Exhibit 10.1

 

Natrol, Inc.

 

Summary of Terms

of
Agreements with Wayne Bos

 

This term sheet sets forth a summary of the principal terms of the Employment
Agreement (the “Employment Agreement”) to be entered into by and between
Natrol, Inc. (the “Company”) and Wayne Bos (the “Executive”).

 

I.      Equity Terms

 

 

 

 

 

Award

 

Executive or his designee will be granted non-qualified options to purchase
6,029,500 shares of the Company’s common stock.

 

 

 

Vesting

 

Fully vested at time of grant.

 

 

 

Exercise Price of Options

 

The exercise price for such options shall be $2.282.

 

 

 

Term

 

Five years from grant date. Subject to earlier termination upon sale of the
Company (unless assumed by the buyer of the Company). If Executive voluntarily
terminates his employment during the one year period after start of employment,
options may only be exercised in the 90 day period following termination of
employment.

 

 

 

Payment of Exercise Price

 

Cash or cashless exercise

 

 

 

Transfer of Options

 

Permitted only for estate planning purposes

 

 

 

Withholding

 

Company to withhold taxes as required by law

 

 

 

Conditions for resale

 

Except as set forth below, shares received upon exercise of options may not be
sold for a period of three years after commencement of employment.

 

 

 

 

 

•      1,000,000 shares may be sold immediately;

 

 

•      1,000,000 shares may be sold at any time after the Threshold Share Price
(as defined below) is equal to or greater than $3.00 per share;

 

 

•      1,000,000 shares may be sold at any time after the Threshold Share Price
is equal to or greater than $3.50 per share;

 

 

•      1,000,000 shares may be sold at any time after the Threshold Share Price
is equal to or greater than $4.00 per share;

 

 

•      1,000,000 shares may be sold at any time after the Threshold Share Price
is equal to or greater than $4.50 per share; and,

 

 

•      1,029,500 shares may be sold at any time after the Threshold Share Price
is equal to or greater than $5.00 per share.

 

 

 

 

 

The Threshold Share Price means that the closing price of the Company’s common
stock equals or exceeds the relevant threshold for a period of thirty
consecutive trading days.

 

 

 

 

 

All shares may be sold with no thresholds in place after three years.

 

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Company Trading Policy

 

The shares may only be sold during open windows as provided in the Company’s
insider trading policy.

 

 

 

II.    Employment

 

 

 

 

 

Title

 

President/Chief Executive Officer. Executive shall also become a director of the
Company. Executive shall devote his full working time to the business of the
Company but shall not be required to spend more than 180 days per year in the
United States.

 

 

 

Role

 

Work in tandem with the Company’s founder who will become the Executive
Chairman. The by-laws of the Company will reflect this partnership arrangement.

 

 

 

Salary

 

US $600,000 per annum.

 

 

 

Bonus

 

Eligible to participate in the Company’s Bonus Compensation Plan as approved
annually by the Board of Directors.

 

 

 

Benefits

 

Executive will participate in all medical, pension, profit sharing, dental and
life insurance plans and disability income plans, retirement arrangements and
other employment benefits as may be in effect from time to time for executive
officers of the Company generally. Executive will be reimbursed for business
expenses in accordance with the Company’s policies.

 

 

 

Employment Term

 

Indefinite.

 

 

 

Indemnification

 

The Company and the Executive shall enter into an indemnification agreement.

 

 

 

Continuing Obligations

 

Noncompetition and nonsolicitation covenants will cover the term of employment
and a period of 24 months following termination of employment.

 

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