Document:

EXHIBIT
      10.1

    

    August
      25, 2006

    

    Mr.
      _______________

    __________________

    __________________

     

    Dear
      Mark:

     

     

    This
      Letter Agreement (“Agreement”) is between you and Nutrition 21, Inc. (“Nutrition
      21” or the “Company”) regarding your position as Vice President of Nutrition 21
      reporting to the Chief Executive Officer (and, in the absence of a Chief
      Executive Officer, to the Board of Directors), and is for the period commencing
      on this date and ending on the day before the third anniversary of this
      date.

     

    
      	
              1)

            	
              GENERAL
                You agree that your employment by Nutrition 21 shall be full time
                (telecommuting shall be included as part of your commitment of full
                time
                employment) and that you shall engage in no other business or employment.
                However, you may supervise your passive investments, and you may
                act as a
                consultant, and receive therefor compensation in either cash or equity
                (as
                determined at your discretion) on activities that would not be violative
                of the non-compete provisions referred to in Section 8)
                were you personally to engage in such activities, provided that you
                do not
                devote such time to such consulting services as in the reasonable
                opinion
                of the CEO of N21 detracts significantly from the performance of
                your
                duties under this Agreement. You may serve as a non-executive director
                on
                Boards of other companies only with the written permission of the
                Nutrition 21 Board, provided that no permission shall be necessary
                for
                service as a non-executive director on the Boards of charitable
                entities.

            

    

     

    
      	
              2)

            	
              COMPENSATION
                Your direct annualized base compensation will be $225,000, and will
                be
                paid in ordinary payroll installments, subject to withholding and
                similar
                deductions. 

            

    

     

    
      	
              3)

            	
              BONUS
                AND STOCK OPTIONS 

            

    

     

    
      	 	
              a)

            	
              For
                each full fiscal year of Nutrition 21 during your employment in which
                Nutrition 21 has positive EBITDA, Nutrition 21 will pay to you a
                bonus
                equal to 0.25% (but not more than $50,000) of N21’s direct response sales
                in excess of $30 million during such fiscal year, plus 2.5% (but
                not more
                than $100,000) of direct response operating profits in excess of
                $3
                million during such fiscal year. 

            

    

     

    
      	 	
              b)

            	
              The
                following definitions apply if Nutrition 21, during the period (the
                “Option Period”) from the Closing until December 31, 2007, grants to
                similarly situated executives options to purchase in excess of 2,000,000
                shares of Nutrition 21 common stock (“Common
                Stock”):

            

    

     

    
      	 	
              i)

            	
              “All
                Options” means all options granted by Nutrition 21 during the Option
                Period to all its executives who are similarly
                situated;

            

    

     

    
      	 	
              ii)

            	
              “Excess
                Options” means the number by which All Options exceeds
                2,000,000;

            

    

     

    
      	 	
              iii)

            	
              “Your
                Similar Employee Percentage” means the percentage that during the Option
                Period your base salary is of the total of your base salary and the
                base
                salaries of executives who are similarly
                situated.

            

    

     

    
      	 	
              c)

            	
              If
                you are employed throughout the Option Period, Nutrition 21 will
                during
                the Option Period grant to you a number of options equal to Your
                Similar
                Employee Percentage of the Excess Options. Your options shall have
                the
                same vesting and other terms that apply to the Excess Options, provided
                that the exercise price of your options shall not be less per share
                than
                the closing price of a share of Common Stock on the date of
                grant.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              d)

            	
              Share
                amounts in this Section shall be appropriately adjusted to reflect
                stock
                splits, reverse stock splits, combinations and similar
                matters.

            

    

     

    
      	 	
              e)

            	
              If
                you are employed after the Option Period you will be eligible for
                additional options for this later period at the discretion of the
                Board.

            

    

     

    
      	
              4)

            	
              OTHER
                BENEFITS Coverage for group insurance, e.g., medical, dental, life
                insurance, AD&D, Short and Long Term Disability, Business Travel
                Insurance, etc. as well as the Nutrition 21 sponsored savings plan
                will be
                provided to the extent offered to similarly situated executives.
                You will
                have a $500 per month car allowance. Nutrition 21 will reimburse
                you for
                your reasonable out of pocket expenses, but not for your home, office,
                secretarial or similar or related expenses other than telephone expenses.
                You will seek prior approval of disbursements that are atypical in
                amount
                or kind.

            

    

     

    
      	
              5)

            	
              VACATION
                Annual paid vacation and holidays will accrue in accordance with
                Nutrition
                21's vacation policy and any unused vacation time shall be paid upon
                any
                termination of your employment.

            

    

     

    
      	
              6)

            	
              PERIOD
                OF EMPLOYMENT Your employment with Nutrition 21 shall be for a three
                -year
                term beginning on this date, but Nutrition 21 may terminate your
                employment For Cause or without cause as provided in Section 7, and
                you
                may terminate your employment for Good Reason as provided in Section
                7.

            

    

     

    
      	
              7)

            	
              TERMINATION

            

    

     

    
      	 	
              a)

            	
              Termination
                for Good Reason

            

    

     

    
      	 	
              i)

            	
              Your
                employment will be considered to have been terminated by you for
“Good
                Reason” if you give notice to Nutrition 21 that Nutrition 21 has breached
                any provision of this Agreement and has failed to cure the breach
                within
                30 days after the Company has received from you a notice of this
                breach
                and a demand that it be cured.

            

    

     

    
      	 	
              b)

            	
              Termination
                for Cause

            

    

     

    
      	 	
              i)

            	
              Your
                employment will be considered terminated by the Company “For Cause” if the
                Board notifies you that such termination is on account of: (i) your
                failure to perform your duties for Nutrition 21 other than any such
                failure resulting from your disability, after (A) a written demand
                for
                performance was delivered to you by the Board of Directors which
                specifically identified the manner in which the Board believes that
                you
                have not performed your duties, and (B) your failure to reasonably
                comply
                with such demand within thirty days after notice to you,(ii) your
                failure
                to perform your duties in accordance with the Company’s Standards of
                Business Conduct (iii) your engagement in conduct materially and
                demonstrably injurious to Nutrition 21, (iv) your violation of any
                provision of the Confidentiality and Non-compete Agreement incorporated
                into Section 8),
                or (v) your conviction of any felony from which all appeals have
                been
                exhausted.

            

    

     

    
      	 	
              c)

            	
              Your
                Rights after Termination

            

    

     

    
      	 	
              i)

            	
              In
                the event that you resign other than for Good Reason or if your employment
                is terminated For Cause, you shall be entitled to receive your salary
                and
                benefits accrued to the date of termination, and you shall not be
                entitled
                to any salary or benefit
                continuation.

            

    

     

    
      	 	
              ii)

            	
              In
                the event that you resign for Good Reason or Nutrition 21 terminates
                your
                employment other than For Cause, and you thereafter execute and deliver
                to
                Nutrition 21 a general release in standard form, you will receive
                a
                continuation of your base salary, in ordinary payroll installments
                and
                subject to withholding, for 12 months or, if less, for the balance
                of your
                employment term hereunder.

            

    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
              8)

            	
              There
                are incorporated herein each of the provisions of the Confidentiality
                and
                Non-Compete Agreement between the Company and you dated as of this
                date.

            

    

     

    
      	
              9)

            	
              The
                federal and state courts sitting in the State of New York shall have
                exclusive jurisdiction with respect to this Agreement. Trial by jury
                is
                waived.

            

    

     

    Any
      and
      all notices or other communications required or permitted to be given under
      any
      of the provisions of this Agreement shall be in writing and shall be deemed
      to
      have been duly given when personally delivered or when forwarded for priority
      delivery by Federal Express or other recognized courier, addressed, if to the
      Company, to it at its then principal offices, attn: President, and, if to you,
      to you at 115 East 87th
      Street -
      Apt. 18A, New York, NY 10128 (or at such other address as any party may specify
      by notice to all other parties given as aforesaid).

     

    
      	
              10)

            	
              This
                employment agreement supersedes all prior agreements and understandings
                (whether in writing, oral in board resolutions or otherwise) with
                respect
                to the subject matter of this agreement. Without limiting the generality
                of the foregoing, it sets forth all of your rights to compensation
                and
                other benefits both during your employment and thereafter. It may
                not be
                changed or terminated orally. All notices hereunder shall be in
                writing.

            

    

     

     

    If
      you
      agree with the foregoing, would you please sign and return the original of
      this
      letter to Nutrition 21. Please retain the duplicate for your
      records.

     

     

    
      
        	 	 	
                Yours
                  sincerely,

                 

                ___________________

                Paul
                  Intlekofer

                Chief
                  Executive Officer

                Nutrition
                  21, Inc.

                4
                  Manhattanville Road

                Purchase,
                  NY 10577

              

      

    

     

    
      Agreed
        to
        and accepted:

      

      ___________________

       

       

    

     

    
      
         

      

      
        3EXHIBIT
      10.2

    

    

    Confidentiality
      and Non-Compete Agreement

    

    The
      undersigned (the “Executive”) is a shareholder or an employee of ICELAND HEALTH,
      INC., a New York corporation (“Iceland Health”), and wishes to induce Nutrition
      21, Inc., a New York corporation (the “Corporation”) to acquire Iceland Health
      by merger into a subsidiary of the Corporation concurrently herewith. Iceland
      Health and the Corporation are each hereafter sometimes referred to as the
      “Company.”

    

    In
      consideration of the foregoing and the Executive’s being employed or retained to
      perform or to continue to perform services for the Company (the period of such
      employment or retention being referred to herein as the “Employment Period”),
      Executive hereby agrees as follows:

     

    1. Obligation
      of Confidentiality.

     

    1.1
      “Confidential Information” means any information and data of a confidential
      nature disclosed by the Company whether in oral, written, graphic, or
      machine-readable form, but does not include any information which (a) at the
      time of disclosure was part of the public domain; (b) after disclosure becomes
      part of the public domain by publication or otherwise, except by breach of
      this
      agreement by Executive; (c) is independently created or discovered by Executive
      at any time more than three months after the termination of the Employment
      Period; or (d) at any time after the termination of the Employment Period is
      disclosed to Executive by a third party not known to Executive to be under
      any
      confidentiality obligation to the Company.

     

    1.2
      The
      Executive hereby agrees to hold the Company’s Confidential Information in strict
      confidence and not to disclose such Confidential Information to any third
      parties nor make use of such Confidential Information for his own benefit or
      for
      the benefit of another, or for any use other than in the course of providing
      services for the Company in the course of employment, provided, however, that
      Executive is not restricted under this Section 1.2 from any dealings with,
      for
      his own benefit or otherwise, the persons listed as vendors on Schedule 9(p)(vi)
      to the Merger Agreement (other than Lysi Hf and suppliers of ingredients for
      products made or distributed by or for Iceland Health or the Company), provided
      that Executive does not breach any of the other provisions of this
      Agreement.

     

    1.3
      Upon
      the written request of Company or termination of the Executive’s relationship
      with the Company, for any reason whatsoever, the Executive shall return to
      Company and/or destroy all Confidential Information, and all copies thereof,
      properly belonging to Company, unless otherwise instructed in writing by
      Company. In addition, upon request by the Company, the Executive shall promptly
      deliver a written certification affirming that Executive has complied with
      this
      Section.

     

    1.4
      The
      obligations of confidentiality set forth in this Section 1
      shall
      bind the Executive during his employment or retention by the Company and at
      all
      times thereafter.

     

    2. Obligation
      Not To Compete

     

    2.1
      The
      term “Restricted Period” means the period beginning on the date of this
      Agreement and ending on the later of (i) the fifth anniversary of the date
      of
      this Agreement, or (ii) two years after the termination of his employment or
      retention by the Company or Executive for any reason or for no reason and
      whether or not for cause.

     

    2.1.1During
      the Restricted Period, except on behalf of the Company, Executive will not
      anywhere directly or indirectly (whether through family members or other
      affiliated parties or otherwise) be employed or retained by, provide financing
      for, or solicit, contract or offer to provide or sell or purchase or otherwise
      deal in or with (i) any product that contains fish oil or Omega 3, or (ii)
      any
      product or service similar to or in competition with any product or service
      sold
      or provided by the Company at the time of termination of his employment or
      during the twelve months immediately preceding such termination, or (iii) any
      product or service that is provided or sold by Lysi Ltd.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3. No-Hire.
      Executive covenants that at all times during the Restricted Period, Executive
      will not directly or indirectly:

     

    3.1
      solicit or hire or retain any person who was an Executive or consultant of
      the
      Company at any time during the then preceding two years, or

     

    3.2
      encourage or solicit any person to leave the employ of the Company.

     

    4. Intellectual
      Property.

     

    4.1
      All
      inventions, software, ideas, strategies, methods, trade secrets, and associated
      documentation, whether or not patentable or copyrightable, made or conceived
      solely or jointly by Executive during the Executive’s employment at Iceland
      Health prior to the date hereof or during the Employment Period, which relate
      in
      any manner to the actual or anticipated business, including research and
      development, of the Company or are suggested by Executive or result from work
      assigned to Executive or work performed by Executive (“Intellectual Property”),
      shall be the property of the Company. In addition, Executive
      agrees:

     

    
      	 	
              a.

            	
              To
                promptly and fully disclose in writing to the Company all such
                Intellectual Property;

            

    

     

    b.    
      To
      cooperate with the Company in all reasonable ways to protect the Company's
      rights therein, including the execution of papers deemed by the Company to
      be
      desirable or necessary to enable the Company to apply for, secure, and maintain
      patent or copyright protection thereon in the United States and in foreign
      countries;

     

    4.2
      To
      the extent the Company’s ownership of the Intellectual Property is ever at
      issue, Executive, on behalf of Executive and Executive’s heirs and successors in
      interest, does hereby irrevocably assign, free of any liens or encumbrances,
      all
      his worldwide rights, title and interest in and to said Intellectual Property
      to
      the Company, including, without limitation, any and all copyrights and all
      patents of said Intellectual Property, to have and to hold unto its successors
      and assigns, and this Agreement shall be proper evidence thereof.

     

    5. Remedies.
      In the
      event of breach or threatened breach by Executive of any provision of this
      Agreement, the Company shall be entitled to apply for relief by temporary
      restraining order, temporary injunction, or permanent injunction, without
      requirement of posting a bond or any other security, and to all other relief
      to
      which it may be entitled, including any and all monetary damages which the
      Company may incur as a result of said breach, violation or threatened breach
      or
      violation.

     

    6. No
      Offsets.
      The
      validity of this Agreement and the covenants thereunder shall in no way be
      affected by any valid or invalid claims or causes of action that Executive
      has
      or will have against the Company for any matter or thing, including without
      limitation, the termination by the Company of Executive’s employment without
      cause, breach by the Company of any agreement with the Company or the failure
      by
      the Company to pay any amount to the Executive.

     

    7. Miscellaneous.

     

    7.1
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York and embodies all of the understandings and obligations between
      the parties with respect to the subject matter hereof. This agreement supersedes
      all prior agreements entered into by the parties with respect to the subject
      matter hereof. In the event of any inconsistency between this Agreement and
      any
      other agreement with the Executive, this Agreement shall govern and be binding.
      This Agreement shall not be changed, modified or amended except in a writing
      signed by both parties.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    7.2
      This
      Agreement is not an employment agreement and gives no right to Executive to
      be
      retained for any period or any duration, or any other rights.

     

    7.3
      To
      the extent any provision of this Agreement is held to be unenforceable or
      invalid, the remainder of the Agreement shall be remain in full force and effect
      and the Agreement shall be interpreted to give effect to the such provision
      to
      the maximum extent permitted by law.

     

    7.4
      No
      failure or delay (in whole or in part) on the part of either party hereto to
      exercise any right or remedy hereunder will impair any such right or remedy,
      operate as a waiver thereof, or affect any right or remedy hereunder. All rights
      and remedies hereunder are cumulative and are not exclusive of any other rights
      or remedies provided hereunder or by law.

     

    7.5
      Notice. Any
      and
      all notices or other communications required or permitted to be given under
      any
      of the provisions of this Agreement shall be in writing and shall be deemed
      to
      have been duly given when personally delivered or when forwarded for priority
      delivery by Federal Express or other recognized courier, addressed, if to the
      Company, to it at its then principal offices, attn: President, and, if to the
      Executive, to him at Mark
      Stenberg, 115
      East
      87th
      Street -
      Apt. 18A, New York, NY 10128 (or at such other address as any party may specify
      by notice to all other parties given as aforesaid).

     

    7.6
      Governing
      Law; Resolution of Disputes; Service of Process. This Agreement shall in all
      respects be construed according to the laws of the State of New York. Service
      of
      process shall be effective when given in the manner provided for notices
      hereunder. The
      federal and state courts sitting in the State of New York shall have exclusive
      jurisdiction with respect to this Agreement. Trial by jury is
      waived.

     

    7.7
      Executive acknowledges receipt of this Agreement, and that his ability to earn
      a
      livelihood will not be unreasonably affected hereby. He has discussed this
      Agreement with his counsel.

     

    7.8
      This
      Agreement may be signed by facsimile and in counterparts.

    
 

    
      
        	
                NUTRITION
                  21 INC..

              	
                 

              
	
                By:
                  ___________________

                Name:
                  Paul Intlekofer

                Title:
                  Chief Executive Officer

                 

              	
                Executive
                  __________________

                Name:
                  

                 

                 

              
	
                Date:
                  August 25, 2006

              	Date: August
                25,
                2006

      

      
 

      
        
           

        

        
          3

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