Document:

exv10w7

Exhibit 10.7

PLANET BEACH FRANCHISING CORPORATION

2005 STOCK OPTION PLAN

AWARD AGREEMENT

     We are pleased to confirm that Planet Beach Franchising Corporation, a Delaware
corporation (the “Company”) has granted you an option (the “Option”) to purchase
shares of its common stock, par value $0.0001 per share (the “Shares”), subject to the
terms and conditions of the Company’s 2005 Stock Option Plan (the “Plan”) and of this Award
Agreement. Unless otherwise defined herein, all terms used in this Award Agreement shall have the
same meanings as set forth in the Plan.

     Name of Participant: PARTICIPANT’S NAME

     Date of Award:

     Exercise price per share:      $3.50

     Total number of shares:

     1. Incentive Stock Options. It is intended that all or a portion of the Option
qualify as an incentive stock option pursuant to Section 422 of the Internal Revenue Code (the
“Code”) to the extent it meets the requirements thereof. Any portion of the Option that
does not qualify as an incentive stock option shall be a nonqualified stock option.

     2. Vesting Schedule. The Option confirmed by this Award Agreement will vest
according to the following schedule, provided, however, that you must be employed by the Company on
each vesting date for that portion of the Option to vest: (i) 20 percent on the first anniversary
of the date of the award of the Options and (ii) the balance in equal monthly increments on the
last day of each of the succeeding 48 months. Notwithstanding the previous sentence, all unvested
shares will immediately vest upon a Change in Control or upon your death or Disability.

     3. Method of Exercising Option. The Option may be exercised in whole or in part by
delivery to the Company, at its offices in Marrero, Louisiana of (i) written notice identifying the
Option and stating the number of Shares with respect to which it is being exercised, (ii) payment
in full of the exercise price of the Shares then being acquired and any applicable income or
employment taxes, and (iii) execution of an Investment Representation Statement substantially in
the form reasonably required by the Company if the Company’s stock has not been registered under
the Securities Act of 1933, as amended, at the time of the exercise. The Company shall have the
right to delay the issue or delivery of any shares to be delivered hereunder until (i) the
completion of such registration or qualification of the Shares under federal, state or foreign law,
ruling or regulation as the Company shall deem to be necessary or advisable, and (ii) receipt

 

 

from the Participant of such documents and information as the Company may deem necessary or
appropriate in connection with such registration or qualification or the issuance of shares
hereunder.

     4. Expiration Date. Upon a Change of Control of the Company, any portion of this
Option that would be a parachute payment shall expire on the date that is 90 days after the date of
the Change of Control unless you agree to submit the relevant portion of the Option for approval
by more than 75% of the Company’s stockholders (determined as required by the relevant guidelines
under Section 280G of the Code). The italicized words in the preceding sentence shall have the
same meaning as in the relevant guidelines under Section 280G of the Code. Upon your death or
Disability or termination of employment, this Option shall expire in accordance with and upon the
terms and conditions as set forth in the Plan. In all other events, and notwithstanding anything
herein contained to the contrary, this Option shall expire on the tenth anniversary of the date of
the award of the Option.

     5. Resale Limitations. The Company’s Common Stock issued upon the exercise of an
Option are deemed to be restricted securities as defined in Section 144 of the Securities Act of
1933, as amended (the “Act”). Resales of Common Stock issued upon the exercise of an
Option must be in compliance with the registration requirements of the Act or an exemption from
those requirements.

     6. Antidilution Adjustments. In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split, issuance or repurchase of stock or
securities convertible into or exchangeable for shares of the Company’s common stock, grants of
options, warrants or rights to purchase the Common Stock (other than under the Plan), extraordinary
distribution with respect to the common stock, or other change in corporate structure affecting the
common stock after the date of this Award Agreement, then the Committee may (i) make such
substitutions or adjustments in the number of shares and/or the exercise price specified in
paragraph 1 above, (ii) make such other substitutions or adjustments in the consideration
receivable by the Company upon exercise of the Option, or (iii) take such other action as the
Committee may determine to be appropriate in its sole discretion; provided, however, that the
number of shares subject to the Option shall always be a whole number. This Award Agreement has
taken into account and made appropriate adjustments for the merger of Planet Beach Franchising
Corporation, a Nevada corporation, into the Company.

     7. Plan and Award Amendments. You agree that the Plan may be amended at any time,
one or more times, with the written approval of the Company and holders of two-thirds of the
Options then outstanding under the Plan, whether or not fully vested and that any such amendment
shall be binding upon you, your successors and assigns whether or not you have approved the
amendment and whether or not it supersedes any contrary provisions of this Agreement (other than
the date of award, amount and exercise price of the Option).

     8. Assignment. You may not assign or otherwise transfer this Award Agreement other
than by bequest or the laws of descent and distribution.

2

 

     9. Entire Agreement. This Award Agreement together with the Plan contains the entire
agreement of the parties and supersedes all prior and contemporaneous agreements and
understandings, oral or otherwise, among them with respect to the matters contained in this
agreement.

     By your signature and the signature of the Company’s representative below, you and the Company
agree that the Option which has been awarded to you under this Award Agreement is subject to the
terms and conditions of the Plan as from time to time amended. As provided in the Plan, you hereby
agree to accept as binding any decision of the Committee with respect to the interpretation of the
Plan and this Award Agreement, or any other matters associated therewith. In case of any conflict
between this Award Agreement and the Plan, the terms of Plan shall control. You further agree to
notify the Company as soon as possible upon any change in your residential address, as indicated
above.

     IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed as of ______,
2010.

	 	 	 	 	 
	 	PLANET BEACH FRANCHISING CORPORATION

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 

 

     The undersigned Participant hereby accepts the foregoing Option and agrees to the several
terms and conditions of this Award Agreement and of the Plan.

	 	 	 	 	 
	 	 	 
	 	  	
 	 
	 	 	PARTICIPANT’S NAME 	 
	 
	 	 	Date: ______________________	 
	 

3exv10w8

Exhibit 10.8

EMPLOYMENT AGREEMENT

          EMPLOYMENT AGREEMENT dated May 18, 2010 (the “Employment Agreement”) is made by and
between Planet Beach Franchising Corporation, a Delaware corporation (the “Company”), and
Stephen P. Smith (the “Executive”).

          WHEREAS, the Executive possesses skills, experience and knowledge that are of significant
value to the Company;

          WHEREAS, the Company and the Executive desire to enter into this Employment Agreement;

          NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valid
consideration the sufficiency of which is acknowledged, the parties hereto agree as follows:

          Section 1. Employment.

          1.1. Term. Subject to Section 3, the Company agrees to employ the Executive,
and the Executive agrees to be employed by the Company, in each case pursuant to this Employment
Agreement, for a period commencing on the Effective Date (defined in Section 6.12) and ending on
the termination of the Executive’s employment in accordance with Section 3 (the “Term”).

          1.2. Title; Duties; Place of Performance. During the Term, the Executive shall
serve as President and Chief Executive Officer of the Company and such other positions as an
officer or director of the Company and such Affiliates of the Company as the Executive and the
board or an appropriate committee thereof shall mutually agree from time to time. In such
positions, the Executive shall perform such duties, functions and responsibilities during the Term
as directed by the Board and shall operate within the guidelines, plans or policies as may be
established or approved by the Company from time to time. The Executive’s principal places of
employment during the Term shall be in the New Orleans – Metairie – Kenner metropolitan area MSA,
Louisiana, except for reasonable travel as required in connection with the business and affairs of
the Company.

          1.3. Outside Affairs. During the Term, the Executive shall devote such time,
attention, and diligence to the business and affairs of the Company as are necessary to the
satisfactory performance of his duties to the Company, and shall conform to and comply with the
lawful and reasonable directions and instructions given to him by the Board, consistent with
Section 1.1. During the Term, the Executive shall use his best efforts to promote and serve the
interests of the Company. Notwithstanding this Section, the Executive may during the Term: (i)
engage in charitable and community activities and (ii) manage personal and family investments and
affairs, in each case so long as such activities do not violate the terms of this Employment
Agreement or interfere with the satisfactory performance of his duties hereunder. In addition,
without limiting the generality of the foregoing, during the Term the Executive shall not serve on

1

 

the boards of directors of any for-profit entity without the prior consent of the Board or an
appropriate committee thereof.

          Section 2. Compensation.

          2.1. Salary. As compensation for the performance of the Executive’s services
hereunder, the Company shall pay to the Executive a salary at an initial annual rate of $259,000
per year, payable with the same frequency and on the same basis that the Company normally makes
salary payments to other executive personnel of the Company (the “Base Salary”). The
Compensation Committee of the Board (the “Compensation Committee”) shall review and
reassess the Base Salary at least annually and may elect to increase it (but not to decrease it),
subject to Section 3.2. Any resolution of the Compensation Committee changing the Base Salary
shall automatically amend and be incorporated into this Employment Agreement.

          2.2. Bonus. The Executive shall be entitled to receive an annual bonus payable to him
in accordance with any bonus award program adopted from time to time by the Compensation Committee.

          2.3. Equity. The Executive shall be eligible to participate in any equity incentive
plan that is offered to senior officers of the Company on such terms as the Compensation Committee
of the board shall determine from time to time.

          2.4. Benefits. During the Term, the Executive shall be eligible to participate in the
health insurance, retirement and other perquisites and benefits of the Company offered to senior
officers as in effect from time to time.

          2.5. Vacation and Sick Pay. The Executive will be entitled to paid vacation and sick
leave during the Term in accordance with the terms and conditions of the Company’s vacation and
sick leave policies for senior officers as in effect from time to time, but not less than four
weeks of paid vacation per year. Any earned but unused vacation shall be accrued and may be used by
Executive in any subsequent year, but in no event shall earned and unused vacation exceed six weeks
at any time, and any excess amount shall be forfeited. Upon termination of his employment for any
reason, Executive shall receive vacation pay for all earned but unused vacation, calculated at his
Base Salary rate in effect at the time of termination.

          2.6. Holidays. The Executive shall be entitled to all paid holidays given to the
Company’s senior officers in accordance with Company policy.

          2.7. Business and Entertainment Expenses. The Company shall promptly pay or reimburse
the Executive for all reasonable business out-of-pocket expenses that the Executive incurs during
the Term in performing his duties under this Employment Agreement, upon presentation of
documentation and in accordance with the expense reimbursement policy of the Company in effect from
time to time. With respect to any such payment or reimbursement that would otherwise constitute a
deferral of compensation within the meaning of Section 409A (“Section 409A”) of the
Internal Revenue Code of 1986, as amended (the “Code”), the payment or reimbursement will
be made no later than the 15th day of the third month following the later of the end of
the calendar year or the end of the Company’s fiscal year in which the expense was incurred.

2

 

          2.8. Franchise Rights. During the term of this Agreement, Executive shall not owe any
franchise fee or royalties to the Company with respect to any “Planet Beach” locations currently
operated directly or indirectly by Executive or any other business established after the date of
this Agreement by agreement of Executive and Company.

          Section 3. Employment Termination.

          3.1. Termination of Employment. The Company may terminate the Executive’s employment
(i) by reason of his Disability (defined below) (ii) for Cause (defined below), or (iii) without
Cause. The Executive may voluntarily terminate his employment (i) by reason of his Disability
(defined below), (ii) for Good Reason (defined below) or (iii) without Good Reason. In each case
(other than a termination by the Company for Cause) termination shall occur upon not less than 30
days’ notice to the other party specifying the reason therefor, if applicable to the termination.
Such notice may not be given until any other notice required by Section 3.2(a) or (b) has been
given. The Executive’s employment shall automatically and immediately terminate upon the
Executive’s death. Upon the termination of the Executive’s employment with the Company for any
reason, the Executive shall be entitled to any Base Salary earned but unpaid through the date of
termination, any earned but unpaid bonus for a year prior to the year in which the termination
occurs, any accrued but unpaid benefits, all death or disability benefits as may be applicable, all
vested benefits under retirement, profit-sharing, incentive and similar plans, any benefits such as
COBRA health benefits, that are required by law, and any unreimbursed expenses in accordance with
Section 2.7 (collectively, the “Accrued Amounts”).

          3.2. Termination by the Company Other Than For Cause; Termination by the Executive for
Good Reason. If (i) the Executive’s employment is terminated by the Company during the Term
other than for Cause or (ii) the Executive resigns for Good Reason within 30 days following the
deadline set forth in Section 3.2(a)(C) by which the Company must cure the Resignation Condition
(the “Cure Deadline”), then in addition to the Accrued Amounts the Executive shall be entitled to
the following payments and benefits: (a) an amount equal to three times the Executive’s annual
Base Salary in effect at the time of termination, (b) an amount equal to three times the maximum
bonus opportunity available to the Executive (had the Executive’s employment not terminated) under
any bonus award program in effect for the fiscal year in which termination occurs (based on the
bonus plan (if any) in effect for that year) (the payments provided for in clauses (a) and (b) are
referred to as the “Severance Payments”), (c) the continuation, on the same terms as an
active employee, of medical benefits the Executive would otherwise be eligible to receive as an
active employee of the Company for eighteen (18) months or, if earlier, until such time as the
Executive becomes eligible for substantially similar medical benefits from a subsequent employer,
and (d) full vesting of all benefits under the Company’s retirement, profit-sharing, incentive and
similar plans in which the Executive participates. The Severance Payments shall be payable in a
lump sum in immediately available funds on or before the 45th day after the termination
of the Executive’s employment; provided that the Company’s obligations to make the Severance
Payments and provide the benefits described in clauses (c) and (d) above shall be conditioned upon:
(i) the Executive’s continued compliance with his obligations under Section 4 of this Employment
Agreement and (ii) the Executive’s execution, delivery and non-revocation of a valid and
enforceable release of claims arising in connection with the Executive’s employment and termination
of employment with the Company and its Affiliates (the “Release”) substantially in the form
attached hereto as Exhibit A and the passage

3

 

of any period of time allowed the Executive by law or otherwise to revoke the Release.
Notwithstanding the preceding sentence, if payment of the Severance Payments as aforesaid would
cause the imposition of an excise tax on all or any part of the Severance Payments pursuant to
Section 409A of the Code, then payment of all or such part of the Severance Payments shall be
delayed or advanced to the earliest practicable date that avoids the imposition of such excise tax.
In the event that the Executive breaches any of the covenants set forth in Section 4, the
Executive will immediately return to the Company any portion of the Severance Payments that has
been paid to the Executive pursuant to this Section 3 and Executive’s entitlement to continued
medical benefits shall immediately cease.

	 	 	For purposes of this Employment Agreement:

     (a) “Good Reason” means (A) one of the following (each, a “Resignation
Condition”) has occurred: (i) a material breach by the Company of any of the covenants in this
Employment Agreement, including any reduction in the Executive’s Base Salary or target bonus
opportunity, other than a reduction that is part of a salary and bonus opportunity reduction
program affecting senior executives of the Company generally, (ii) the relocation of the
Executive’s principal place of employment, without the Executive’s consent, that would increase the
Executive’s one-way commute by more than 40 miles, (iii) assignment of duties or responsibilities
inappropriate for an executive officer, except as a result of the Executive’s Disability or ill
health, or (iv) the alteration of the Executive’s position in a way that significantly changes his
status, offices, reporting requirements, authority, daily routine or responsibilities, whether or
not the Executive’s title and location remain the same, which results in a material diminution in
such position; (B) the Executive has given the Company written notice of the occurrence of the
Resignation Condition within 30 days after the Resignation Condition occurred; and (C) the Company
has not cured the Resignation Condition by the date that is 30 days after receiving the notice from
the Executive required by clause (B) of this Section.

     (b) “Cause” means (i) an act of fraud by Executive; (ii) Executive’s gross
negligence or incompetence in the performance of duties assigned to him under this Agreement;
(iii) Executive’s willful violation of any material provision of this Agreement, which has
not been cured within fifteen (15) days after notice of such non-compliance has been given by the
Company to Executive; (iv) Executive’s failure or refusal (other than by reason of the
Executive’s inability, due to physical or mental illness or incapacity, to perform his duties for a
period of 90 or fewer consecutive days or 120 or fewer days in any period of 12 months) to comply
with directions by the Board or to faithfully or diligently perform services under this Agreement;
or (v) Executive’s conviction of a non-vehicular felony.

     (c) “Cured” means, with respect to a party’s conduct, that within the applicable
time period, its effect is reversed, to the extent it is capable of being reversed, and the conduct
ceases to continue; provided, however, that conduct shall be deemed to be unable to be
“cured” if such conduct has had or would have, individually or in the aggregate, a material adverse
effect on the Company and its subsidiaries, taken as a whole.

     (d) “Disability” means the Executive’s inability, due to physical or mental illness or
incapacity, to perform his duties for a period that exceeds 90 consecutive days or 120 days in any
period of 12 months.

4

 

          3.3. Exclusive Remedy. The foregoing payments upon termination of the Executive’s
employment shall constitute the exclusive payments due the Executive upon a termination of his
employment under this Employment Agreement, other than amounts due under the Asset Purchase
Agreement dated the date of this Agreement by and among Planet Beach Franchising Corporation,
Planet Beach Brands, L.L.C. and Stephen P. Smith.

          3.4. Resignation from All Positions. Upon the termination of the Executive’s
employment by the Company for Cause, the Executive shall be deemed to have resigned, as of the date
of such termination, from all positions he then holds as an officer or employee.

          3.5. Cooperation. Following the termination of the Executive’s employment with the
Company for any reason, the Executive agrees to reasonably cooperate with the Company upon
reasonable request of the Board and to be reasonably available to the Company with respect to
matters arising out of the Executive’s services to the Company and its subsidiaries. The Company
shall reimburse the Executive for expenses reasonably incurred by him in connection with such
matters as agreed by the Executive and the Board.

          3.6. Section 409A. Notwithstanding the foregoing provisions of this Employment
Agreement, if as of the date of termination of the Executive’s employment, he is a “specified
employee” within the meaning of Section 409A of the Code (as determined in accordance with the
methodology established by the Company as in effect on such date of termination), amounts or
benefits that are deferred compensation subject to Section 409A of the Code, as determined in the
reasonable discretion of the Company, that would otherwise be payable or provided during the
six-month period immediately following termination (other than the Accrued Amounts), shall instead
be paid or provided, with interest on any delayed payment at the prime lending rate prevailing at
such time, as published in the Wall Street Journal, on the first business day after the date that
is six months following Executive’s “separation from service” within the meaning of Section 409A of
the Code (or, if earlier, the Executive’s date of death).

          3.7. Golden Parachute Excise Tax Provisions. In the event it is determined that any
payment or benefit (within the meaning of Section 280G(B)(2) of the Code) to the Executive or for
his benefit paid or payable or distributed to or distributable pursuant to the terms of this
Employment Agreement or otherwise in connection with, or arising out of, his employment
(“Termination Payments”), would be subject to the excise tax imposed by Section 4999 of the Code or
any interest or penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter collectively referred to
as the “Golden Parachute Excise Tax”), then the total Termination Payments shall be reduced to the
extent the payment of such amounts would no longer cause any portion of the Executive’s total
termination benefits to constitute an “excess” parachute payment under Section 280G of the Code and
by reason of such excess parachute payment the Executive would be subject to an excise tax under
Section 4999(a) of the Code, but only if the Executive (or the Executive’s tax advisor) determines
that the after-tax value of the termination benefits calculated with the foregoing restriction
exceeds that calculated without the foregoing restriction. Except as otherwise expressly provided
herein, all determinations under this Section 3.7 shall be made at the expense of the Company by a
nationally recognized public accounting or consulting firm

5

 

selected by the Company and subject to the approval of Executive, which approval shall not be
unreasonably withheld. Such determination shall be binding upon Executive and the Company.

          3.8. Company Withholding. Notwithstanding anything contained in this Agreement to the
contrary, in the event that, according to the determination of the Executive or his advisor
pursuant to Section 3.7, a Golden Parachute Excise Tax will be imposed on any Termination Payment
or Payments, the Company shall pay to the applicable government taxing authorities as Golden
Parachute Excise Tax withholding, the amount of the Golden Parachute Excise Tax that the Company
has actually withheld from the Termination Payment or Payments.

	 	 	Section 4. Unauthorized Disclosure; Non-Solicitation; Non-Competition; Proprietary
Rights.

          4.1. Definitions. For purposes of this Agreement, the following terms shall have the
meaning ascribed to them:

               (a) “Affiliate” means the Company’s successors in interest, affiliates (as defined in
Rule 12b-2 under Section 12 of the Exchange Act), sister companies or divisions, subsidiaries,
parents, purchasers, or assignees;

               (b) “Franchisee” means a person or a business that operates a business under a
franchise contract with the Company or its Affiliates.

               (c) “Look Back Period” means the two years preceding the termination of Executive’s
employment with the Company, whatever the cause;

               (d) “Potential Franchisee” means a person or business that was given information about
becoming a Franchisee by the Company or its Affiliates during the Look Back Period and who is not a
Franchisee at the time of enforcement;

               (e) “Restricted Enterprise” means any person or entity engaged, directly or
indirectly, in (or intends or proposes to engage in, or has been organized for the purpose of
engaging in) any aspect of operations substantially similar to those engaged in by the Company or
its Franchisees during the Look Back Period;

               (f) “Restriction Period” means the period during Executive’s employment with the
Company (whether during the Term or thereafter) and the two years following the termination of
Executive’s employment with the Company, whatever the cause.

               (g) “Franchisee,” “area representative” and “master franchisor” are
refer to such persons only in their respective capacities as Franchisees, area representatives or
master franchisors of the Company, and references to the business of the Franchisees are intended
to mean only those businesses operated under agreements with the Company.

          4.2. The Company. The Company will give Executive Confidential Information, as defined
below, and the opportunity to develop goodwill with the Company’s customers and Franchisees. The
parties intend that the protective covenants in this Section 4 to be ancillary to the Company’s
promises and obligations under this Section 4.2. The parties further intend that

6

 

Company’s promises constitute a positive contract and that a court construe Company’s promises
and Executive’s obligations as creating bi-lateral obligations.

          4.3. Unauthorized Disclosure. “Confidential Information,” as defined herein, means
legally-protectable information relating to the affairs of the Company and/or its Affiliates that
is maintained as confidential by the Company, and that is not authorized for disclosure to the
public, including, without limitation: technical information, ideas, know-how, and intellectual
property; business and marketing plans and proposals; research and development; strategies;
customer and supplier lists and information; software; product, pricing and cost information;
promotions; development; financing; expansion plans; business policies and practices of the Company
and its Affiliates; and information about the business affairs of third parties (including, but not
limited to, customers and franchisees) that such third parties provide to Company in confidence.
Confidential Information includes trade secrets, but a piece of information need not qualify as a
trade secret in order to be protected. The Executive agrees that at all times during the
Executive’s employment with the Company and thereafter, the Executive shall not disclose,
communicate, or furnish to any other person any Confidential Information except for Permitted
Disclosures; or use for the Executive’s or any other person’s account any Confidential Information
except for Permitted Disclosures. Provided, however, that if a time limitation on this restriction
is required in order for it to be enforceable, then this restriction shall be limited to a period
of three (3) years following the termination of Executive’s employment (whatever the cause) for any
Confidential Information that does not qualify as a trade secret. For trade secrets, this
restriction shall extend as long as the information continues to qualify as a trade secret. Upon
termination of the Executive’s employment with the Company, the Executive shall promptly supply to
the Company all property, keys, notes, memoranda, writings, lists, files, reports, customer lists,
correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data and any other
product, material, data or document which has been produced by, received by or otherwise submitted
to the Executive during or prior to the Executive’s employment with the Company, and any copies
thereof in his possession, custody or control (whether in electronic, “hard” or other format).
“Permitted Disclosure” means the disclosure of Confidential Information that (i) is made with the
prior written consent of the Company, (ii) is required to be disclosed by law or legal process (of
which Executive shall have given as much advance written notice to the Company as is practicable
under the circumstances), or (iii) is made in the course of the Executive’s employment with the
Company, but only to the extent the Executive reasonably deems such disclosure necessary or
appropriate to perform the Executive’s responsibilities on behalf of the Company or otherwise
advance the interests of the Company.

          4.4. Non-Competition. By and in consideration of the Company’s entering into this
Employment Agreement and the payments to be made and benefits to be provided by the Company
hereunder, and in further consideration of the Company’s agreement to provide Confidential
Information and the ability to develop goodwill to the Executive (as set forth in Section 4.2), the
Executive agrees that the Executive shall not during the Restriction Period, anywhere in parishes
listed in Appendix “A” compete with the Company or its Affiliates or with any of the Franchisees or
engage in any other business similar to that of the Company or its Affiliates or of the Franchisees
during the Look Back Period, or which will probably or inevitably result in the use or disclosure
of Company’s Confidential Information to any Restricted Enterprise; provided, that in no
event shall ownership of two percent (2%) or less of the outstanding securities of any class of any
issuer whose securities are registered under the

7

 

Securities Exchange Act of 1934, as amended, standing alone, be prohibited by this Section
4.4, so long as the Executive does not have, or exercise, any rights to manage or operate the
business of such issuer other than rights generally held by all stockholders. During the
Restriction Period, upon request of the Company, the Executive shall notify the Company of the
Executive’s then-current employment status.

          4.5. Non-Solicitation of Employees. During the Restriction Period, the Executive
shall not, other than on behalf of the Company, anywhere in parishes listed in Appendix “A” solicit
or assist any person to solicit for employment or hire any person who is, or within four months
prior to the date of such solicitation or hire was, a director, officer, employee, Franchisee, area
representative or master franchisor of the Company or of its Franchisees, Affiliates, area
representatives or master franchisors, provided that this Section 4.5 shall not apply to
solicitation of a person who responds to general advertising.

          4.6. Non-Solicitation of Customers. During the Restriction Period, the Executive
shall not, on behalf of himself or any other person, anywhere in parishes listed in Appendix “A”:

          (a) Call upon any of the customers or clients of the Company, its Franchisees or its
Affiliates for the purpose of soliciting or providing any product or service that competes or could
compete with any product or service provided by the Company, its Franchisees or its Affiliates,

          (b) Divert or take away, or attempt to take away any of the customers, clients, or patrons of
the Company, its Franchisees or its Affiliates; or

          (c) Encourage any of the customers, clients, or patrons of the Company, its Franchisees or its
Affiliates to cease doing business with the Company, its Franchisees or Affiliates.

          4.7. Non-Solicitation of Franchisees and Others. During the Restriction Period, the
Executive shall not, on behalf of himself or any other person, anywhere in parishes listed in
Appendix “A”:

          (a) Call upon any of the Franchisees, Potential Franchisees, area representatives or master
franchisors of the Company or its Affiliates for the purpose of soliciting or providing any product
or service that competes or could compete with any product or service provided by the Company, its
Franchisee or its Affiliates,

          (b) Divert or take away, or attempt to take away any of the Franchisees, area representatives
or master franchisors of the Company or its Affiliates; or

          (c) Encourage any of the Franchisees, area representatives or master franchisors of the
Company or its Affiliates to cease doing business with the Company or its Affiliates.

          4.8. Existing Franchises. Notwithstanding anything in Sections 4.4, 4.5, 4.6 or 4.7,
the Executive shall not be prohibited from operating in their normal course any business owned and
operated by the Executive under franchise agreements with the Company or any of its Affiliates or
under other agreement with the Company or its Affiliates in effect as of the date of this

8

 

Employment Agreement or as expressly hereafter authorized by the Company’s board of directors.

          4.9. Remedies. The Executive agrees that any breach of the terms of this Section 4
would result in irreparable injury and damage to the Company for which the Company would have no
adequate remedy at law; the Executive therefore also agrees that in the event of said breach or any
threat of breach, the Company shall be entitled to an immediate injunction and restraining order to
prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any
and all persons acting for and/or with the Executive, without having to prove damages, in addition
to any other remedies to which the Company may be entitled at law or in equity, including, without
limitation, the obligation of the Executive to return to the Company any Severance Payments paid
pursuant to Section 3.2. No bond shall be required if an injunction is sought by Company to
enforce the restrictions in this Agreement on Executive. The terms of this Section 4.9 shall not
prevent the Company from pursuing any other available remedies for any breach or threatened breach
hereof, including, without limitation, the recovery of damages from the Executive. The Executive
and the Company further agree that the provisions of the covenants contained in this Section 4 are
reasonable and necessary to protect the businesses of the Company and its Affiliates because of the
Executive’s access to Confidential Information and his material participation in the operation of
such businesses.

          4.10. Notice and Early Resolution Conference. During the Restriction Period,
Executive will give Company written notice at least 30 days prior to going to work for a Restricted
Enterprise, will provide Company with a description of the duties and activities of the new
position, and will participate in a mediation or in-person conference if requested to do so by
Company within thirty days of such a request in order to help avoid unnecessary legal disputes.

          4.11. Resolution of Rights Regarding Confidential Information and Goodwill.
Executive has received Confidential Information and/or developed business goodwill with customers
and franchisees through, or in the course of, past association with Company or an Affiliate. The
nature and scope of restrictions, necessary to protect the parties’ interests related to these past
events, is unresolved. The parties agree that an important purpose of this Agreement is to resolve
such uncertainties and to settle such disputes and provide a set of predictable boundaries upon
which they may rely to avoid future disputes over what jobs or conduct will result in
misappropriation of Confidential Information, conversion of customer goodwill, or similar
irreparable harm. To settle and dispose of any dispute regarding these issues, Executive agrees
not to sue or otherwise pursue a legal action to avoid the agreed-upon restrictions in the
Agreement.

          4.12. Ownership of Intellectual Property. Executive further agrees Executive shall
have no ownership rights in any invention, new technique, process, work of authorship, trade
secret, discovery, or any other matter (hereafter the “Intellectual Property”) which Executive,
either individually or in conjunction with any other employees of Company or third parties, shall
invent, create, discover, author, or produce during the term of employment, both before and after
the execution of this Agreement, and any Intellectual Property will be owned by the Company.
Executive agrees that all copyrightable or patentable materials generated or developed by Executive
during the term of his employment, including, but not limited to, computer programs and
documentation, shall be considered works made for hire under the copyright and/or patent

9

 

laws of the United States and other applicable law and that all such works shall, upon
creation, be owned exclusively by Company who shall have the exclusive right to exploit, sell,
market, license and otherwise use such works. Executive hereby assigns any and all right, title
and interest, if any, in and to any Intellectual Property to the Company. Executive will, at the
Company’s expense, cooperate fully in any efforts made by the Company to obtain and perfect the
Company’s interest in the Intellectual Property, such cooperation including but not limited to
Executive’s review and execution of patent applications, copyright registrations, assignments, and
related documents. Executive also agrees to cooperate fully, at the Company’s expense, in any
litigation involving the Intellectual Property. Executive’s duty to cooperate in obtaining
protection for, and in litigation concerning, the Intellectual Property, shall continue beyond the
termination of his employment.

          Section 5. Representation. The Executive represents and warrants that (i) he is not
subject to any contract, arrangement, policy or understanding, or to any statute, governmental rule
or regulation, that in any way limits his ability to enter into and fully perform his obligations
under this Employment Agreement and (ii) he is not otherwise unable to enter into and fully perform
his obligations under this Employment Agreement.

          Section 6. Miscellaneous.

          6.1. Amendments and Waivers. This Employment Agreement and any of the provisions
hereof may be amended, waived (either generally or in a particular instance and either
retroactively or prospectively), modified or supplemented, in whole or in part, only by written
agreement signed by the parties hereto; provided, that the observance of any provision of
this Employment Agreement may be waived in writing by the party that will lose the benefit of such
provision as a result of such waiver. The waiver by any party hereto of a breach of any provision
of this Employment Agreement shall not operate or be construed as a further or continuing waiver of
such breach or as a waiver of any other or subsequent breach, except as otherwise explicitly
provided for in such waiver. Except as otherwise expressly provided herein, no failure on the part
of any party to exercise, and no delay in exercising, any right, power or remedy hereunder, or
otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power or remedy by such party preclude any
other or further exercise thereof or the exercise of any other right, power or remedy. This
Employment Agreement may be amended from time to time with the consent of the Executive, which
shall not be unreasonably withheld, as may be necessary or appropriate to avoid adverse tax
consequences to the Executive under Section 409A of the Code.

          6.2. Assignment. This Employment Agreement, and the Executive’s rights and
obligations hereunder, may not be assigned by the Executive, and any purported assignment by the
Executive in violation hereof shall be null and void. The Agreement will inure to the benefit of
Company’s Affiliates without need of any further authorization or agreement from Executive. Except
as may be expressly provided herein, nothing in this Employment Agreement shall confer upon any
person not a party to this Employment Agreement, or the legal representatives of such person, any
rights or remedies of any nature or kind whatsoever under or by reason of this Employment
Agreement.

10

 

          6.3. No Mitigation; No Offset. In the event of any termination of employment,
Executive shall be under no obligation to seek other employment; amounts due Executive under this
Agreement shall not be offset by any remuneration attributable to any subsequent employment that he
may obtain.

          6.4. Notices. Unless otherwise provided herein, all notices, requests, demands,
claims and other communications provided for under the terms of this Employment Agreement shall be
in writing. Any notice, request, demand, claim or other communication hereunder shall be sent by
(i) personal delivery (including receipted courier service) or overnight delivery service, (ii)
facsimile during normal business hours, with confirmation of receipt, to the number indicated,
(iii) reputable commercial overnight delivery service courier or (iv) registered or certified mail,
return receipt requested, postage prepaid and addressed to the intended recipient as set forth
below:

          (a) If to the Executive, to the most recent home address that the Company maintains in its
records for the Executive,

          (b) If to the Company, to:

Planet Beach Franchising Corporation

5145 Taravella Road

Marrero, LA 70072

Attention: Chief Financial Officer

Facsimile: (504) 297-1485

Telephone: (504) 361-5540

          (c) With a copy to:

Fishman Haygood Phelps

    Walmsley Willis & Swanson, L.L.P.

201 St. Charles Avenue

46th Floor

New Orleans, Louisiana 70170

Attention: Maureen Brennan Gershanik

Facsimile: (504) 310-0278

          Any party may change its facsimile number or its address to which notices, requests, demands,
claims and other communications hereunder are to be delivered by giving the other parties hereto
notice in the manner then set forth.

          6.5. Governing Law; Arbitration.

          (a) Governing Law. This Employment Agreement shall be construed and enforced in
accordance with, and the rights and obligations of the parties hereto shall be governed by, the
laws of the state of Louisiana, without giving effect to the conflicts of law principles thereof.

11

 

          (b) Arbitration. The Company and Executive agree to submit all disputes, claims, or
controversies that exist or that may arise between them, including without limitation all disputes,
claims, or controversies that may arise out of or relate to Executive’s employment with or
separation of employment from the Company, and including without limitation all claims that the
Company or any of its agents engaged in conduct prohibited on any basis under any federal, state,
or local statute, ordinance, regulation, rule of decision, or principle of common law, to
arbitration by a single arbitrator in the City of New Orleans, in accord with the employment
procedures of the Judicial Arbitration and Mediation Service in effect at the time any party
demands arbitration, or such other procedures as the parties may agree upon. Judgment upon the
arbitration award will be final, binding, and conclusive upon the parties and may be entered in any
court having jurisdiction. By this agreement, neither the Company nor Executive intends to waive
any of the substantive remedies to which they may be entitled under applicable law, but only to
specify certain procedures for the prompt resolution of all disputes, claims, or controversies.

          6.6. Severability. Whenever possible, each provision or portion of any provision of
this Employment Agreement, including those contained in Section 4 , will be interpreted in such
manner as to be effective and valid under applicable law but the invalidity or unenforceability of
any provision or portion of any provision of this Employment Agreement in any jurisdiction shall
not affect the validity or enforceability of the remainder of this Employment Agreement in that
jurisdiction or the validity or enforceability of this Employment Agreement, including that
provision or portion of any provision, in any other jurisdiction. In addition, should a court
determine that any provision or portion of any provision of this Employment Agreement, including
those contained in Section 4, is not reasonable or valid, either in period of time, geographical
area, or otherwise, the parties hereto agree that such provision should be interpreted and enforced
to the maximum extent which such court deems reasonable or valid.

          6.7. Entire Agreement. From and after the date hereof, this Employment Agreement
constitutes the entire agreement between the parties, and supersedes all prior representations,
agreements and understandings (including any prior course of dealings), both written and oral,
between the parties with respect to the subject matter hereof and thereof.

          6.8. Counterparts. This Employment Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.

          6.9. Binding Effect. This Employment Agreement shall inure to the benefit of, and be
binding on, the successors and assigns of each of the parties, including, without limitation, the
Executive’s heirs and the personal representatives of the Executive’s estate and any successor to
all or substantially all of the business and/or assets of the Company.

          6.10. General Interpretive Principles. The headings of the sections, subsections,
clauses and subclauses of this Employment Agreement are for convenience of reference only and shall
not in any way affect the meaning or interpretation of any of the provisions hereof. Words of
inclusion shall not be construed as terms of limitation herein, so that references to “include”,
“includes” and “including” shall not be limiting and shall be regarded as references to
non-exclusive and non-characterizing illustrations.

12

 

          6.11. Mutual Nondisparagement. Executive agrees that following the termination of his
employment, whatever the cause, he will not make any disparaging statements about the Company or
any statements designed to damage the reputation of the Company. The Company agrees that,
following the termination of Executive’s employment, whatever the cause, the Company’s Board of
Directors, executives and upper management will not make any disparaging statements about the
Executive or any statements designed to damage the reputation of the Executive. Notwithstanding
the foregoing, nothing in this Section 6.11 shall prohibit either party from making truthful
statements when required by order of a court or other governmental body having jurisdiction.

          6.12. Effective Date. This Employment Agreement shall be effective as of the date on
which securities of the Company are first sold under a registration statement filed with the
Securities and Exchange Commission (the “Effective Date”). If no such sale occurs before
December 31, 2010, this Employment Agreement shall be void.

13

 

          IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement as of the date
first written above.

	 	 	 	 	 	 
	 	 	PLANET BEACH FRANCHISING
CORPORATION

 	 
	/s/ Stephen P. Smith
 	 	 	 	 	 
	Stephen P. Smith 	 	 
	 
	 	 	By:  	                      /s/ Richard L. Juka
 	 
	 	 	 	Name:  	Richard L. Juka 	 
	 	 	 	Title:  	Senior Vice-President 	 
	 	 	 	 
	 	 	By:  	                      /s/ Ronald Warner
 	 
	 	 	 	Name:  	Ronald Warner 	 
	 	 	 	Title:  	Chairman of Corporate Governance, Nominating and
Compensation Committee 	 

14

 

	 	 	 	 	 

Exhibit A

WAIVER AND RELEASE OF CLAIMS

	1.	 	General Release. In consideration of the payments and benefits to be made under the
Employment Agreement dated May 18, 2010, between Planet Beach Franchising Corporation (the
“Company”) and Stephen P. Smith (the “Executive”) (the “Employment
Agreement”), the Executive, with the intention of binding the Executive and the
Executive’s heirs, executors, administrators and assigns, does hereby release, remise, acquit
and forever discharge the Company and each of its subsidiaries and affiliates (the
“Company Affiliated Group”), their present and former officers, directors, executives,
agents, shareholders, attorneys, employees and employee benefits plans (and the fiduciaries
thereof), and the successors, predecessors and assigns of each of the foregoing (collectively,
the “Company Released Parties”), of and from any and all claims, actions, causes of
action, complaints, charges, demands, rights, damages, debts, sums of money, accounts,
financial obligations, suits, expenses, attorneys’ fees and liabilities of whatever kind or
nature in law, equity or otherwise, whether accrued, absolute, contingent, unliquidated or
otherwise and whether now known, unknown, suspected or unsuspected which the Executive,
individually or as a member of a class, now has, owns or holds, or has at any time heretofore
had, owned or held, against any Company Released Party (an “Action”) arising out of or
in connection with the Executive’s service as an employee, officer and/or director to any
member of the Company Affiliated Group (or the predecessors thereof), including (i) the
termination of such service in any such capacity, (ii) for severance or vacation benefits,
unpaid wages, salary or incentive payments, (iii) for breach of contract, wrongful discharge,
impairment of economic opportunity, defamation, intentional infliction of emotional harm or
other tort and (iv) for any violation of applicable state and local labor and employment laws
(including, without limitation, all laws concerning harassment, discrimination, retaliation
and other unlawful or unfair labor and employment practices), any and all Actions based on the
Employee Retirement Income Security Act of 1974 (“ERISA”), and any and all Actions
arising under the civil rights laws of any federal, state or local jurisdiction, including,
without limitation, Title VII of the Civil Rights Act of 1964 (“Title VII”), the
Americans with Disabilities Act (“ADA”), Sections 503 and 504 of the Rehabilitation
Act, the Family and Medical Leave Act and the Age Discrimination in Employment Act
(“ADEA”), excepting only:

	 	(a)	 	rights of the Executive under this Waiver and Release of Claims
and the Employment Agreement, including, but not limited to, the Executive’s
rights to payments under Section 3 of the Employment Agreement;
	 
	 	(b)	 	rights of the Executive relating to equity and equity
compensatory awards of the Company held by the Executive as of his date of
termination;
	 
	 	(c)	 	the right of the Executive to receive COBRA continuation
coverage in accordance with applicable law and the Employment Agreement;

15

 

	 	(d)	 	rights to indemnification the Executive may have under the
by-laws or certificate of incorporation of the Company;
	 
	 	(e)	 	claims for benefits under any health, disability, retirement,
deferred compensation, life insurance or other, similar employee benefit plan
or arrangement of the Company Affiliated Group; and
	 
	 	(f)	 	claims for the reimbursement of un-reimbursed business expenses
incurred prior to the date of termination pursuant to applicable Company
policy.

	2.	 	No Admissions, Complaints or Other Claims. The Executive acknowledges and agrees
that this Waiver and Release of Claims is not to be construed in any way as an admission of
any liability whatsoever by any Company Released Party, any such liability being expressly
denied. The Executive also acknowledges and agrees that he has not, with respect to any
transaction or state of facts existing prior to the date hereof, filed any Actions against any
Company Released Party with any governmental agency, court or tribunal.
	 
	3.	 	Application to all Forms of Relief. This Waiver and Release of Claims applies to any
relief no matter how called, including, without limitation, wages, back pay, front pay,
compensatory damages, liquidated damages, punitive damages, damages for pain or suffering,
costs and attorney’s fees and expenses.
	 
	4.	 	Specific Waiver. The Executive specifically acknowledges that his acceptance of the
terms of this Waiver and Release of Claims is, among other things, a specific waiver of any
and all Actions under Title VII, ADEA, ADA and any state or local law or regulation in respect
of discrimination of any kind; provided, however, that nothing herein shall be
deemed, nor does anything herein purport, to be a waiver of any right or Action which by law
the Executive is not permitted to waive.
	 
	5.	 	Voluntariness. The Executive acknowledges and agrees that he is relying solely upon
his own judgment; that the Executive is over eighteen years of age and is legally competent to
sign this Waiver and Release of Claims; that the Executive is signing this Waiver and Release
of Claims of his own free will; that the Executive has read and understood the Waiver and
Release of Claims before signing it; and that the Executive is signing this Waiver and Release
of Claims in exchange for consideration that he believes is satisfactory and adequate. The
Executive also acknowledges and agrees that he has been informed of the right to consult with
legal counsel and has been encouraged to do so.
	 
	6.	 	Complete Agreement/Severability. This Waiver and Release of Claims constitutes the
complete and final agreement between the parties and supersedes and replaces all prior or
contemporaneous agreements, negotiations, or discussions relating to the subject matter of
this Waiver and Release of Claims. All provisions and portions of this Waiver and Release of
Claims are severable. If any provision or portion of this Waiver and Release of Claims or the
application of any provision or portion of the Waiver and Release of Claims shall be
determined to be invalid or unenforceable to any extent or for any reason, all other
provisions and portions of this Waiver and Release of Claims shall remain in full

16

 

	 	 	force and shall continue to be enforceable to the fullest and greatest extent permitted by
law.
	 
	7.	 	Acceptance and Revocability. The Executive acknowledges that he has been given a
period of 21 days within which to consider this Waiver and Release of Claims, unless
applicable law requires a longer period, in which case the Executive shall be advised of such
longer period and such longer period shall apply. The Executive may accept this Waiver and
Release of Claims at any time within this period of time by signing the Waiver and Release of
Claims and returning it to the Company. This Waiver and Release of Claims becomes effective
and enforceable on the eighth calendar day following the date of execution by Executive
(“Effective Date”). The Executive may revoke his acceptance of this Waiver and Release of
Claims at any time within seven calendar days after signing by sending written notice to the
Company. Such notice must be received by the Company within the seven calendar day period in
order to be effective and, if so received, would void this Waiver and Release of Claims for
all purposes. This Waiver and Release of Claims does not waive rights or claims under the
ADEA that may arise after the Effective Date. The Executive acknowledges that the rights and
claims waived in this Waiver and Release of Claims are in exchange for consideration over and
above anything to which Executive is already entitled.
	 
	8.	 	Governing Law. Except for issues or matters as to which federal law is applicable,
this Waiver and Release of Claims shall be governed by and construed and enforced in
accordance with the laws of the state of Louisiana without giving effect to the conflicts of
law principles thereof.

	 	 	 	 	 
	 	 	 
	 	 	 
	 	Stephen P. Smith 	 
	 	 	 

17

 

	 	 	 	 	 

APPENDIX “A”

	 	 	 	 	 	 	 

	Acadia

	 	Allen
	 	Ascension
	 	Assumption
	Avoyelles

	 	Beauregard
	 	Bienville
	 	Bossier
	Caddo

	 	Calcasieu
	 	Caldwell
	 	Cameron
	Catahoula

	 	Claiborne
	 	Concordia
	 	De Soto
	East Baton Rouge

	 	East Carroll
	 	East Feliciana
	 	Evangeline
	Franklin

	 	Grant
	 	Iberia
	 	Iberville
	Jackson

	 	Jefferson
	 	Jefferson Davis
	 	Lafayette
	Lafourche

	 	La Salle
	 	Lincoln
	 	Livingston
	Madison

	 	Morehouse
	 	Natchitoches
	 	Orleans
	Ouachita

	 	Plaquemines
	 	Pointe Coupee
	 	Rapides
	Red River

	 	Richland
	 	Sabine
	 	St. Bernard
	St. Charles

	 	St. Helena
	 	St. James
	 	St. John the Baptist
	St. Landry

	 	St. Martin
	 	St. Mary
	 	St. Tammany
	Tangipahoa

	 	Tensas
	 	Terrebonne
	 	Union
	Vermilion

	 	Vernon
	 	Washington
	 	Webster
	West Baton Rouge

	 	West Carroll
	 	West Feliciana
	 	Winn

18

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00174-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00174-of-00352.parquet"}]]