Exhibit 10.1
TRANSITION AGREEMENT
 
This Transition Agreement (the “Agreement”) is effective as of August 15, 2018
(the “Effective Date”) between FitLife Brands, Inc., a Nevada corporation (the
“Company”), and Michael Abrams (“Abrams”) (each of the foregoing individually a
“Party” and collectively the “Parties”).
 
WHEREAS, Abrams is the Chief Financial Officer of the Company and a member of
the Company’s Board of Directors; and
 
WHEREAS, the Parties desire to transition Abrams’ responsibilities with the
Company, including Abrams’ service on the Company’s Board of Directors, each on
the terms and conditions set forth herein.
 
NOW, THEREFORE, in consideration of the covenants, promises and representations
set forth herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto, intending to
be legally bound, hereby agree as follows:
 
1. Continued Employment. Abrams’ employment with the Company shall continue
until February 15, 2019 (the “Termination Date”) at Abrams’ current annual
salary, provided, however, the parties agree and acknowledge that Abrams’
employment with the Company may be terminated by either Party at any time after
the date hereof, with or without notice, with or without cause (“Early
Termination”). The Parties agree and acknowledge that in the event of Early
Termination, Abrams shall only be entitled to the benefits specifically set
forth in this Agreement.
 
2. Service on the Board of Directors. On the earlier to occur of the date of
Early Termination or the Termination Date, Abrams shall tender his resignation
as a member of the Company’s Board of Directors, effective as of such date. Such
resignation shall be in the form attached hereto as Exhibit A (“Resignation”),
which Resignation shall be executed and held by counsel for the Company and
delivered to the Company effective on the date of Early Termination or the
Termination Date, as the case may be (the “Effective Date”).
 
3. Severance Benefits. In the event Abrams’ employment by the Company is
terminated by either Party prior to the Termination Date, Abrams shall be paid
as severance the amount otherwise due and payable Abrams under the terms of this
Agreement from the date of Early Termination up to and including the Termination
Date (“Severance Benefits”), which Severance Benefits shall be paid in equal
biweekly installments corresponding with the Company’s existing payroll
practices, beginning on the Early Termination Date and continuing through the
Termination Date. Abrams acknowledges that the Severance Benefits represent
consideration to which he would not otherwise be entitled and is in lieu of any
rights or claims that he may have with respect to any Severance Benefits or
other remuneration from the Company. For the avoidance of doubt, Abrams
acknowledges and agrees that he will receive no additional payments other than
Severance Benefits set forth herein, including, but not limited to, for services
rendered for accrued or unused vacation, or paid time off; provided, however,
that Abrams shall be entitled to reimbursement by the Company for all bonafide
business expenses incurred by Abrams up to and including the earlier to occur of
the Early Termination Date or Termination Date.
 
4. Release. For and in consideration for the continued employment by the Company
and/or the payment to Abrams of the Severance Benefits Abrams will receive from
the Company, as the case may be, Abrams, on his own behalf and on behalf of his
successors and assigns (collectively referred to as “Releasor”), effective on
the date hereof and as of the Effective Date, hereby release and forever
discharge the Company, its predecessors, successors, corporate affiliates,
parent entities and subsidiaries and their respective officers, directors,
agents, representatives, employees, consultants and advisors (collectively
referred to as “Releasee”), from any and all claims, counterclaims, demands,
debts, actions, causes of action, suits, costs, attorneys’ fees, damages,
indemnities, obligations and/or liabilities of any nature whatsoever
(“Release”), whether known or unknown, which Releasor ever had, now has or
hereafter can, shall or may have against Releasee, for, upon or by reason of any
matter, cause or thing whatsoever from the beginning of the world to the date of
this Release, including, but not limited to, the following: (i) all such claims
and demands directly or indirectly arising out of or in any way connected with
Abrams’ employment with the Company and/or its affiliated entities, parents and
subsidiaries or the termination of that employment; (ii) all such claims and
demands related to salary, bonuses, commissions, restricted stock, unvested
stock options or unvested warrants, or any other benefits or compensation which
have, are or may be due to me or my beneficiaries from the Company and/or its
affiliated entities, parents and subsidiaries, including vacation pay, fringe
benefits and/or any other form of compensation; (iii) any claims
 
 
 

 
 
arising under any federal, state or local law, statute or ordinance, including,
without limitation, Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Older Workers Benefit Protection Act, the
Americans With Disabilities Act, the Civil Rights Act of 1991, the Fair Labor
Standards Act, the Equal Pay Act, the Employee Retirement Income Security Act of
1974, the Family and Medical Leave Act of 1993, the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”), Chapter 48 of the Nebraska Statutes,
Nebraska’s Fair Employment Practices Act, Part I, Title XXI of the General Laws
of the Commonwealth of Massachusetts, and Chapter 613 of the Nevada Revised
Statutes; and (iv) any claims for breach of contract related to Abrams’
employment, express or implied, including any claim for breach of any implied
covenant of good faith and fair dealing, wrongful discharge, discrimination,
harassment, fraud, defamation, intentional tort, emotional distress and
negligence. Notwithstanding the foregoing, Releasor does not release any rights
he may have (a) to payment of the Severance Benefits in the event Abrams’
employment is terminated for any reason prior to the Termination Date; (b) to
payment of accrued benefits under an employee benefit plan, to the extent and in
the manner prescribed by the plan documents; (c) to payment of bona fide expense
reimbursements; (d) to elect continued healthcare coverage under an employee
health plan pursuant to COBRA, it being understood and agreed that the cost of
health insurance coverage shall be paid by the Company until the Termination
Date; provided, however, in the event of Early Termination initiated by Abrams,
the Company shall not be responsible for such health care costs as of the Early
Termination date, and although Abrams may continue such coverage, he shall
assume all costs of healthcare insurance as of the date of, and subsequent to,
the Early Termination; (e) to file, or assist in the investigation of, a charge
against the Company with a state or federal agency with jurisdiction over
unlawful employment practices; or (f) to apply for and receive unemployment
benefits.
 
5. Covenants. The benefits provided for under this Agreement are subject to the
following:
 
5.1 Abrams’ continued compliance with the restrictive covenants set forth in any
other agreement between Abrams and the Company in effect at the date hereof and
continuing through the Termination Date. By way of example, as of the date of
this Agreement, Abrams remains bound by the restrictive covenants set forth in
any grant documents governing the grant of equity awards to Abrams.
 
5.2 Until the date of Early Termination or the Termination Date, Abrams shall:
 
(a)           transition and transfer to the Chief Executive Officer, or such
executive determined by the Chief Executive Officer (the “Designated Officer”),
all duties and responsibilities of Abrams that existed at any time prior to the
date of this Agreement, including, but not limited to, providing to Designated
Officer all trade secrets, information regarding the Company’s products,
customers, distributors, vendors, or otherwise related to the Company’s
business, products or operations, whether or not confidential, within the
knowledge or domain of Abrams;
 
(b)           provide a list to the Designated Officer of all assets, including
inventory, fixed assets, website domains, or other property, tangible or
intangible, directly or indirectly controlled by, or under common control with,
Abrams as of the date of this Agreement (“Company Assets”). To the extent that
Abrams has disposed of any Company Assets prior to the date of this Agreement,
directly or indirectly, Abrams shall provide to the Designated Officer a list of
such Company Assets disposed of, and shall remit to the Company any
consideration received by Abrams for such Company Assets; and
 
(c)           return to the Company all Company Assets. The Parties agree and
acknowledge that the term “Company Assets” as used in this Section 5.3 shall not
include any tangible assets with a value less than $500.00 (product past its
expiration date is deemed to have no value).
 
5.3
Nondisclosure and Nonuse of Confidential Information.
 
(a) Abrams shall not disclose or use at any time, after the Effective Date, any
Confidential Information (as defined below) of which Abrams became aware during
his employment with the Company, whether or not such information is developed by
him, except to the extent that such disclosure or use is directly related to and
required by Abrams’ performance in good faith of duties assigned to Abrams by
the Company or is required to be disclosed by law, court order, or similar
compulsion; provided, however, that such disclosure shall be limited to the
extent so required or compelled; and provided, further, that Abrams shall give
the Company notice of such disclosure and cooperate with the Company in seeking
suitable protection.
 
 
 

 
 
(b) As used in this Agreement, the term “Confidential Information” means
information that is not generally known to the public and that is used,
developed or obtained by the Company or any Affiliate in connection with its
business, including, but not limited to, information, observations and data
obtained by Abrams while employed by the Company or any predecessors thereof
(including those obtained prior to the Effective Date) concerning the Company’s
or any affiliate’s (i) business or affairs, (ii) products or product formula,
(iii) fees, costs and pricing structures, (iv) designs, (v) analyses, (vi)
drawings, photographs and reports, (vii) computer software, including operating
systems, applications and program listings, (viii) flow charts, manuals and
documentation, (ix) data bases, (x) accounting and business methods, (xi)
inventions, devices, new developments, methods and processes, whether patentable
or unpatentable and whether or not reduced to practice, (xii) customers,
clients, suppliers and publishers and customer, client, supplier and publisher
lists, (xiii) other copyrightable works, (xiv) all production methods,
processes, technology and trade secrets, (xv) business strategies, acquisition
plans and candidates, financial or other performance data and personnel lists
and data, and (xvi) all similar and related information in whatever form.
Confidential Information shall not include any information that has been
published in a form generally available to the public prior to the date Abrams
proposes to disclose or use such information. Confidential Information shall not
be deemed to have been published merely because individual portions of the
information have been separately published, but only if all material features
comprising such information have been published in combination.
 
6. Non-Disparagement. The Parties agree not to defame, disparage or criticize
each other at any time.
 
7. Prohibited Activities. Without the Company’s prior written consent, for a
period of one (1) year from the Effective Date, Abrams shall not (i) solicit,
directly or indirectly, or cause to be solicited the employment of or employ any
person who is now employed by Company (or whose activities are dedicated to the
Company); or (ii) offer or sell product in direct competition with any product
currently offered by the Company up until the Effective Date, directly or
indirectly, or solicit any current customer of the Company, the result of which
is that the Company’s business with such customer is harmed. The Parties agree
that a product shall be deemed to be currently offered provided such products
generate a minimum of $10,000 in revenues during the twelve months prior to the
Effective Date.
 
8. Severability.  If any portion or provision of this Agreement shall to any
extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
 
9. Mutual Drafting. Each Party has had the opportunity to be represented by
counsel of its choice in negotiating this Agreement. This Agreement shall
therefore be deemed to have been negotiated and prepared at the joint request,
direction and construction of the Parties, at arm’s length, with the advice and
participation of counsel, and shall be interpreted in accordance with its terms
without favor to either Party, and no presumption or burden of proof shall arise
favoring or disfavoring either Party by virtue of the authorship of any of the
provisions of this Agreement.
 
10. Withholding Taxes. The Company may withhold from any amounts payable under
this Agreement such federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation.
 
11. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of Nebraska without
giving effect conflicts of law principles that would result in the application
of the substantive laws of another jurisdiction. Each of the Parties consents to
the exclusive jurisdiction of the Federal courts whose districts encompass any
part of the State of Nebraska in connection with any dispute arising under this
Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions. Each Party waives its
right to a trial by jury. Each Party to this Agreement irrevocably consents to
the service of process in any such proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, to such Party at its address
set forth herein. Nothing herein shall affect the right of any Party to serve
process in any other manner permitted by law.
 
 
 

 
 
12. Assignment.  Neither the Company nor Abrams may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the
prior written consent of the other; provided, however, that the Company may
assign its rights and obligations under this Agreement without the consent of
Abrams to any affiliate or in the event that the Company shall after the
Effective Date effect a reorganization, consolidate with or merge into, any
entity or transfer all or substantially all of its properties or assets to any
entity. This Agreement shall inure to the benefit of and be binding upon the
Company and Abrams, their respective successors, executors, administrators,
heirs and permitted assigns.
 
13. Waiver. No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving Party. The failure of either Party to require
the performance of any term or obligation of this Agreement, or the waiver by
either Party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.
 
14. Notices. Any and all notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be effective when
delivered in person, consigned to a reputable national courier service or
deposited in the United States mail, postage prepaid, registered or certified,
and addressed to Abrams at his last known address on the books of the Company
or, in the case of the Company, at its principal place of business, attention of
Chief Executive Officer, or to such other address as any Party may specify by
notice to the other.
 
15. Entire Agreement. This Agreement constitutes the entire agreement among the
Parties hereto pertaining to the subject matter hereof and supersedes all prior
and contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties with respect to such subject matter.
 
16. Amendment.  This Agreement may be amended or modified only by a written
instrument signed by Abrams and by an expressly authorized representative of the
Company.
 
17. Headings.  The headings and captions in this Agreement are for convenience
only, and in no way define or describe the scope or content of any provision of
this Agreement.
 
18. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be an original and all of which together shall constitute
one and the same instrument.
 
 
 
[Remainder of Page Intentionally Left Blank]
 
 
 

 
 
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date and
year first above written.
 
 
ABRAMS
 
_____________________________
Michael Abrams
 
 
FITLIFE BRANDS, INC.
 
_____________________________
By:       Dayton Judd
Title:    Chief Executive Officer
 
 

 
 
EXHIBIT A
 
 
[DATE]
 
Re:            
Resignation
 
To the Board of Directors of FitLife Brands, Inc.
 
Please accept this letter as my official resignation from the Board of Directors
of FitLife Brands, Inc. (the “Company”), and from the Board of Directors of each
direct and indirect subsidiary of the Company, effective as of _______ __, 201_.
 
My resignation is not the result of any disagreement with the Company’s
management regarding any matter related to the Company or otherwise.
 
 
Respectfully,
 
 
Michael Abrams