**Exhibit 10.11**

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**THE SECURITIESREPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACTOF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES ACTS (THE “STATEACTS”), AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISETRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) BY THE HOLDER, EXCEPT UPON THEISSUANCE TO VITACUBE SYSTEMS HOLDINGS, INC. (THE “CORPORATION”) OF A FAVORABLEOPINION OF THE HOLDER’S COUNSEL, OR SUBMISSION TO THE CORPORATION OF SUCH OTHEREVIDENCE AS MAY BE REASONABLY SATISFACTORY TO COUNSEL FOR THE CORPORATION, TOTHE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THESTATE ACTS.**

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**STOCK OPTION AGREEMENT**

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This Stock Option Agreement is made effective as of the 2nd day ofMarch 2005, between **VITACUBE SYSTEMSHOLDINGS, INC.**, a Nevada corporation (the “Corporation”) and EarnestMathis, Jr. (“Optionee”).

 

**BACKGROUND:**

 

A.                                   Optioneeis employed by the Corporation as its chief executive officer and president.

 

B.                                     Pursuantto the terms of Optionee’s employment agreement with the Corporation, theCorporation agreed to issue an option to purchase common stock of theCorporation to Optionee.

 

IN CONSIDERATION of Optionee’s employment with the Corporation and themutual promises and undertakings described below, the parties agree as follows:

 

1.                                       **Grant of Option.**  The Corporation hereby grants to Optionee anoption (“Option”) to acquire from the Corporation, at an initial purchase priceof $3.00 per share, 275,000 fully paid and nonassessable shares of commonstock, par value $.001 per share (the “Common Stock”) of the Corporation.  The Option shall vest and be exercisable asprovided below.  The purchase price pershare of the Common Stock, as adjusted from time to time as provided herein, isreferred to as the “Purchase Price.”

 

2.                                       **Exercise of Option.**

 

2.1.                              This Option is vested andexercisable with respect to 137,500 shares of Common Stock as of the date ofthis Agreement and will vest and be exercisable with respect to the balance ofthe Common Stock on the one-year anniversary of this Agreement.  Each increment of Common Stock that hasvested hereinafter referred to as the “Vested Options.”  Except as provided in Section 2.2, upontermination of Optionee’s

 

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employment with the Corporation, this Option will be exercisable onlywith respect to Vested Options as of the date of termination ofemployment.  Except as provided inSection 2.3, Vested Options will be exercisable for a period of five years followingtheir vesting date.  The Option willterminate and cease to be outstanding for any Vested Options for which theOption has not been exercised on the 5-year anniversary of the respectivevesting dates unless earlier terminated as provided in Section 2.3.

 

2.2.                              If the Corporationterminates Optionee’s employment with the Corporation without “just cause” orOptionee terminates for “good reason” as defined in the Employment Agreementdated March 2, 2005, between the Optionee and the Corporation (the “EmploymentAgreement”), all unvested options will immediately vest and becomeexercisable.  Options that vest underthis section will be exercisable for a period of five years following the dateof Optionee’s termination of employment. The Option will terminate and cease to be outstanding for any Optionswhich vest under this Section 2.2 on the 5-year anniversary of Optionee’stermination of employment

 

2.3.                              If the Corporationterminates Optionee’s employment with the Corporation for “just cause” asdefined in the Employment Agreement, this Option will immediately terminate andcease to be outstanding for any Common Shares that have not been exercised asof the date of Optionee’s termination of employment.

 

3.                                       **Manner of Exercise.**

 

3.1.                              The Optionee may exercisethis Option, in whole or in part, upon surrender of this Option, with theexercise form annexed hereto duly executed, at the office of the Corporation,480 S. Holly Street, Denver, Colorado 80246, or such other office of which theCorporation shall notify the Optionee in writing, together with a certified orbank cashier’s check payable to the order of the Corporation in the amount ofthe Purchase Price times the number of shares of Common Stock being purchased.

 

3.2.                              As soon as practicalafter the exercise date and in compliance by the Optionee with any requestpursuant to Section 6.2 of this Agreement, the Corporation will issue to or onbehalf of the Optionee a certificate representing the shares of Common Stockpurchased pursuant to this Option.

 

3.3.                              In no event shall anyfractional share of Common Stock of the Corporation be issued upon any exerciseof this Option.  If, upon exercise ofthis Option as an entirety, the Optionee would, except as provided in thissection, be entitled to receive a fractional share of Common Stock, then theCorporation shall issue the next higher number of full shares of Common Stock,issuing a full share with respect to such fractional share.

 

4.                                       **Reservation of Shares.**  The Corporation covenants that it will at alltimes reserve and keep available a number of its authorized shares of CommonStock, free from all preemptive rights, which will be sufficient to permit theexercise of this Option.  The Corporationfurther covenants that such shares as may be issued pursuant to the exercise ofthis

 

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Option will, upon issuance, beduly and validly issued, fully paid and nonassessable and free from all taxes,liens, and charges.

 

5.                                       **Adjustments to Purchase Price.**

 

5.1.                              If the Corporation shallat any time prior to the expiration of this Option subdivide its outstandingshares of Common Stock, by split-up or otherwise, or combine its outstandingshares of Common Stock, or issue additional shares of Common Stock in paymentof a stock dividend in respect of its shares of Common Stock, the PurchasePrice then applicable to shares covered by this Option shall forthwith beproportionately decreased in the case of a subdivision or stock dividend, orproportionately increased in the case of a combination.

 

5.2.                              In the case of anyreclassification, capital reorganization, or change of the outstanding sharesof Common Stock of the Corporation (other than as a result of a subdivision,combination or stock dividend), or in the case of any consolidation of theCorporation with, or merger of the Corporation into, another corporation orother business organization (other than a consolidation or merger in which theCorporation is the continuing corporation and which does not result in anyreclassification or change of the outstanding shares of Common Stock of theCorporation), or in the case of any sale or conveyance to another corporationor other business organization of the property of the Corporation as anentirety or substantially as an entirety, at any time prior to the expiration ofthis Option, then, as a condition of such reclassification, reorganization,change, consolidation, merger, sale or conveyance, lawful provision shall bemade, and duly executed documents evidencing the same from the Corporation orits successor shall be delivered to the Optionee of this Option, so that theOptionee shall have the right prior to the expiration of this Option topurchase, at a total price not to exceed that payable upon the exercise of theunexercised portion of this Option, the kind and amount of shares of stock andother securities and property receivable upon such reclassification,reorganization, change, consolidation, merger, sale or conveyance, by anOptionee of the number of shares of Common Stock of the Corporation which mighthave been purchased by the Optionee immediately prior to such reclassification,reorganization, change, consolidation, merger, sale, or conveyance, and in anysuch case appropriate provisions shall be made with respect to the rights andinterest of the Optionee to the end that the provisions hereof (including,without limitation, provisions for the adjustment of the Purchase Price and ofthe number of shares purchasable upon exercise of this Option) shall thereafterbe applicable in relation to any shares of stock and other securities andproperty thereafter deliverable upon exercise hereof.

 

5.3.                              Whenever the PurchasePrice is adjusted, as herein provided, the Corporation shall promptly deliverto the Optionee a certificate setting forth the Purchase Price after suchadjustment and setting forth a brief statement of the facts requiring suchadjustment.

 

5.4.                              If at any time prior tothe expiration or exercise of this Option, the Corporation shall pay anydividend or make any distribution upon its shares of Common Stock or shall makeany subdivision or combination of, or other change in its shares of

 

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Common Stock, the Corporation shall cause notice thereof to be mailed,first class, postage prepaid, to the Optionee at least ten full business daysprior to the record date set for determining the holders of Common Stock whoshall participate in such dividend, distribution, subdivision, combination orother change.  Such notice shall alsospecify the record date as of which holders of Common Stock who shallparticipate in such dividend or distribution are to be determined.  Failure to give such notice, or any defecttherein, shall not affect the legality or validity of any dividend ordistribution.

 

6.                                       **Restricted Shares.**

 

6.1.                              Neither this Option northe shares of Common Stock issuable upon exercise of this Option have beenregistered under the Securities Act of 1933, as amended (the “Act”), or anystate acts.  Optionee understands andagrees that any shares of Common Stock purchased by Optionee pursuant to thisOption will be “restricted shares”, as such term is defined under the Act, andthat such shares must be held indefinitely unless and until subsequentlyregistered under the Act and the state acts, unless an exemption from suchregistration is available.

 

6.2.                              Unless a currentregistration statement under the Securities Act, shall be in effect withrespect to the securities to be issued upon exercise of this Option, theOptionee, by accepting this Option, covenants and agrees that, at the time ofexercise hereof, the Corporation may require the Optionee to make suchrepresentations, and may place such legends on certificates representing theshares of Common Stock issuable upon exercise of this Option, as may be reasonablyrequired in the opinion of counsel to the Corporation to permit such shares ofCommon Stock to be issued without such registration.

 

7.                                       **Transferability of Option**.   During the lifetime of the Optionee, theOption is exercisable only by the Optionee and is not assignable ortransferable.  If the Optionee dies priorto the expiration of this Option, the Option to the extent exercisable on thedate of Optionee’s death may be exercised by the personal representative of theOptionee’s estate, or by the persons to whom the Option is transferred pursuantto the Optionee’s will or in accordance with the laws of descent anddistribution.

 

8.                                       **No Employment Rights. **Nothing in this Agreement will conferupon Optionee any right to continue in the employment of the Corporation forany period or specific duration or interfere with or otherwise restrict in anyway the rights of the Corporation or of the Optionee, to terminate hisemployment as provided in the Employment Agreement.

 

9.                                       **Compliance with Laws and Regulations.**

 

9.1.                              The exercise of thisOption and the issuance of the shares of Common Stock issuable upon exercise ofthis Option shall be subject to compliance by the Corporation and Optionee withall applicable requirements of law.

 

9.2.                              The inability of the Corporationto obtain approval from any regulatory body having authority deemed by theCorporation to be necessary to the lawful issuance and sale of any shares ofCommon Stock issuable upon exercise of this Option shall

 

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relieve the Corporation of any liability with respect to thenon-issuance or sale of the shares of Common Stock issuable upon exercise ofthis Option as to which such approval shall not have been obtained.  The Corporation, however, shall use its bestefforts to obtain all such approvals.

 

9.3.                              The Corporation’sobligation to deliver shares of common stock pursuant to the exercise of thisOption is subject to the Optionee’s payment to the Corporation in cash of theamount necessary to satisfy all applicable federal, state, and local income andemployment tax withholding requirements.

 

10.                                 **Representations and Warranties by Optionee. **Optionee represents and warrants toCorporation as follows:

 

10.1.                        This Option is being acquiredby Optionee for investment only, for Optionee’s own account, and not with aview to, for offer for sale, or for sale in connection with the distribution ortransfer thereof.

 

10.2.                        This Option is not beingpurchased for subdivision or fractionalization thereof; Optionee has nocontract, undertaking, agreement or arrangement with any person or entity tosell, hypothecate, pledge, donate, or otherwise transfer (with or withoutconsideration) to any such person or entity the Option; and Optionee has nopresent plans or intentions to enter into any such contract, undertaking,agreement or arrangement.

 

11.                                 **Governing Law.**  THIS AGREEMENT SHALL BE CONSTRUED INACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF COLORADO WITHOUTREFERENCE TO ANY CONFLICTS OF LAW PROVISION THAT WOULD REQUIRE APPLICATION OFTHE LAW OF ANY OTHER JURISDICTION.  VENUEFOR ANY PROCEEDING BROUGHT TO ENFORCE THE TERMS OF THIS AGREEMENT SHALL BEPROPER ONLY IN THE STATE OR FEDERAL COURTS LOCATED IN THE CITY AND COUNTY OFDENVER, STATE OF COLORADO.

 

12.                                 **Severability.**  If any provision of this Option is determinedto be invalid or unenforceable for any reason, the remainder of the Optionshall remain in full force and effect.

 

13.                                 **Succession.**  This Option shall be binding upon theparties, their respective heirs, successors, assigns, and legalrepresentatives.

 

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IN WITNESSWHEREOF, the parties have executed this Option effective as of the day and yearfirst above written.

 

 
| **VITACUBE SYSTEMS HOLDINGS, INC.** |                         |
|-------------------------------------|------------------------------|
|                                |                         |
|                                |                         |
| By:                                 | /s/ Mary Pat O’Halloran |   |   |
|                                | Mary Pat O’Halloran,    |   |
|                                | Chief Financial Officer      |   |
|                                |                         |
| Date:                               | March 2, 2005                |   |   |
|                                |                         |
| **OPTIONEE**                        | ** **                   |
| ** **                          | ** **                   |
| ** **                          | ** **                   |
| /s/ Earnest Mathis, Jr.             |                         |   |
| Earnest Mathis, Jr.                 |                         |
|                                |                         |
| Date:                               | March 2, 2005                |   |   |
|                                     |                              |  |  |  |

 

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**Form of Exercise**

 
|       |       |                                | Date:             |
|------------|------------|-------------------------------------|-------------------------------------------------------------------------------|
|       |       |                                |                                                                          |
| To:        | ** ** | **VitaCube Systems Holdings, Inc.** |
| ** ** | ** ** | **480 S. Holly Street**             |
| ** ** | ** ** | **Denver, CO 80246**                |

# ** **

The undersigned hereby subscribes for         shares of Common Stock of VitaCube Systems Holdings, Inc. covered by this Optionand hereby makes payment of $              in payment of the purchase price therefor.

 

I understand that the Corporation’s obligation to deliver the CommonStock is subject to all applicable federal and state securities laws.  I agree to execute such additional documentsas the Corporation may reasonably request with respect to my acquisition of theCommon Stock.

 

The certificate(s) for such shares should be issued in the name of theundersigned or as otherwise indicated below:

 

 
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