys’ fees) of the prevailing party, and
the fees and expenses associated with the arbitration (including the
arbitrators’ fees and expenses).
 
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
 

 
COMPANY:
     
VITACOST.COM, INC., a Delaware corporation
     
By:  /s/ Mary L. Marbach
 
Name:  Mary L. Marbach
 
Title: General Counsel and Corporate Secretary
     
Date: February 17, 2011
     
EMPLOYEE:
     
/s/  Jeffrey Horowitz
 
JEFFREY HOROWITZ
     
Date:  February 17, 2011

 
 
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EXHIBIT A
FORM OF RELEASE

GENERAL RELEASE OF CLAIMS

 
1.           _______________ (“Employee”), for himself and his family, heirs,
executors, administrators, legal representatives and their respective successors
and assigns, in exchange for the consideration received pursuant to Sections
_____ (in the case of Disability), Sections _____ or ______ (other than the
Accrued Obligations) of the Employment Agreement to which this release is
attached as Exhibit A (the “Employment Agreement”), does hereby release and
forever discharge _____________________ (the “Company”), its subsidiaries,
affiliated companies, successors and assigns, and its current or former
directors, officers, employees, shareholders or agents in such capacities
(collectively with the Company, the “Released Parties”) from any and all
actions, causes of action, suits, controversies, claims and demands whatsoever,
for or by reason of any matter, cause or thing whatsoever, whether known or
unknown including, but not limited to, all claims under any applicable laws
arising under or in connection with Employee’s employment or termination
thereof, whether for tort, breach of express or implied employment contract,
wrongful discharge, intentional infliction of emotional distress, or defamation
or injuries incurred on the job or incurred as a result of loss of
employment.  Employee acknowledges that the Company encouraged him to consult
with an attorney of his choosing, and through this General Release of Claims
encourages him to consult with his attorney with respect to possible claims
under the Age Discrimination in Employment Act (“ADEA”) and that he understands
that the ADEA is a Federal statute that, among other things, prohibits
discrimination on the basis of age in employment and employee benefits and
benefit plans.  Without limiting the generality of the release provided above,
Employee expressly waives any and all claims under ADEA that he may have as of
the date hereof.  Employee further understands that by signing this General
Release of Claims he is in fact waiving, releasing and forever giving up any
claim under the ADEA as well as all other laws within the scope of this
paragraph 1 that may have existed on or prior to the date
hereof.  Notwithstanding anything in this paragraph 1 to the contrary, this
General Release of Claims shall not apply to (i) any rights to receive any
payments or benefits pursuant to Section [   ] of the Employment Agreement, (ii)
any rights or claims that may arise as a result of events occurring after the
date this General Release of Claims is executed, (iii) any indemnification
rights Employee may have as a former officer or director of the Company or its
subsidiaries or affiliated companies, (iv) any claims for benefits under any
directors’ and officers’ liability policy maintained by the Company or its
subsidiaries or affiliated companies in accordance with the terms of such
policy, and (v) any rights as a holder of equity securities or Options of the
Company.
 
2.           Employee represents that he has not filed against the Released
Parties any complaints, charges, or lawsuits arising out of his employment, or
any other matter arising on or prior to the date of this General Release of
Claims, and covenants and agrees that he will never individually or with any
person file, or commence the filing of, any charges, lawsuits, complaints or
proceedings with any governmental agency, or against the Released Parties with
respect to any of the matters released by Employee pursuant to paragraph 1
hereof (a “Proceeding”); provided, however, Employee shall not have relinquished
his right to commence a Proceeding to challenge whether Employee knowingly and
voluntarily waived his rights under ADEA.

 
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3.           Employee hereby acknowledges that the Company has informed him that
he has up to twenty-one (21) days to sign this General Release of Claims and he
may knowingly and voluntarily waive that twenty-one (21) day period by signing
this General Release of Claims earlier.  Employee also understands that he shall
have seven (7) days following the date on which he signs this General Release of
Claims within which to revoke it by providing a written notice of his revocation
to the Company.
 
4.           Employee acknowledges that this General Release of Claims will be
governed by and construed and enforced in accordance with the internal laws of
the State of Delaware applicable to contracts made and to be performed entirely
within such State.
 
5.           Employee acknowledges that he has read this General Release of
Claims, that he has been advised that he should consult with an attorney before
he executes this general release of claims, and that he understands all of its
terms and executes it voluntarily and with full knowledge of its significance
and the consequences thereof.
 
6.           This General Release of Claims shall take effect on the eighth day
following Employee’s execution of this General Release of Claims unless
Employee’s written revocation is delivered to the Company within seven (7) days
after such execution.

         
_______________, 20__

 
 
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EXHIBIT B
 
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into this 3rd
day of December, 2010, effective as of August 3, 2010 by and among Vitacost.com,
Inc., a Delaware corporation (the “Company”) and Jeffrey Horowitz, a director
and officer of the Company (the “Indemnitee”).
 
RECITALS
 
WHEREAS, while the Company and Indemnitee are parties to a Consulting Agreement
effective as of August 3, 2010 which, among other things, provides that the
Company shall indemnify Indemnitee to the fullest extent permitted by applicable
law, the interpretation of statutes, regulations, Certification of Incorporation
and Bylaws regarding indemnification of directors and officers may be too
uncertain to provide directors and officers with adequate notice of the legal,
financial and other risks to which they may be exposed by virtue of their
service as such; and
 
WHEREAS, damages sought against directors and officers in shareholder or similar
litigation may be substantial, and the costs of defending such actions, and of
judgments in favor of plaintiffs or of settlement therewith, may be prohibitive
for individual directors and officers, without regard to the merits of a
particular action and without regard to the culpability of, or the receipt of
improper personal benefit by, any named director or officer; and
 
WHEREAS, the long period of time which may elapse before final disposition of
such litigation may impose undue hardship and burden on a director or officer or
his estate in maintaining a proper and adequate defense of himself or his estate
against claims for damages; and
 
WHEREAS, the Company is organized under the Delaware General Corporation Law
(the “DGCL”), and the DGCL empowers corporations to indemnify and advance
expenses to a person serving as a director or officer of the corporation and
further provides that the indemnification and advancement of expenses set forth
in the DGCL are not exclusive of any other rights to which a director may be
entitled under a corporation’s charter, bylaws, a resolution of stockholders or
directors, an agreement or otherwise; and
 
WHEREAS, the Company desires to retain the services of highly qualified
individuals, such as Indemnitee, to serve as directors of the Company; and
 
WHEREAS, the Board of Directors of the Company (the “Board”) has concluded that
it is reasonable and prudent for the Company to enter into an agreement to
indemnify in a reasonable and adequate manner the Indemnitee and to assume for
itself maximum liability for expenses and damages in connection with claims
lodged against Indemnitee for his decisions and actions as a director and/or
officer of the Company.
 
NOW, THEREFORE, in consideration of the foregoing, and of other good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
each of the parties hereto, the parties agree as follows:

 
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ARTICLE I.
 
DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set
forth below:
 
“Board” shall mean the Board of Directors of the Company.
 
“Change in Control” shall mean, and shall be deemed to have occurred if on or
after the date of this Agreement, (i) any “person” or “group” (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) (such person or entity as is agreed to by a majority of the Pre-Change
in Control Directors) becomes the “beneficial owner” (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing more than twenty-five percent (25%) of the voting power represented
by the Company’s then outstanding Voting Securities, (ii) any “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becomes the “beneficial owner”, directly or
indirectly, of securities of the Company entitling such beneficial owner to
elect a majority of the Company’s Board of Directors, (iii) at any time during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors, and any new director whose election to
the Board of Directors or whose nomination for election was approved by
two-thirds (2/3) of the directors who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the Board of
Directors, or (iv) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution or the stockholders of the Company approve a sale of
all or substantially all of the Company’s assets.
 
 “Corporate Status” shall mean the status of a person who is or was a director
or officer or Founder of the Company, or a member of any committee of the Board,
and the status of a person who, while a director or officer of the Company, is
or was serving at the request of the Company as a director, officer, partner,
trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust, other incorporated or unincorporated entity
or enterprise or employee benefit plan.
 
“Disinterested Director” shall mean a director of the Company who neither is nor
was a party to the Proceeding in respect of which indemnification is being
sought by the Indemnitee.
 
“Expenses” shall mean, without limitation, all reasonable expenses incurred in
connection with any Proceedings, including all attorneys’ fees, retainers, court
costs, transcript costs, fees of experts, investigation fees and expenses,
accounting and witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and all other
disbursements or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating or being
or preparing to be a witness in a Proceeding.
 
“Good Faith Act or Omission” shall mean an act or omission of the Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and other than (i) one that was material to the loss or liability and that was
committed in bad faith or that was the result of active or deliberate
dishonesty; (ii) one from which the Indemnitee actually received an improper
personal benefit in money, property or services; or (iii) in the case of a
criminal Proceeding, one as to which the Indemnitee had cause to believe his
conduct was unlawful.

 
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“Liabilities” shall mean all liabilities or obligations of any type whatsoever,
including, without limitation, any claims, damages, judgments, fines, excise
taxes and penalties (including under the Employee Retirement Income Security Act
of 1974, as amended) and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection with or in respect
of such claims, damages, judgments, fines, penalties or amounts paid in
settlement) incurred, paid or suffered in connection with the investigation,
defense, prosecution, settlement or appeal of any Proceeding or any claim, issue
or matter therein.
 
“Proceeding” shall mean any threatened, pending or completed claim, action,
suit, arbitration, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or any other actual, threatened or completed
proceeding whether civil, criminal, administrative or investigative, or any
appeal therefrom.
 
“Voting Securities” shall mean any securities of the Company that are entitled
to vote generally in the election of directors.

 
ARTICLE II.
 
NOTICE OF PROCEEDINGS AND DEFENSE OF CLAIMS
 
2.1           Notice of Proceedings.  The Indemnitee agrees to notify the
Company promptly in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of
Expenses covered hereunder, but the Indemnitee’s failure to so notify the
Company shall relieve the Company from any liability which it may have to the
Indemnitee under this Agreement only to the extent the Company was prejudiced by
such failure.
 
2.2           Defense of Claims.  The Company will be entitled to participate,
at its own expense, in any Proceeding of which it has notice.  The Company
jointly with any other indemnifying party similarly notified of any Proceeding
will be entitled to assume the defense of the Indemnitee therein, with counsel
reasonably satisfactory to the Indemnitee, upon delivery of written notice to
Indemnitee of its election to do so; provided, however, that the Company shall
not be entitled to assume the defense of the Indemnitee in any Proceeding if
there has been a Change in Control or if the Indemnitee has reasonably concluded
that there may be a conflict of interest between the Company and the Indemnitee
with respect to such Proceeding.  After notice from the Company to the
Indemnitee of its election to assume the defense of the Indemnitee and the
retention by the Company of counsel reasonably satisfactory to Indemnitee, the
Company will not be liable to the Indemnitee under this Agreement for any
Expenses incurred thereafter by the Indemnitee in connection with the defense of
any Proceeding, other than reasonable costs of investigation or as otherwise
provided below.  Notwithstanding the foregoing, the Indemnitee shall have the
right to employ his own counsel in any such Proceeding if (i) the employment of
counsel by the Indemnitee has been authorized by the Company or by a majority of
the Board; (ii) the Indemnitee shall have reasonably concluded that counsel
employed by the Company may not adequately represent the Indemnitee and shall
have so informed the Company; or (iii) the Company shall not in fact have
employed counsel to assume the defense of the Indemnitee in such Proceeding or
the counsel employed by the Company shall not, in fact, have assumed such
defense or such counsel shall not be acting, in connection therewith, with
reasonable diligence; and in each such case the fees and expenses of the
Indemnitee’s counsel shall be an Expense under this Agreement and shall
therefore be advanced by the Company in accordance with this Agreement.  If
Indemnitee employs his own counsel pursuant to the prior sentence, Indemnitee
shall use good faith efforts to utilize the same counsel as other similarly
situated officers and directors of the Company who have similar interests and
defenses in a Proceeding unless the Indemnitee shall have reasonably concluded
that counsel employed by other officers and directors may not adequately
represent the Indemnitee.

 
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2.3           Settlement of Claims.  The Company shall not settle any Proceeding
in any manner which would impose any liability, penalty or limitation on the
Indemnitee without the written consent of the Indemnitee; provided, however,
that the Indemnitee will not unreasonably withhold or delay consent to any
proposed settlement. The Company shall not be liable to indemnify the Indemnitee
under this Agreement or otherwise for any amounts paid in settlement of any
Proceeding effected by the Indemnitee without the Company’s written consent,
which consent shall not be unreasonably withheld or delayed.

 
ARTICLE III.
 
PERIOD OF LIMITATIONS

 
No legal action shall be brought and no cause of action shall be asserted by or
in the right of the Company against Indemnitee, Indemnitee’s estate, spouse,
heirs, executors or personal or legal representatives after the expiration of
the later of (a) two years from the date of accrual of such cause of action, and
(b) one year from the date that the Company knew, or could have discovered with
the exercise of reasonable diligence, of the circumstances giving rise to such
cause of action.   Any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such period; provided, however, that if any shorter period of
limitations is otherwise applicable to any such cause of action, such shorter
period shall govern.
 
ARTICLE IV.
 
INDEMNIFICATION
 
4.1           General.  In addition to the Company’s specific obligations set
forth below, the Company hereby agrees to indemnify the Indemnitee to the
fullest extent required or permitted by the Company’s Articles of Incorporation
or Bylaws and by applicable law in effect on the date hereof and to such greater
extent as applicable law may hereafter from time to time permit. For all matters
for which the Indemnitee is entitled to indemnification under this Article IV,
the Indemnitee shall be entitled to advancement of Expenses in accordance with
Article V hereof.  The Company’s obligation to indemnify and advance Expenses
pursuant to this Agreement shall apply to all Proceedings, regardless of whether
the underlying events, acts or omissions occurred before or after the date
hereof.

 
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4.2           Proceeding Other Than a Proceeding by or in the Right of the
Company.  If the Indemnitee was, is, or becomes a party to, or witness or other
participant in, or is threatened to be made a party to, or witness or other
participant in, any Proceeding (other than a Proceeding by or in the right of
the Company) by reason of, or in connection with, his Corporate Status, or by
reason of alleged action or inaction by him in any such capacity, the Company
shall, subject to the limitations set forth in Section 4.6 below, hold harmless
and indemnify Indemnitee against any and all Expenses and Liabilities actually
and reasonably incurred by or for the Indemnitee in connection with the
Proceeding unless it is established pursuant to this Agreement that act(s) or
omission(s) of the Indemnitee giving rise thereto were not Good Faith Act(s) or
Omission(s).
 
4.3           Proceedings by or in the Right of the Company.  If the Indemnitee
was, is or becomes a party to, or witness or other participant in, or is
threatened to be made a party to, or witness or other participant in, any
Proceeding by or in the right of the Company, by reason of, or in connection
with, his Corporate Status, or by reason of alleged action or inaction by him in
such capacity, then the Company shall, subject to the limitations set forth in
Section 4.6 below, hold harmless and indemnify Indemnitee against any and all
Liabilities and Expenses actually incurred by or for him in connection with the
Proceeding, unless it is established pursuant to this Agreement that the act(s)
or omission(s) of the Indemnitee giving rise to the Proceeding were not Good
Faith Act(s) or Omission(s); except that no indemnification under this Section
4.3 shall be made in respect of any claim, issue or matter as to which the
Indemnitee shall have been adjudged to be liable to the Company, unless a court
of appropriate jurisdiction (including, but not limited to, the court in which
such Proceeding was brought) shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
regardless of whether the Indemnitee’s act(s) or omission(s) were found to be a
Good Faith Act(s) or Omission(s), the Indemnitee is fairly and reasonably
entitled to indemnification for such Expenses which such court shall deem
proper.
 
4.4           Indemnification of a Party Who is Wholly or Partly
Successful.  Notwithstanding any other provision of this Agreement, to the
extent that the Indemnitee is, by reason of the Indemnitee’s Corporate Status, a
party to and is successful, on the merits or otherwise, in any Proceeding, the
Indemnitee shall be indemnified by the Company to the maximum extent permitted
by applicable law, against all Expenses and Liabilities actually incurred by or
for him in connection therewith. If the Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, as to one or more
but less than all claims, issues or matters in such Proceeding, the Company
shall hold harmless and indemnify the Indemnitee to the maximum extent permitted
by applicable law, against all Expenses and Liabilities actually and reasonably
incurred by or for him in connection with each successfully resolved claim,
issue or matter in such Proceeding. Resolution of a claim, issue or matter by
dismissal, with or without prejudice, except as provided in Section 4.6 hereof,
shall be deemed a successful result as to such claim, issue or matter, so long
as there has been no finding (either adjudicated or pursuant to Article VI
hereof) that the act(s) or omission(s) of the Indemnitee giving rise thereto
were not a Good Faith Act(s) or Omission(s).

 
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4.5          Indemnification for Expenses as Witness.  Notwithstanding any other
provision of this Agreement, to the extent that the Indemnitee, by reason of the
Indemnitee’s Corporate Status, has prepared to serve or has served as a witness
in any Proceeding, or has participated in discovery proceedings or other trial
preparation, the Indemnitee shall be held harmless and indemnified against all
Expenses actually and reasonably incurred by or for him in connection therewith.
 
4.6          Specific Limitations on Indemnification.  In addition to the other
limitations set forth in this Article IV, and notwithstanding anything in this
Agreement to the contrary, the Company shall not be obligated under this
Agreement to make any payment to the Indemnitee for indemnification or Expenses
with respect to any Proceeding:

To the extent that payment is actually made to the Indemnitee under any
insurance policy or is made on behalf of the Indemnitee by or on behalf of the
Company otherwise than pursuant to this Agreement.
 
To the extent it is determined pursuant to this Agreement that a claim of the
Indemnitee for such indemnification arose from:  (i) a breach by the Indemnitee
of the Indemnitee’s duty of loyalty to the Company or its shareholders; (ii)
acts or omissions of the Indemnitee that are not Good Faith Acts or Omissions or
which are the result of active and deliberate dishonesty; (iii) acts or
omissions of the Indemnitee which the Indemnitee had reasonable cause to believe
were unlawful; or (iv) a transaction in which the Indemnitee or one of his
“affiliates” (as that term is construed under Rule 405 promulgated under the
Securities Act of 1933, as amended) actually received an improper personal
benefit in money, property or service.
 
If there has been no Change in Control, for Liabilities in connection with
Proceedings settled by the Indemnitee without the consent of the Company which
consent, however, shall not be unreasonably withheld.
 
If the Proceeding was initiated by Indemnitee (other than Proceedings initiated
by Indemnitee in defense and Proceedings to enforce Indemnitee’s rights under
this Agreement or the Company’s Articles of Incorporation or Bylaws as
contemplated by Section 6.7).
 
ARTICLE V.
 
ADVANCEMENT OF EXPENSES

 
The Company shall advance to the Indemnitee all Expenses which are incurred by
or for Indemnitee in connection with any Proceeding (whether or not Indemnitee
is a party in such Proceeding) for which the Indemnitee is entitled to
indemnification pursuant to Article IV hereof, in advance of the final
disposition of such Proceeding, provided that (i) the Indemnitee provides the
Company with written affirmation of his good faith belief that he has met the
standard of conduct necessary for indemnification by the Company pursuant to
Article IV hereof, and (ii) the Indemnitee provides the Company with a written
agreement (the “Undertaking”) to repay the amount paid or reimbursed by the
Company, together with the applicable legal rate of interest thereon (computed
at the Company’s cost of borrowing funds over the period of advance from the
Company’s principal lender from time to time), if it is ultimately determined
that the Indemnitee is not entitled to be indemnified by the Company for such
amount. The Company shall advance such expenses within twenty (20) days after
the receipt by the Company of the Undertaking. The Indemnitee hereby agrees to
repay any Expenses advanced hereunder if it shall ultimately be determined that
the Indemnitee is not entitled to be indemnified against such Expenses. Any
advances and the undertaking to repay pursuant to this Article V shall be
unsecured.

 
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ARTICLE VI.
PROCEDURE FOR PAYMENT OF LIABILITIES;
DETERMINATION OF RIGHT TO INDEMNIFICATION
 
6.1           Procedure for Payment.  To obtain indemnification for Liabilities
under this Agreement, the Indemnitee shall submit to the Company a written
request for payment, including with such request such documentation as is
reasonably available to the Indemnitee and reasonably necessary to determine
whether, and to what extent, the Indemnitee is entitled to indemnification and
payment hereunder.  The Secretary of the Company, or such other person as shall
be designated by the Board of Directors, promptly upon receipt of a request for
indemnification shall advise the Board of Directors, in writing, of such
request. Any indemnification payment due hereunder shall be paid by the Company
within twenty (20) days of Indemnitee submitting such a request for payment,
unless in such twenty (20) day period the Company notifies the Indemnitee that
the Board of Directors has determined that Indemnitee is not entitled to
indemnification under this Agreement, in which case such indemnification payment
shall be paid by the Company no later than ten (10) days following any
subsequent determination, pursuant to this Article VI that such indemnification
payment is proper hereunder.
 
6.2           No Determination Necessary when the Indemnitee was Successful.  To
the extent the Indemnitee has been successful, on the merits or otherwise, in
defense of any Proceeding referred to in Sections 4.2 or 4.3 above or in the
defense of any claim, issue or matter described therein, the Company shall
indemnify the Indemnitee against Liabilities and Expenses actually and
reasonably incurred by or for him in connection with the investigation, defense
or appeal of such Proceeding.
 
6.3           Determination of Good Faith Act or Omission.  In the event that
Section 6.2 is inapplicable, the Company also shall hold harmless and indemnify
the Indemnitee unless the Company shall prove by clear and convincing evidence
to a quorum of the Board consisting of Disinterested Directors that the act(s)
or omission(s) of the Indemnitee giving rise to the Proceeding were not Good
Faith Act(s) or Omission(s).  In such a circumstance, the Indemnitee shall then
have the right to appeal the decision of the Board to a panel of arbitrators as
provided in Section 6.4.

 
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6.4           Right to Appeal.  The Indemnitee shall be entitled to appeal the
Company’s decision under Section 6.3 that the Indemnitee is not entitled to
indemnification before a panel of three arbitrators one of whom is selected by
the Company, another of whom is selected by the Indemnitee and the last of whom
is selected jointly by the first two arbitrators so selected.  As soon as
practicable, and in no event later than thirty (30) days after written notice of
the Indemnitee’s decision to appeal pursuant to this Section 6.4, the Company
shall, at its own expense, submit to the arbitration panel in such manner as the
Indemnitee or the Indemnitee’s counsel may reasonably request, its claim that
the Indemnitee is not entitled to indemnification, and the Company shall act in
the utmost good faith to assure the Indemnitee a complete opportunity to defend
against such claim.  The fees and expenses of the arbitration panel contemplated
hereunder shall be paid by the Company.  If the Company shall fail to submit the
matter to the arbitration panel within thirty (30) days after the Indemnitee’s
written notice or if the arbitration panel shall have failed to make the
requested determination within thirty (30) days after the matter has been
submitted to it by the Company, the requisite determination that the Indemnitee
has the right to indemnification shall be deemed to have been made.
 
6.5           Right to Judicial Review of Arbitration Panel
Decision.  Notwithstanding a determination by an arbitration panel listed in
Section 6.4 above that the Indemnitee is not entitled to indemnification with
respect to a specific Proceeding, the Indemnitee shall have the right to apply
to the court in which that Proceeding is or was pending, or to a court  in the
State of Delaware, for the purpose of enforcing the Indemnitee’s right to
indemnification pursuant to this Agreement.  Such enforcement action shall
consider the Indemnitee’s entitlement to indemnification on the record presented
to the arbitration panel, but the Indemnitee shall not be prejudiced by reason
of a prior determination that the Indemnitee is not entitled to
indemnification.  The Company shall be precluded from asserting that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable.  The Company further agrees to stipulate in any such judicial
proceeding that the Company is bound by all the provisions of this Agreement and
is precluded from making any assertion to the contrary.
 
6.6           Right to Seek Judicial Determination.  Notwithstanding any other
provision of this Agreement to the contrary, at any time after sixty (60) days
after a request for indemnification has been made to the Company (or upon
earlier receipt of written notice that a request for indemnification has been
rejected) and within one (1) year after the making of such indemnification
request, the Indemnitee may petition the court in which that Proceeding is or
was pending or a court in the State of Delaware, to determine whether the
Indemnitee is entitled to indemnification hereunder, and such court thereupon
shall have the exclusive authority to make such determination, unless and until
such court dismisses or otherwise terminates the Indemnitee’s action without
having made such determination.  The court, as petitioned, shall make an
independent determination of whether the Indemnitee is entitled to
indemnification hereunder, without regard to any prior determination in any
other forum as provided hereby.
 
6.7           Expenses under this Agreement.  Notwithstanding any other
provision in this Agreement to the contrary, the Company shall indemnify the
Indemnitee against all Expenses incurred by the Indemnitee in connection with
any hearing or proceeding under this Article VI involving the Indemnitee if the
Indemnitee is successful in such claim and against all Expenses incurred by the
Indemnitee in connection with any other action between the Company and the
Indemnitee involving the interpretation or enforcement of the rights of the
Indemnitee under this Agreement, if it is determined that the Indemnitee was
entitled to indemnification in whole or in part thereunder.

 
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ARTICLE VII.
PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS
 
7.1           Burden of Proof.  In making a determination with respect to
entitlement to indemnification hereunder, the person, persons, entity or
entities making such determination shall presume that the Indemnitee is entitled
to indemnification under this Agreement and the Company shall have the burden of
proof to overcome that presumption.
 
7.2           Effect of Other Proceedings.  The termination of any Proceeding or
of any claim, issue or matter therein, by judgment, order or settlement shall
not create a presumption that the act(s) or omission(s) giving rise to the
Proceeding were not Good Faith Act(s) or Omission(s).  The termination of any
Proceeding by conviction shall create a rebuttable presumption that the act(s)
or omission(s) of the Indemnitee giving rise to the Proceeding were not Good
Faith Act(s) or Omission(s).
 
7.3           Reliance as Safe Harbor.  For purposes of any determination of
whether any act or omission of the Indemnitee was a Good Faith Act or Omission,
each act of the Indemnitee shall be deemed to be a Good Faith Act or Omission if
the Indemnitee’s action is based on the records or books of accounts of the
Company, including financial statements, or on information supplied to the
Indemnitee by the officers of the Company in the course of their duties, or on
the advice of legal counsel for the Company or on information or records given
or reports made to the Company by an independent certified public accountant or
by an appraiser or other expert selected with reasonable care by the
Company.  The provisions of this Section 7.3 shall not be deemed to be exclusive
or to limit in any way the other circumstances in which the Indemnitee may be
deemed to have met the applicable standard of conduct set forth in this
Agreement or under applicable law.
 
7.4           Actions of Others.  The knowledge and/or actions, or failure to
act, of any other director, officer, Founder, agent or employee of the Company
shall not be imputed to the Indemnitee for purposes of determining the right to
indemnification under this Agreement.

 
ARTICLE VIII.
 
INSURANCE

The Company shall maintain officers’ and directors’ or similar liability
insurance, reasonable and consistent with industry standards for companies of
the Company’s size and type, to protect itself and any director or officer of
the Company against any expense, liability or loss, and such insurance shall
cover the Indemnitee to at least the same degree as each other director and/or
officer of the Company.  The Company shall give prompt notice to the insurer or
insurers providing such officers’ and directors’ or similar liability insurance
of the commencement of a potentially covered proceeding in accordance with the
provisions set forth in the respective policies.  The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay on behalf
of Indemnitee all amounts payable as a result of such proceeding in accordance
with the terms of such policies.

 
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ARTICLE IX.
 
MISCELLANEOUS
 
9.1           Non-Exclusivity.  The rights of the Indemnitee hereunder shall be
in addition to any other rights to which the Indemnitee may at any time be
entitled under any provision of law or the Articles of Incorporation or the
Bylaws of the Company, as the same may be in effect from time to time, or any
agreement, a vote of shareholders of the Company or a resolution of directors of
the Company or otherwise, and to the extent that during the term of this
Agreement the rights of the then-existing directors and officers of the Company
are more favorable to such directors or officers than the rights currently
provided to the Indemnitee under this Agreement, the Indemnitee shall be
entitled to the full benefits of such more favorable rights.  No amendment,
alteration, rescission or replacement of this Agreement or any provision hereof
which would in any way limit the benefits and protections afforded to an
Indemnitee hereby shall be effective as to such Indemnitee with respect to any
action or inaction by such Indemnitee in the Indemnitee’s Corporate Status prior
to such amendment, alteration, rescission or replacement.
 
9.2           Subrogation.  In the event of any payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of the Indemnitee, who shall execute all documents required
and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such
rights.
 
9.3           Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given (i) if
delivered by hand, by courier or by telegram and receipted for by the party to
whom said notice or other communication shall have been directed at the time
indicated on such receipt; (ii) if by facsimile at the time shown on the
confirmation of such facsimile transmission; or (iii) if by U.S. certified or
registered mail, with postage prepaid, on the third business day after the date
on which it is so mailed:

 
If to the Indemnitee:
As shown with the Indemnitee’s signature below.

 
If to the Company, to:
Vitacost.com, Inc.

5400 Broken Sound Blvd
#500
Boca Raton, FL 33487
Attention:        Chief Financial Officer

or to such other address as may have been furnished to the Indemnitee by the
Company or to the Company by the Indemnitee, as the case may be.
 
9.4           Consent to Jurisdiction.  The Company and the Indemnitee each
hereby irrevocably consent to the jurisdiction of the courts of the State of
Delaware for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement and agree that any action instituted
under this Agreement shall be brought only in the state courts of the State of
Delaware.

 
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9.5           Governing Law.  The parties agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the substantive laws
of the State of Delaware, without application of the conflict of laws principles
thereof.
 
9.6           Binding Effect.  Except as otherwise provided in this Agreement,
this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.  The Company shall
require any successor or assignee (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of its
respective assets or business, by written agreement in form and substance
reasonably satisfactory to the Indemnitee, to assume and agree to be bound by
and to perform this Agreement in the same manner and to the same extent as the
Company would be required to perform absent such succession or assignment.  This
Agreement shall continue in effect regardless of whether Indemnitee continues to
serve as an executive officer, director, employee, agent or other representative
of the Company.  Notwithstanding anything to the contrary contained herein, this
Agreement may be terminated or amended by the Company with the written consent
of not less than seventy-five percent (75%) of the Pre-Change in Control
Directors.
 
9.7           Waiver.  No termination, cancellation, modification, amendment,
deletion, addition or other change in this Agreement, or any provision hereof,
or waiver of any right or remedy herein, shall be effective for any purpose
unless specifically set forth in a writing signed by the party or parties to be
bound thereby.  The waiver of any right or remedy with respect to any occurrence
on one occasion shall not be deemed a waiver of such right or remedy with
respect to such occurrence on any other occasion.
 
9.8           Entire Agreement.  This Agreement, constitutes the entire
agreement and understanding among the parties hereto in reference to the subject
matter hereof; provided, however, that the parties acknowledge and agree that
the Articles of Incorporation of the Company contain provisions on the subject
matter hereof and that this Agreement is not intended to, and does not, limit
the rights or obligations of the parties hereto pursuant to such Articles of
Incorporation.
 
9.9           Titles.  The titles to the articles and sections of this Agreement
are inserted for convenience of reference only and should not be deemed a part
hereof or affect the construction or interpretation of any provisions hereof.
 
9.10         Severability.  Every provision of this Agreement is severable.  In
the event that the invalidity or any term or provision (including any provision
within a single section, paragraph or section) is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, the remaining terms
and provisions shall remain enforceable to the fullest extent permitted by
law.  Furthermore, to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of this Agreement
containing any provision held to be invalid, void or otherwise unenforceable,
that is not itself invalid, void or otherwise enforceable) shall be construed so
as to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.

 
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9.11           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one agreement binding on all the parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

COMPANY:
 
INDEMNITEE:
     
Vitacost.com, Inc., a Delaware corporation
         
By:
/s/ Mary L. Marbach
 
/s/ Jeffrey Horowitz
Its:
General Counsel and Corporate Secretary
 
Jeffrey Horowitz
         
Address:
7273 Fisher Island Drive
     
Fisher Island, FL 33109

 
 
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