Document:

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                                                                     Exhibit 4.0

                                 SYNTELLECT INC.
                            LONG-TERM INCENTIVE PLAN
                        (AS AMENDED THROUGH JUNE 1, 2000)

                  ARTICLE 1   PURPOSE

                  1.1. GENERAL. The purpose of the Syntellect Inc. Long-Term
      Incentive Plan (the "Plan") is to promote the success, and enhance the
      value, of Syntellect Inc. (the "Company") by linking the personal
      interests of its employees, consultants and advisors to those of Company
      shareholders and by providing its employees, consultants and advisors with
      an incentive for outstanding performance. The Plan is further intended to
      provide flexibility to the Company in its ability to motivate, attract,
      and retain the services of employees, consultants and advisors upon whose
      judgment, interest, and special effort the successful conduct of the
      Company's operation is largely dependent. Accordingly, the Plan permits
      the grant of incentive awards from time to time to selected employees,
      consultants and advisors of the Company and any Subsidiary.

                  ARTICLE 2   EFFECTIVE DATE

                  2.1. EFFECTIVE DATE. The Plan became effective on February 1,
      1995 (the "Effective Date"), the date the Plan was approved by the Board.
      The Plan was approved by the shareholders of the Company on May 23, 1995.

                  ARTICLE 3   DEFINITIONS AND CONSTRUCTION

                  3.1. DEFINITIONS. When a word or phrase appears in this Plan
      with the initial letter capitalized, and the word or phrase does not
      commence a sentence, the word or phrase shall generally be given the
      meaning ascribed to it in this Section or in Sections 1.1 or 2.1 unless a
      clearly different meaning is required by the context. The following words
      and phrases shall have the following meanings:

                        (a) "Award" means any Option, Stock Appreciation Right,
            Restricted Stock Award, Performance Share Award, Dividend Equivalent
            Award, or Other Stock-Based Award, or any other right or interest
            relating to Stock or cash, granted to a Participant under the Plan.

                        (b) "Award Agreement" means any written agreement,
            contract, or other instrument or document evidencing an Award.

                        (c) "Board" means the Board of Directors of the Company
            or a Committee thereof formed under Section 4, as the case may be.

                        (d) "Cause" means (except as otherwise provided in an
            Option Agreement) if the Board, in its reasonable and good faith
            discretion, determines that the employee, consultant or advisor (i)
            has developed or pursued interests substantially adverse to the
            Company, (ii) materially breached any employment, engagement or
            confidentiality agreement or otherwise failed to satisfactorily
            discharge his or her duties, (iii) has not devoted all or
            substantially all of his or her business time, effort and attention
            to the affairs of the Company (or such lesser amount as has been
            agreed to in writing by the Company), (iv) is convicted of a felony
            involving moral turpitude, or (v) has engaged in activities or
            omissions that are detrimental to the well-being of the Company.

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                        (e) "Change of Control" means and includes each of the
            following (except as otherwise provided in an Option Agreement):

                              (1) there shall be consummated any consolidation
                              or merger of the Company in which the Company is
                              not the continuing or surviving entity, or
                              pursuant to which Stock would be converted into
                              cash, securities or other property, other than a
                              merger of the Company in which the holders of the
                              Company's Stock immediately prior to the merger
                              have the same proportionate ownership of
                              beneficial interest of common stock or other
                              voting securities of the surviving entity
                              immediately after the merger;

                              (2) there shall be consummated any sale, lease,
                              exchange or other transfer (in one transaction or
                              a series of related transactions) of assets or
                              earning power aggregating more than 40% of the
                              assets or earning power of the Company and its
                              subsidiaries (taken as a whole);

                              (3) the shareholders of the Company shall approve
                              any plan or proposal for liquidation or
                              dissolution of the Company;

                              (4) any person (as such term is used in Section
                              13(d) and 14(d)(2) of the Exchange Act), other
                              than any employee benefit plan of the Company or
                              any subsidiary of the Company or any entity
                              holding shares of capital stock of the Company for
                              or pursuant to the terms of any such employee
                              benefit plan in its role as an agent or trustee
                              for such plan, shall become the beneficial owner
                              (within the meaning of Rule 13d-3 under the
                              Exchange Act) of 20% or more of the Company's
                              outstanding Stock; or

                              (5) during any period of two consecutive years,
                              individuals who at the beginning of such period
                              shall fail to constitute a majority thereof,
                              unless the election, or the nomination for
                              election by the Company's shareholders, of each
                              new director was approved by a vote of at least
                              two-thirds of the directors then still in office
                              who were directors at the beginning of the period.

                        (f) "Code" means the Internal Revenue Code of 1986, as
            amended from time to time.

                        (g)   "Committee" means the committee of the Board
            described in Article 4.

                        (h) "Disability" shall mean any illness or other
            physical or mental condition of a Participant which renders the
            Participant incapable of performing his customary and usual duties
            for the Company, or any medically determinable illness or other
            physical or mental condition resulting from a bodily injury, disease
            or mental disorder which in the judgment of the Committee is
            permanent and continuous in nature.

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            The Committee may require such medical or other evidence as it deems
            necessary to judge the nature and permanency of the Participant's
            condition.

                        (i)   "Dividend Equivalent" means a right granted to a
            Participant under Article 11.

                        (j) "Exchange Act" shall mean the Securities Exchange
            Act of 1934, as amended from time to time.

                        (k) "Fair Market Value" means with respect to Stock or
            any other property, the fair market value of such Stock or other
            property as determined by the Board in its discretion, under one of
            the following methods: (i) the average of the closing bid and asked
            prices for the Stock as reported on any national securities exchange
            on which the Stock is then listed (which shall include the NASDAQ
            National Market System) for that date or, if no prices are so
            reported for that date, such prices on the next preceding date for
            which closing bid and asked prices were reported; or (ii) the price
            as determined by such methods or procedures as may be established
            from time to time by the Board.

                        (l) "Incentive Stock Option" means an Option that is
            intended to meet the requirements of Section 422 of the Code or any
            successor provision thereto.

                        (m) "Non-Qualified Stock Option" means an Option that is
            not intended to be an Incentive Stock Option.

                        (n) "Option" means a right granted to a Participant
            under Article 7 of the Plan to purchase Stock at a specified price
            during specified time periods.

            An Option may be either an Incentive Stock Option or a Non-Qualified
      Stock Option.

                        (o) "Other Stock-Based Award" means a right, granted to
            a Participant under Article 12, that relates to or is valued by
            reference to Stock or other Awards relating to Stock.

                        (p) "Participant" means a person who, as an employee of
            or consultant or advisor to the Company or any Subsidiary, has been
            granted an Award under the Plan. A "Participant" shall not include
            any Director of the Company or any Subsidiary who is not also an
            employee of or consultant to the Company or any Subsidiary.

                        (q) "Performance Share" means a right granted to a
            Participant under Article 9, to receive cash, Stock, or other
            Awards, the payment of which is contingent upon achieving certain
            performance goals established by the Committee.

                        (r) "Plan" means the Syntellect Inc. Long-Term Incentive
            Plan, as amended from time to time.

                        (s) "Restricted Stock Award" means Stock granted to a
            Participant under Article 10 that is subject to certain restrictions
            and to risk of forfeiture.

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                        (t) "Stock" means the common stock of the Company and
            such other securities of the Company that may be substituted for
            Stock pursuant to Article 13.

                        (u) "Stock Appreciation Right" or "SAR" means a right
            granted to a Participant under Article 8 to receive a payment equal
            to the difference between the Fair Market Value of a share of Stock
            as of the date of exercise of the SAR over the grant price of the
            SAR, all as determined pursuant to Article 8.

                        (v) "Subsidiary" means any corporation, domestic or
            foreign, of which a majority of the outstanding voting stock or
            voting power is beneficially owned directly or indirectly by the
            Company.

                  ARTICLE 4   ADMINISTRATION

                  4.1. BOARD/COMMITTEE. The Plan shall be administered by the
      Board of Directors or, to the extent required to comply with Rule 16b-3
      promulgated under the Exchange Act, a Committee that is appointed by, and
      serves at the discretion of, the Board. Any Committee shall consist of at
      least two individuals who are members of the Board and are "disinterested
      persons," as such term is defined in Rule 16b-3 promulgated under Section
      16 of the Exchange Act or any successor provision, except as may be
      otherwise permitted under Section 16 of the Exchange Act and the
      regulations and rules promulgated thereunder. For purposes of this Plan,
      the "Board" shall mean the Board of Directors or the Committee, as the
      case may be.

                  4.2. ACTION BY THE BOARD. A majority of the Board shall
      constitute a quorum. The acts of a majority of the members present at any
      meeting at which a quorum is present and acts approved in writing by a
      majority of the Board in lieu of a meeting shall be deemed the acts of the
      Board. Each member of the Board is entitled to, in good faith, rely or act
      upon any report or other information furnished to that member by any
      officer or other employee of the Company or any Subsidiary, the Company's
      independent certified public accountants, or any executive compensation
      consultant or other professional retained by the Company to assist in the
      administration of the Plan.

                  4.3.  AUTHORITY OF BOARD.  The Board has the exclusive power,
      authority and discretion to:

                        (a)   Designate Participants;

                        (b) Determine the type or types of Awards to be granted
            to each Participant;

                        (c) Determine the number of Awards to be granted and the
            number of shares of Stock to which an Award will relate;

                        (d) Determine the terms and conditions of any Award
            granted under the Plan including but not limited to, the exercise
            price, grant price, or purchase price, any restrictions or
            limitations on the Award, any schedule for lapse of forfeiture
            restrictions or restrictions on the exercisability of an Award, and
            accelerations or waivers thereof, based in each case on such
            considerations as the Board in its sole discretion determines;

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                        (e) Determine whether, to what extent, and under what
            circumstances an Award may be settled in, or the exercise price of
            an Award may be paid in, cash, Stock, other Awards, or other
            property, or an Award may be canceled, forfeited, or surrendered;

                        (f)   Prescribe the form of each Award Agreement, which
            need not be identical for each Participant;

                        (g) Decide all other matters that must be determined in
            connection with an Award;

                        (h) Establish, adopt or revise any rules and regulations
            as it may deem necessary or advisable to administer the Plan; and

                        (i) Make all other decisions and determinations that may
            be required under the Plan or as the Board deems necessary or
            advisable to administer the Plan.

                  4.4. DECISIONS BINDING. The Board's interpretation of the
      Plan, any Awards granted under the Plan, any Award Agreement and all
      decisions and determinations by the Board with respect to the Plan are
      final, binding, and conclusive on all parties.

                  ARTICLE 5   SHARES SUBJECT TO THE PLAN

                  5.1. NUMBER OF SHARES. Subject to adjustment provided in
      Section 15.1, the aggregate number of shares of Stock reserved and
      available for Awards or which may be used to provide a basis of
      measurement for or to determine the value of an Award (such as with a
      Stock Appreciation Right or Performance Share Award) shall be 2,100,000.

                  5.2. LAPSED AWARDS. To the extent that an Award terminates,
      expires or lapses for any reason, any shares of Stock subject to the Award
      will again be available for the grant of an Award under the Plan and
      shares subject to SARs or other Awards settled in cash will be available
      for the grant of an Award under the Plan, in each case to the full extent
      available pursuant to the rules and interpretations of the Securities and
      Exchange Commission under Section 16 of the Exchange Act, if applicable.

                  5.3.  STOCK DISTRIBUTED.  Any Stock distributed pursuant to an
      Award may consist, in whole or in part, of authorized and unissued Stock,
      treasury Stock or Stock purchased on the open market.

                  5.4. LIMITATIONS ON AWARDS TO ANY SINGLE PARTICIPANT. There is
      no limitation that restricts the number of shares of stock which are
      subject to Awards issued to any single Participant.

                  ARTICLE 6   ELIGIBILITY

                  6.1. GENERAL. Awards may be granted only to individuals who
      are employees (including employees who also are directors or officers) of
      the Company or a Subsidiary or to consultants or advisors thereto, as
      determined by the Board.

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                  ARTICLE 7   STOCK OPTIONS

                  7.1.  GENERAL.  The Board is authorized to grant Options to
      Participants on the following terms and conditions:

                        (a)   EXERCISE PRICE.  The exercise price per share of
            Stock under an Option shall be determined by the Board.

                        (b) TIME AND CONDITIONS OF EXERCISE. The Board shall
            determine the time or times at which an Option may be exercised in
            whole or in part. The Board also shall determine the performance or
            other conditions, if any, that must be satisfied before all or part
            of an Option may be exercised.

                        (c) PAYMENT. The Board shall determine the methods by
            which the exercise price of an Option may be paid, the form of
            payment, including, without limitation, cash, shares of Stock, or
            other property (including net issuance or other "cashless exercise"
            arrangements), and the methods by which shares of Stock shall be
            delivered or deemed to be delivered to Participants. Without
            limiting the power and discretion conferred on the Board pursuant to
            the preceding sentence, the Board may, in the exercise of its
            discretion, but need not, allow a Participant to pay the Option
            price by directing the Company to withhold from the shares of Stock
            that would otherwise be issued upon exercise of the Option that
            number of shares having a Fair Market Value on the exercise date
            equal to the Option price, all as determined pursuant to rules and
            procedures established by the Board.

                        (d) EVIDENCE OF GRANT. All Options shall be evidenced by
            a written Award Agreement between the Company and the Participant.
            The Award Agreement shall include such provisions as may be
            specified by the Board.

                  7.2. INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock
      Options granted under the Plan must comply with the following additional
      rules:

                        (a) EXERCISE PRICE. The exercise price per share of
            Stock shall be set by the Board, provided that the exercise price
            for any Incentive Stock Option may not be less than the Fair Market
            Value as of the date of the grant.

                        (b)   EXERCISE.  In no event, may any Incentive Stock
            Option be exercisable for more than ten years from the date of its
            grant.

                        (c)   LAPSE OF OPTION.  An Incentive Stock Option shall
            lapse under the following circumstances:

                              (1) The Incentive Stock Option shall lapse ten
                  (10) years after it is granted, unless an earlier time is set
                  in the Award Agreement.

                              (2) The Incentive Stock Option shall lapse upon
                  termination of employment for Cause or for any other reason,
                  other than the Participant's death or Disability, unless the
                  Committee determines in its discretion to extend the

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                  exercise period for no more than ninety (90) days after the
                  Participant's termination of employment.

                              (3) In the case of the Participant's termination
                  of employment due to Disability or death, the Incentive Stock
                  Option shall lapse upon termination of employment, unless the
                  Committee determines in its discretion to extend the exercise
                  period of the Incentive Stock Option for no more than twelve
                  (12) months after the date the Participant terminates
                  employment. Upon the Participant's death, any vested and
                  otherwise exercisable Incentive Stock Options may be exercised
                  by the Participant's legal representative or representatives,
                  by the person or persons entitled to do so under the
                  Participant's last will and testament, or, if the Participant
                  shall fail to make testamentary disposition of such Incentive
                  Stock Option or shall die intestate, by the person or persons
                  entitled to receive said Incentive Stock Option under the
                  applicable laws of descent and distribution.

                        (d) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair
            Market Value (determined as of the time an Award is made) of all
            shares of Stock with respect to which Incentive Stock Options are
            first exercisable by a Participant in any calendar year may not
            exceed One Hundred Thousand Dollars ($100,000.00).

                        (e) TEN PERCENT OWNERS. An Incentive Stock Option shall
            be granted to any individual who, at the date of grant, owns stock
            possessing more than ten percent (10%) of the total combined voting
            power of all classes of Stock of the Company only if, at time such
            Option is granted, the Option price is at least one hundred ten
            percent (110%) of the Fair Market Value of the Stock and such Option
            by its terms is not exercisable after the expiration of five (5)
            years from the date the Option is granted.

                        (f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of
            an Incentive Stock Option may be made pursuant to this Plan after
            the tenth anniversary of the Effective Date.

                        (g) RIGHT TO EXERCISE. During a Participant's lifetime,
            an Incentive Stock Option may be exercised only by the Participant.

                        (h)   EMPLOYEES ONLY.  Incentive Stock Options may be
            granted only to Participants who are employees of the Company or any
            Subsidiary.

                  ARTICLE 8   STOCK APPRECIATION RIGHTS

                  8.1.  GRANT OF SARs.  The Board is authorized to grant SARs to
      Participants on the following terms and conditions:

                        (a) RIGHT TO PAYMENT. Upon the exercise of a Stock
            Appreciation Right, the Participant to whom it is granted has the
            right to receive the excess, if any, of:

                              (1) The Fair Market Value of one share of Stock on
                  the date of exercise; over

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                              (2) The grant price of the Stock Appreciation
                  Right as determined by the Board, which shall not be less than
                  the Fair Market Value of one share of Stock on the date of
                  grant in the case of any SAR related to any Incentive Stock
                  Option.

                        (b) OTHER TERMS. All awards of Stock Appreciation Rights
            shall be evidenced by an Award Agreement. The terms, methods of
            exercise, methods of settlement, form of consideration payable in
            settlement, and any other terms and conditions of any Stock
            Appreciation Right shall be determined by the Board at the time of
            the grant of the Award and shall be reflected in the Award
            Agreement.

                  ARTICLE 9   PERFORMANCE SHARES

                  9.1. GRANT OF PERFORMANCE SHARES. The Board is authorized to
      grant Performance Shares to Participants on such terms and conditions as
      may be selected by the Board. The Board shall have the complete discretion
      to determine the number of Performance Shares granted to each Participant.
      All Awards of Performance Shares shall be evidenced by an Award Agreement.

                  9.2. RIGHT TO PAYMENT. A grant of Performance Shares gives the
      Participant rights, valued as determined by the Board, and payable to, or
      exercisable by, the Participant to whom the Performance Shares are
      granted, in whole or in part, as the Board shall establish at grant or
      thereafter. The Board shall set performance goals and other terms or
      conditions to payment of the Performance Shares in its discretion which,
      depending on the extent to which they are met, will determine the number
      and value of Performance Shares that will be paid to the Participant,
      provided that the time period during which the performance goals must be
      met shall, in all cases, exceed six months.

                  9.3.  OTHER TERMS.  Performance Shares may be payable in cash,
      Stock, or other property, and have such other terms and conditions as
      determined by the Board and reflected in the Award Agreement.

                  ARTICLE 10  RESTRICTED STOCK AWARDS

                  10.1. GRANT OF RESTRICTED STOCK. The Board is authorized to
      make Awards of Restricted Stock to Participants in such amounts and
      subject to such terms and conditions as may be selected by the Board. All
      Awards of Restricted Stock shall be evidenced by a Restricted Stock Award
      Agreement.

                  10.2. ISSUANCE AND RESTRICTIONS. Restricted Stock shall be
      subject to such restrictions on transferability and other restrictions as
      the Board may impose (including, without limitation, limitations on the
      right to vote Restricted Stock or the right to receive dividends on the
      Restricted Stock). These restrictions may lapse separately or in
      combination at such times, under such circumstances, in such installments,
      or otherwise, as the Board determines at the time of the grant of the
      Award or thereafter.

                  10.3. FORFEITURE. Except as otherwise determined by the Board
      at the time of the grant of the Award or thereafter, upon termination of
      employment during the applicable restriction period, Restricted Stock that
      is at that time subject to restrictions shall be forfeited and reacquired
      by the Company, provided, however, that the Board may provide in any Award

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      Agreement that restrictions or forfeiture conditions relating to
      Restricted Stock will be waived in whole or in part in the event of
      terminations resulting from specified causes, and the Board may in other
      cases waive in whole or in part restrictions or forfeiture conditions
      relating to Restricted Stock.

                  10.4. CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock
      granted under the Plan may be evidenced in such manner as the Board shall
      determine. If certificates representing shares of Restricted Stock are
      registered in the name of the Participant, certificates must bear an
      appropriate legend referring to the terms, conditions, and restrictions
      applicable to such Restricted Stock, and the Company shall retain physical
      possession of the certificate until such time as all applicable
      restrictions lapse.

                  ARTICLE 11  DIVIDEND EQUIVALENTS

                  11.1. GRANT OF DIVIDEND EQUIVALENTS. The Board is authorized
      to grant Dividend Equivalents to Participants subject to such terms and
      conditions as may be selected by the Board. Dividend Equivalents shall
      entitle the Participant to receive payments equal to dividends with
      respect to all or a portion of the number of shares of Stock subject to an
      Option Award or SAR Award, as determined by the Board. The Board may
      provide that Dividend Equivalents be paid or distributed when accrued or
      be deemed to have been reinvested in additional shares of Stock, or
      otherwise reinvested.

                  ARTICLE 12  OTHER STOCK-BASED AWARDS

                  12.1. GRANT OF OTHER STOCK-BASED AWARDS. The Board is
      authorized, subject to limitations under applicable law, to grant to
      Participants such other Awards that are payable in, valued in whole or in
      part by reference to, or otherwise based on or related to shares of Stock,
      as deemed by the Board to be consistent with the purposes of the Plan,
      including without limitation shares of Stock awarded purely as a "bonus"
      and not subject to any restrictions or conditions, convertible or
      exchangeable debt securities, other rights convertible or exchangeable
      into shares of Stock, and Awards valued by reference to book value of
      shares of Stock or the value of securities of or the performance of
      specified Subsidiaries. The Board shall determine the terms and conditions
      of such Awards.

                  ARTICLE 13  PROVISIONS APPLICABLE TO AWARDS

                  13.1. STAND-ALONE, TANDEM, AND SUBSTITUTE AWARDS. Awards
      granted under the Plan may, in the discretion of the Board, be granted
      either alone or in addition to, in tandem with, or in substitution for,
      any other Award granted under the Plan. If an Award is granted in
      substitution for another Award, the Board may require the surrender of
      such other Award in consideration of the grant of the new Award. Awards
      granted in addition to or in tandem with other Awards may be granted
      either at the same time as or at a different time from the grant of such
      other Awards.

                  13.2. EXCHANGE PROVISIONS. The Board may at any time offer to
      exchange or buy out any previously granted Award for a payment in cash,
      Stock, or another Award (subject to Section 13.1), based on the terms and
      conditions the Board determines and communicates to the Participant at the
      time the offer is made.

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                  13.3. TERM OF AWARD. The term of each Award shall be for the
      period as determined by the Board, provided that in no event shall the
      term of any Incentive Stock Option or a Stock Appreciation Right granted
      in tandem with the Incentive Stock Option exceed a period of ten years
      from the date of its grant.

                  13.4. FORM OF PAYMENT FOR AWARDS. Subject to the terms of the
      Plan and any applicable law or Award Agreement, payments or transfers to
      be made by the Company or a Subsidiary on the grant or exercise of an
      Award may be made in such forms as the Board determines at or after the
      time of grant, including without limitation, cash, Stock, other Awards, or
      other property, or any combination, and may be made in a single payment or
      transfer, in installments, or on a deferred basis, in each case determined
      in accordance with rules adopted by, and at the discretion of, the Board.
      The Board may also authorize payment in the exercise of an Option by net
      issuance or other cashless exercise methods.

                  13.5. LIMITS ON TRANSFER. No right or interest of a
      Participant in any Award may be pledged, encumbered, or hypothecated to or
      in favor of any party other than the Company or a Subsidiary, or shall be
      subject to any lien, obligation, or liability of such Participant to any
      other party other than the Company or a Subsidiary. Except as otherwise
      provided below, no Award shall be assignable or transferable by a
      Participant other than by will or the laws of descent and distribution or,
      with the consent of the Board in its sole discretion and except in the
      case of an Incentive Stock Option, pursuant to a court order that would
      otherwise satisfy the requirements to be a domestic relations order as
      defined in Section 414(p)(1)(B) of the Code, if the order satisfies
      Section 414(p)(1)(A) of the Code notwithstanding that such an order
      relates to the transfer of a stock option rather than an interest in an
      employee benefit plan. In the Award Agreement for any Award other than an
      Award that includes an Incentive Stock Option, the Board may allow a
      Participant to assign or otherwise transfer all or a portion of the rights
      represented by the Award to specified individuals or classes of
      individuals, or to a trust benefiting such individuals or classes of
      individuals, subject to such restrictions, limitations, or conditions as
      the Board deems to be appropriate.

                  13.6. BENEFICIARIES. Notwithstanding Section 13.5, a
      Participant may, in the manner determined by the Board, designate a
      beneficiary to exercise the rights of the Participant and to receive any
      distribution with respect to any Award upon the Participant's death. A
      beneficiary, legal guardian, legal representative, or other person
      claiming any rights under the Plan is subject to all terms and conditions
      of the Plan and any Award Agreement applicable to the Participant, except
      to the extent the Plan and Award Agreement otherwise provide, and to any
      additional restrictions deemed necessary or appropriate by the Board. If
      the Participant is married and resides in a jurisdiction in which
      community property laws apply, a designation of a person other than the
      Participant's spouse as his beneficiary with respect to more than 50
      percent of the Participant's interest in the Award shall not be effective
      without the written consent of the Participant's spouse. If no beneficiary
      has been designated or survives the Participant, payment shall be made to
      the person entitled thereto under the Participant's will or the laws of
      descent and distribution. Subject to the foregoing, a beneficiary
      designation may be changed or revoked by a Participant at any time
      provided the change or revocation is filed with the Board.

                  13.7. STOCK CERTIFICATES. All Stock certificates delivered
      under the Plan are subject to any stop-transfer orders and, other
      restrictions as the Board deems necessary or advisable to comply with
      federal or state securities laws, rules and regulations and the rules of
      any national securities exchange or automated quotation system on which
      the Stock is listed,

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      quoted, or traded. The Board may place legends on any Stock certificate to
      reference restrictions applicable to the Stock.

                  13.8 TENDER OFFERS. In the event of a public tender for all or
      any portion of the Stock, or in the event that a proposal to merge,
      consolidate, or otherwise combine with another company is submitted for
      shareholder approval, the Board may in its sole discretion declare
      previously granted Options to be immediately exercisable. To the extent
      that this provision causes Incentive Stock Options to exceed the dollar
      limitation set forth in Section 7.2(d), the excess Options shall be deemed
      to be Non-Qualified Stock Options.

                  13.9. CHANGE OF CONTROL. A Change of Control shall cause every
      Option outstanding hereunder to become fully exercisable and allow each
      Participant the right to exercise an Option prior to the occurrence of the
      event otherwise terminating the Option; provided, however, that in the
      event (i) the Company's Board of Directors approves a transaction to be
      accounted for as a "pooling-of-interests" and (ii) the Company's
      independent accountants have advised the Company in writing that the
      amendment to this Section 13.9 approved by the Board of Directors on
      February 17, 1998, precludes such accounting, then, without any further
      action, such amendment to Section 13.9 shall be null and void, and Section
      13.9 shall remain in effect as existing prior to such amendment.

                  ARTICLE 14  CHANGES IN CAPITAL STRUCTURE

                  14.1. GENERAL. In the event a stock dividend is declared upon
      the Stock, the shares of Stock then subject to each Award (and the number
      of shares subject thereto) shall be increased proportionately without any
      change in the aggregate purchase price therefor. In the event the Stock
      shall be changed into or exchanged for a different number or class of
      shares of Stock or of another corporation, whether through reorganization,
      recapitalization, stock split-up, combination of shares, there shall be
      substituted for each such share of Stock then subject to each Award (and
      for each share of Stock then subject thereto) the number and class of
      shares of Stock into which each outstanding share of Stock shall be so
      exchanged, all without any change in the aggregate purchase price for the
      shares then subject to each Award.

                  ARTICLE 15  AMENDMENT, MODIFICATION AND TERMINATION

                  15.1. AMENDMENT, MODIFICATION AND TERMINATION. With the
      approval of the Board, at any time and from time to time, the Board may
      terminate, amend or modify the Plan. However, without approval of the
      shareholders of the Company or other conditions (as may be required by the
      Code, by the insider trading rules of Section 16 of the Exchange Act, by
      any national securities exchange or system on which the Stock is listed or
      reported, or by a regulatory body having jurisdiction), no such
      termination, amendment, or modification may:

                        (a) Materially increase the total number of shares of
            Stock that may be issued under the Plan, except as provided in
            Section 14.1;

                        (b)   Materially modify the eligibility requirements for
            participation in the Plan; or

                        (c)   Materially increase the benefits accruing to
            Participants under the Plan.

                                       11
<PAGE>   12

                  15.2. AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
      modification of the Plan shall adversely affect in any material way any
      Award previously granted under the Plan, without the written consent of
      the Participant.

                  ARTICLE 16  GENERAL PROVISIONS

                  16.1. NO RIGHTS TO AWARDS. No Participant or employee or
      consultant shall have any claim to be granted any Award under the Plan,
      and neither the Company nor the Board is obligated to treat Participants
      and employees or consultants uniformly.

                  16.2. NO STOCKHOLDERS RIGHTS. No Award gives the Participant
      any of the rights of a stockholder of the Company unless and until shares
      of Stock are in fact issued to such person in connection with such Award.

                  16.3. WITHHOLDING. The Company or any Subsidiary shall have
      the authority and the right to deduct or withhold, or require a
      Participant to remit to the Company, an amount sufficient to satisfy
      United States Federal, state, and local taxes (including the Participant's
      FICA obligation and any withholding obligation imposed by any country
      other than the United States in which the Participant resides) required by
      law to be withheld with respect to any taxable event arising as a result
      of this Plan. With respect to withholding required upon any taxable event
      under the Plan, Participants may elect, subject to the Board's approval,
      to satisfy the withholding requirement, in whole or in part, by having the
      Company or any Subsidiary withhold shares of Stock having a Fair Market
      Value on the date of withholding equal to the amount to be withheld for
      tax purposes in accordance with such procedures as the Board establishes.
      The Board may, at the time any Award is granted, require that any and all
      applicable tax withholding requirements be satisfied by the withholding of
      shares of Stock as set forth above.

                  16.4. NO RIGHT TO EMPLOYMENT. Nothing in the Plan or any Award
      Agreement shall interfere with or limit in any way the right of the
      Company or any Subsidiary to terminate any Participant's employment at any
      time, nor confer upon any Participant any right to continue in the employ
      of the Company or any Subsidiary.

                  16.5. UNFUNDED STATUS OF AWARDS. The Plan is intended to be an
      "unfunded" plan for incentive and deferred compensation. With respect to
      any payments not yet made to a Participant pursuant to an Award, nothing
      contained in the Plan or any Award Agreement shall give the Participant
      any rights that are greater than those of a general creditor of the
      Company or any Subsidiary.

                  16.6. INDEMNIFICATION. To the extent allowable under
      applicable law, each member of the Committee or of the Board shall be
      indemnified and held harmless by the Company from any loss, cost,
      liability, or expense that may be imposed upon or reasonably incurred by
      such member in connection with or resulting from any claim, action, suit,
      or proceeding to which he or she may be a party or in which he or she may
      be involved by reason of any action or failure to act under the Plan and
      against and from any and all amounts paid by him or her in satisfaction of
      judgment in such action, suit, or proceeding against him or her provided
      he or she gives the Company an opportunity, at its own expense, to handle
      and defend the same before he or she undertakes to handle and defend it on
      his or her own behalf. The foregoing right of indemnification shall not be
      exclusive of any other rights of indemnification to which such

                                       12
<PAGE>   13

      persons may be entitled under the Company's Articles of Incorporation or
      By-Laws, as a matter of law, or otherwise, or any power that the Company
      may have to indemnify them or hold them harmless.

                  16.7. RELATIONSHIP TO OTHER BENEFITS. No payment under the
      Plan shall be taken into account in determining any benefits under any
      pension, retirement, savings, profit sharing, group insurance, welfare or
      other benefit plan of the Company or any Subsidiary.

                  16.8. EXPENSES. The expenses of administering the Plan shall
      be borne by the Company and its Subsidiaries.

                  16.9. TITLES AND HEADINGS. The titles and headings of the
      Sections in the Plan are for convenience of reference only, and in the
      event of any conflict, the text of the Plan, rather than such titles or
      headings, shall control.

                  16.10. FRACTIONAL SHARES. No fractional shares of stock shall
      be issued and the Board shall determine, in its discretion, whether cash
      shall be given in lieu of fractional shares or whether such fractional
      shares shall be eliminated by rounding up.

                  16.11. SECURITIES LAW COMPLIANCE. With respect to any person
      who is, on the relevant date, obligated to file reports under Section 16
      of the Exchange Act, transactions under this Plan are intended to comply
      with all applicable conditions of Rule 16b-3 or its successors under the
      Exchange Act. To the extent any provision of the Plan or action by the
      Board fails to so comply, it shall be void to the extent permitted by law
      and voidable as deemed advisable by the Board, and such provision or
      action shall be deemed to be modified so as to comply with Rule 16b-3.

                  16.12. GOVERNMENT AND OTHER REGULATIONS. The obligation of the
      Company to make payment of awards in Stock or otherwise shall be subject
      to all applicable laws, rules, and regulations, and to such approvals by
      government agencies as may be required. The Company shall be under no
      obligation to register under the Securities Act of 1933, as amended, any
      of the shares of Stock paid under the Plan. If the shares paid under the
      Plan may in certain circumstances be exempt from registration under such
      act, the Company may restrict the transfer of such shares in such manner
      as it deems advisable to ensure the availability of any such exemption.

                  16.13. GOVERNING LAW. The Plan and all Award Agreements shall
      be construed in accordance with and governed by the laws of the State of
      Arizona.

                                       13EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

         Agreement dated as of the 21st day of August 2000, by and between
EDIETS.COM, INC., a Delaware corporation having its principal place of business
at 3467 W. Hillsboro Boulevard, Deerfield Beach, Florida 33442 (the
"Corporation") and DAVID J. SCHOFIELD, (the "Executive").

                              W I T N E S S E T H:

         WHEREAS, the Corporation desires to employ Executive as an executive
officer, and Executive is willing to accept such employment, all subject to the
terms and conditions set forth herein;

          NOW, THEREFORE, in consideration of the premises and of the mutual
agreements set forth herein, the parties hereto agree as follows:

         1.       EMPLOYMENT AND TERM. Subject to the terms and conditions
                  hereof, the Corporation hereby employs Executive, and
                  Executive hereby accepts employment by the Corporation, for a
                  period of three (3) years commencing on August 21, 2000, (the
                  "Commencement Date") and ending on the third anniversary of
                  the Commencement Date, unless terminated sooner pursuant to
                  the provisions hereof.

         2.       DUTIES. Executive shall serve the Corporation as its President
                  and Chief Executive Officer. Executive shall perform such
                  executive, administrative, management, marketing and other
                  services and duties as are incidental to the offices he holds
                  and as may, from time to time, be assigned to him by the Board
                  of Directors of the Corporation or a committee thereof.
                  Executive shall devote all of his business and professional
                  time to the performance of his duties hereunder. Executive
                  further agrees to serve as an officer or director of any
                  parent, subsidiary or affiliate of the Corporation upon the
                  Corporation's request, with no additional compensation beyond
                  that set forth in Paragraph 3 below. The Executive's principal
                  place of employment shall be the executive offices of the
                  Corporation in Deerfield Beach, Florida or any location less
                  than 50 miles from such location, although the Executive
                  understands and agrees that he may be required to travel from
                  time to time for business purposes.

         3.       COMPENSATION.

                  (a) As base compensation for the services to be rendered by
                  Executive hereunder, the Corporation agrees to pay to
                  Executive an annual base salary in the amount of Two Hundred
                  Fifty Thousand Dollars ($250,000), such salary to be paid in
                  equal biweekly installments for so long as Executive is
                  employed by the Corporation.

<PAGE>

                  (b) The Executive shall receive an annual bonus for each full
                  calendar year as (i) determined by the Board of Director's
                  Compensation Committee based upon the Company's growth and
                  profitability plus (ii) any additional amount, if any, to be
                  determined by Corporation's Compensation Committee in
                  recognition of the Executive's contribution to the
                  Corporation.

                  (c) The Executive shall receive an initial grant of 500,000
                  employee stock options under the Corporation's Stock Option
                  Plan (the "Plan") with an exercise price equal to the fair
                  market value of the Corporation's common stock at the
                  Commencement Date. The options, which shall be exercisable for
                  a period of five (5) years from the date of grant, shall vest
                  over three (3) years in six (6) equal semi-annual
                  installments, with the first installment vesting six (6)
                  months after the Commencement Date. Additional future options
                  may be granted in the discretion of the Corporation's
                  Compensation Committee and as part of the Plan. Unexercised
                  options shall only terminate in the event that this Agreement
                  is terminated by the Corporation pursuant to Paragraph 5(a).

                  (d) Executive shall be entitled, on a basis consistent with
                  the Corporation's policy, to reimbursement for all normal and
                  reasonable travel, entertainment and other expenses
                  necessarily incurred by him in the performance of his
                  obligations hereunder. The Corporation shall reimburse
                  Executive for such expenses upon presentation to the
                  Corporation, within a reasonable time after such expenses are
                  incurred, of an itemized account of such expenses, together
                  with such vouchers or receipts for individual expense items as
                  the Corporation may from time to time require under its
                  established policies and procedures.

                  (e) Executive shall be entitled to participate in, or benefit
                  from, in accordance with the eligibility and other provisions
                  thereof, such medical insurance, pension, retirement, or other
                  fringe benefit plans or policies as the Corporation may make
                  available to, or have in effect for, its executive personnel
                  from time to time. Plans and benefits may be modified or
                  eliminated by the Corporation from time to time as it
                  determines in its sole discretion. Executive shall also be
                  entitled to four (4) weeks of vacation annually and other
                  similar benefits in accordance with the policies of the
                  Corporation from time to time in effect for executive
                  personnel.

                  (f) Except as hereinafter provided, the Corporation shall pay
                  Executive, for any period during the term of this Agreement
                  during which he is unable fully to perform his duties because
                  of physical or mental disability or incapacity, an amount
                  equal to the compensation

<PAGE>

                  due him for such period in accordance with this Agreement,
                  less the aggregate amount of all income disability benefits
                  which for such period he may receive under or by reason of (i)
                  any applicable compulsory state disability law, (ii) the
                  Federal Social Security Act, (iii) any applicable workmen's
                  compensation law or similar law, and (iv) any plan towards
                  which the Corporation or any parent, subsidiary or affiliate
                  of the Corporation has contributed or for which it has made
                  payroll deductions, such as group accident, disability or
                  health policies.

         4.       TERMINATION ON DISABILITY OR DEATH.

                  (a) In the event that Executive, due to physical or mental
                  disability or incapacity, is unable to substantially perform
                  his duties hereunder for a period of three (3) successive
                  months, the Corporation or Executive shall then have the right
                  to terminate this Agreement and Executive's employment
                  hereunder upon thirty (30) days' prior written notice,
                  provided, however, that in the event that Executive shall
                  recommence rendering services and performing all of his duties
                  hereunder within such thirty (30) day notice period, such
                  notice shall be vitiated, and the Corporation and the
                  Executive shall no longer have the right to terminate based on
                  the disability event described in the notice. Executive's
                  employment shall terminate immediately upon his death.

                  (b) Upon termination of Executive's employment by reason of
                  his death or disability as aforesaid, Executive, or in the
                  case of Executive's death, Executive's personal
                  representatives, shall be entitled to receive base
                  compensation earned or accrued to the date of such termination
                  and not already paid, less any benefits paid to Executive by
                  reason of such disability. Such accrued base compensation
                  shall be paid to the Executive within 30 days following the
                  date of termination.

                  (c) In the event of the termination of this Agreement for any
                  reason other than death, Executive shall have the right to
                  purchase, and the Corporation shall assign to Executive, any
                  insurance policy maintained by the Company on the life of
                  Executive then in effect, for a price equal to the net cash
                  surrender value thereof at the time of such termination.

         5.       TERMINATION FOR CERTAIN CAUSES AND OTHER  REASONS.

                  (a) In the event of the (i) willful material misconduct of
                  Executive in the performance of his duties hereunder, (ii)
                  material breach of any provisions of Paragraphs 7, 8 or 9, or
                  (iii) conviction of the Executive for any felony under federal
                  or state law, this Agreement and Executive's employment
                  hereunder may be terminated by the

<PAGE>

                  Corporation without prior notice. This Agreement may also be
                  terminated by the Corporation in the event that there has been
                  a material failure of performance by Executive of his duties
                  hereunder and such failure has not been cured by Executive
                  within a period of sixty (60) days of his receipt from the
                  Corporation of a written notice of proposed termination
                  specifying the particular failure(s) of performance, upon
                  which the proposed termination willl be based, if not cured.

                  (b) The Corporation may also terminate this Agreement for any
                  reason other than the reasons set forth in Paragraph 5(a)
                  above. If the Corporation elects to terminate under this
                  Paragraph 5(b) or the Executive resigns for Good Reason (as
                  defined below) during the first six (6) months of this
                  Agreement, as a severance allowance, Executive will be
                  entitled to receive a lump sum payment of $150,000 and
                  immediate vesting of the first installment of his stock
                  options, totaling 83,333. If the Corporation elects to
                  terminate under this Paragraph 5(b) or the Executive resigns
                  for Good Reason during months seven (7) through eighteen (18)
                  of this Agreement, Executive shall receive a lump sum payment
                  of $200,000 and immediate vesting of the second, third and
                  fourth installment of options, totaling 250,000. If the
                  Corporation elects to terminate under this Paragraph 5(b) or
                  the Executive resigns for Good Reason after nineteen (19)
                  months of this Agreement, Executive shall receive a lump sum
                  payment of $250,000 and immediate vesting of the remaining
                  balance of options. Such lump sum payment shall be paid to the
                  Executive within 30 days following the date of termination.

                  For purposes of this Agreement, "Good Reason" shall mean (i)
                  an adverse and material change in the Executive's title,
                  nature of duties, employee benefits or working conditions
                  without his prior consent; (ii) any material failure by the
                  Corporation to comply with any of the provisions of this
                  Agreement that is not remedied by the Corporation promptly
                  after receipt of notice thereof given by the Executive or
                  (iii) the Corporation requiring the Executive to be based at
                  any office or location other than that described in Paragraph
                  2 hereof without the Executive's prior written consent. Good
                  Reason shall not include the occurrence of a Change of Control
                  as defined in Paragraph 6.

         6.       CHANGE OF CONTROL

                  In order to protect the Executive against the possible
                  consequences and uncertainties of a Change of Control of the
                  Corporation (as hereinafter defined) and thereby induce the
                  Executive to enter into the employ of the Corporation, the
                  Corporation agrees that:

<PAGE>

                  (a) If, during the term of this Agreement, the Executive's
                  employment is terminated by the Corporation at any time
                  subsequent to a Change of Control other than for the causes
                  set forth in Paragraph 5(a), then in such event, the
                  Corporation shall pay the Executive within thirty (30) days
                  after such termination, (i) a lump sum payment in cash in an
                  amount equal to the balance of his base salary for the
                  remaining term of the Agreement, but not less than one year of
                  said base salary and (ii) all stock options granted to the
                  Executive but not yet vested will immediately vest.

                  (b) For purposes of this Paragraph 6, in the event, following
                  a Change of Control, the Executive shall resign from his
                  employment with the Corporation within thirty (30) calendar
                  days after he has obtained actual knowledge of any adverse and
                  material change or proposed change in his title, nature of
                  duties, employee benefits or working conditions, in each
                  instance without his prior consent, such resignation shall be
                  deemed to be a termination of employment by the Corporation
                  other than for the causes set forth in Paragraph 5(a) and
                  Paragraph 6(a) shall therefore govern the corporate obligation
                  to the Executive.

                  (c) As used in this Paragraph 6, a "Change of Control" shall
                  be deemed to have occurred if after the Commencement Date (i)
                  any "person" or "group of persons" (as such terms are used in
                  Sections 13(d) and 14(d) of the Securities Exchange Act of
                  1934, as amended (the "1934 Act"), becomes the "beneficial
                  owner" (as defined in Rule 13d-3 promulgated under the 1934
                  Act), directly or indirectly, of securities of the Corporation
                  representing more than thirty-five percent (35%) of the
                  Corporation's then outstanding securities having the right to
                  vote on the election of directors; (ii) if directors
                  constituting a majority of the Board of Directors are elected
                  to the Board of Directors without the recommendation or
                  approval of the incumbent Board of Directors, except only by
                  vote of the current majority stockholder, David R. Humble; or
                  (iii) approval by the stockholders of the Corporation (or any
                  parent corporation, if any) of a reorganization, merger,
                  statutory share exchange, consolidation or similar business
                  combination, in each case with respect to which all or
                  substantially all of the individuals and entities who were the
                  beneficial owners of the outstanding securities having the
                  right to vote on the election of directors immediately prior
                  to such reorganization, merger, statutory share exchange,
                  consolidation or other similar business combination do not
                  following such reorganization, merger or consolidation,
                  beneficially own, directly or indirectly more than 50%,
                  respectively, of the then outstanding shares of common stock
                  and the combined voting power of the then outstanding voting
                  securities entitled to vote generally in the election of
                  directors, as the case may be, of the corporation resulting
                  from such reorganization, merger, statutory share exchange,
                  consolidation or

<PAGE>

                  similar business combination in substantially the same
                  proportions as their ownership, immediately prior to such
                  reorganization, merger, statutory share exchange,
                  consolidation or similar business combination of the
                  Corporation's outstanding securities having the right to vote
                  on the election of directors; or (iv) approval by the
                  stockholders of the Corporation (or any parent corporation, if
                  any) of [a] a complete liquidation or dissolution of the
                  Corporation (or any parent corporation) or [b] the sale or
                  other disposition of all or substantially all of the assets of
                  the Corporation (or any parent corporation), other than to a
                  corporation, with respect to which following such sale or
                  other disposition, more than 50% of, respectively, the then
                  outstanding shares of common stock of such corporation and the
                  combined voting power of the then outstanding voting
                  securities of such corporation entitled to vote generally in
                  the election of directors is then beneficially owned, directly
                  or indirectly, by all or substantially all of the individuals
                  and entities who were the beneficial owners, respectively, of
                  the Corporation's outstanding securities having the right to
                  vote on the election of directors immediately prior to such
                  sale or other disposition in substantially the same proportion
                  as their ownership, immediately prior to such sale or other
                  disposition, of the Corporation's outstanding securities
                  having the right to vote on the election of directors.

         7.       DISCLOSURE AND ASSIGNMENT OF DISCOVERIES.

                  (a) Executive hereby covenants and agrees to disclose promptly
                  and fully, in writing, whenever possible, to the Corporation
                  and its attorneys and designated representatives, without
                  additional compensation, all ideas, formulae, programs,
                  systems, devices, inventions, processes, business concepts,
                  discoveries, improvements, developments, works of authorship,
                  product marks and designations, technical information and
                  know-how, whether or not patentable, copyrightable or
                  otherwise protectable relating to personalized diet and
                  nutrition programs (together, the "Developments"), which he
                  may conceive, develop, reduce to practice, acquire or make,
                  alone or jointly with others:

                           (i) during the term of his employment with the
                           Corporation, whether during or outside of the usual
                           hours of work;

                           (ii) within a period of two (2) years after
                           termination of his employment with the Corporation;
                           and

                           Executive hereby agrees that all of his right, title
                           and interest in and to such Developments shall be
                           deemed as held by him in a fiduciary capacity solely
                           for the benefit of

<PAGE>

                           the Corporation, shall be the sole and exclusive
                           property of the Corporation and shall be subject to
                           the confidentiality provisions of Section 8 as
                           confidential information of the Corporation.

                  (b) Executive, when required to do so, either during or after
                  the term of his employment with the Corporation, shall:

                           (i) assign and convey to the Corporation his entire
                  right, title and interest in and to the Developments to the
                  extent not owned by the Corporation as a matter of law from
                  the time of their creation and execute, acknowledge and
                  deliver all such further instruments and documents, in form
                  and substance satisfactory to the Corporation, as it shall
                  deem reasonably necessary or advisable to evidence the vesting
                  in the Corporation of all right, title and interest of
                  Executive in and to the Developments;

                           (ii) assist the Corporation and its agents in
                  preparing patent applications, domestic and foreign, covering
                  the Developments;

                           (iii) sign and deliver all such applications and
                  assignments of the same to the Corporation; and

                           (iv) generally give all information and testimony,
                  sign all papers and do all things which may be needed or
                  requested by the Corporation to the end that the Corporation
                  may obtain, extend, reissue, maintain and enforce United
                  states and foreign patents covering the Developments.

                  (c) Executive hereby irrevocably nominates and appoints the
                  Corporation his attorney-in-fact to sign and deliver all such
                  papers, and perform all such acts mentioned in subparagraph
                  7(b), in the event of Executive's absence, unavailability, or
                  death, such nomination and appointment hereby being granted
                  with full authority in the premises, and such authority to be
                  deemed coupled with an interest vested in the Corporation.

                  (d) The Corporation agrees to bear all expenses which it
                  causes to be incurred in obtaining, extending, issuing,
                  maintaining and enforcing such patents and in investing and
                  perfecting title thereto in the Corporation, and agrees
                  further to pay Executive for any time which it may require

<PAGE>

                  of him therefor, and for any services that may be required of
                  him pursuant to subparagraph 7(b), subsequent to the
                  termination of his employment with the Corporation, such
                  payment to be at an hourly rate equivalent to that at which
                  Executive is paid at the time of the termination of his
                  employment by the Corporation.

                  (e) In the event of the unenforceability of all or part of the
                  foregoing provisions of this Paragraph 7, as determined by a
                  court of competent jurisdiction, Executive hereby transfers
                  and assigns to the Corporation such lesser interests in the
                  Developments, including, without limitations, any and all
                  United States and foreign patent rights therein and renewals
                  thereof, as may be determined by such a court to be a
                  reasonable grant of interests under the circumstances, but, in
                  any event, and without limitation, Executive shall be deemed
                  to have granted to the Corporation not less than an
                  irrevocable, non-exclusive license, with the right to
                  sublicense others, to manufacture, use, lease and sell the
                  Developments which have not been assigned to the Corporation
                  under the provisions of subparagraph 7(b), without payment of
                  any royalty.

         8.       CONFIDENTIALITY

                  (a) Executive understands and hereby acknowledges that as a
                  result of his employment with the Corporation, he will
                  necessarily become informed of, and have access to, certain
                  valuable and confidential information of the Corporation and
                  any of its subsidiaries, joint ventures and affiliates,
                  including, without limitation, inventions, trade secrets,
                  technical information, know-how, plans, specifications,
                  identity of customers and suppliers, and that such
                  information, even though it may be developed or otherwise
                  acquired by Executive, is the exclusive property of the
                  Corporation to be held by Executive in trust and solely for
                  the Corporation's benefit. Accordingly, Executive hereby
                  agrees that he shall not, at any time, either during or
                  subsequent to his employment hereunder, use, reveal, report,
                  publish, transfer or otherwise disclose to any person,
                  corporation or other entity, any of the Corporation's
                  confidential information without the prior written consent of
                  the Corporation, except to responsible officers and employees
                  of the Corporation and other responsible persons who are in a
                  contractual or fiduciary relationship with the Corporation or
                  who have a need for such information for purposes in the
                  interest of the Corporation, and except for such information
                  which legally and legitimately is or becomes of

<PAGE>

                  general public knowledge from authorized sources other than
                  Executive.

                  (b) Upon the termination of his employment with the
                  Corporation for any reason whatsoever, Executive shall
                  promptly deliver to the Corporation all drawings, manuals,
                  letters, notes, notebooks, reports and copies thereof, and all
                  other materials, including, without limitation, those of a
                  secret and confidential nature, relating to the Corporation's
                  business which are in Executive's possession or control.

         9.       NON-COMPETITION. Executive agrees that, during the term of
                  this Agreement and for a period of two (2) years after the
                  expiration or termination for any cause of his employment with
                  the Corporation, he shall not, anywhere in the United States
                  of America or elsewhere in the world (or in such smaller area
                  or for such lesser period as may be determined by a court of
                  competent jurisdiction to be a reasonable limitation on the
                  competitive activity of Executive), directly or indirectly:

                  (i)      engage in a directly competitive line of business to
                           the business carried on by the Corporation to be
                           defined as any diet and fitness business, both on-
                           and offline, either for his own account or with or
                           for anyone else;

                  (ii)     solicit or attempt to solicit business of any
                           customers of the Corporation for products or services
                           the same or similar to those offered, sold, produced
                           or under development by the Corporation;

                  (iii)    otherwise divert or attempt to divert from the
                           Corporation any business whatsoever;

                  (iv)     solicit or attempt to solicit for any business
                           endeavor any employee of the Corporation;

                  (v)      interfere with any business relationship between the
                           Corporation and any other person; or

                  (vi)     render any services as an officer, director,
                           employee, partner, consultant or otherwise to, or
                           have any interest as a stockholder, partner, lender
                           or otherwise in, any person which is so engaged.
                           Notwithstanding anything to the contrary contained in
                           this Paragraph 9, the provisions hereof shall not
                           prevent the Executive from (i) purchasing or owning
                           up to three percent (3%) of the voting

<PAGE>

                           securities of any corporation, the stock of which is
                           publicly traded or (ii) being employed by any person
                           in which services performed by the Executive are not
                           in furtherance of such person's competition with the
                           Corporation.

         10.      REMEDIES. Because the Corporation does not have an adequate
                  remedy at law to protect its business from Executive's
                  competition or to protect its interests in its trade secrets,
                  privileged, proprietary or confidential information and
                  similar commercial assets, the Corporation shall be entitled
                  to injunctive relief, in addition to such other remedies and
                  relief that would, in the event of a breach of the provisions
                  of Paragraphs 7, 8 and 9, be available to the Corporation. In
                  the event of such a breach, in addition to any other remedies,
                  the Corporation shall be entitled to receive from Executive
                  payment of, or reimbursement for, its reasonable attorneys
                  fees and disbursements incurred in successfully enforcing any
                  such provision.

         11.      ATTORNEY'S FEES. In any litigation arising out of this
                  Agreement, including appeals, the prevailing party shall be
                  entitled to recover all costs incurred, including reasonable
                  attorney's fees.

         12.      INDEMNIFICATION. The Corporation will, to the fullest extent
                  permitted by law, indemnify and hold the Executive harmless
                  from any and all liability arising from the Executive's
                  service as an employee, officer or director of the Corporation
                  and its affiliated companies in accordance with the terms of
                  the Corporation's standard Indemnification Agreement.

         13.      SURVIVAL. The provisions of Paragraphs 7, 8 and 9 shall
                  survive termination of this Agreement for any reason.

         14.      ENTIRE AGREEMENT. This Agreement sets forth the entire
                  understanding of the parties and merges and supersedes any
                  prior or contemporaneous agreements between the parties
                  pertaining to the subject matter hereof. This Agreement may
                  not be changed or terminated orally, and no change,
                  termination or attempted waiver of any of the provisions
                  hereof shall be binding unless in writing and signed by the
                  party against whom the same is sought to be enforced;
                  PROVIDED, HOWEVER, that Executive's compensation may be
                  increased at any time by the Corporation without in any way
                  affecting any of the other terms and conditions of this
                  Agreement, which in all other respects shall remain in full
                  force and effect. Failure of a party to enforce one or more of
                  the

<PAGE>

                  provisions of this Agreement or to require at any time
                  performance of any of the obligations hereof shall not be
                  construed to be a waiver of such provisions by such party nor
                  to in any way affect the validity of this Agreement of such
                  party's right thereafter to enforce any provision of this
                  Agreement, nor to preclude such party from taking any other
                  action at any time which it would legally be entitled to take.

         15.      SUCCESSORS AND ASSIGNS. Neither party shall have the right to
                  assign this personal Agreement, or any rights or obligations
                  hereunder, without the consent of the other party; PROVIDED,
                  HOWEVER, that upon the sale of all or substantially all of the
                  assets, business and goodwill of the Corporation to another
                  corporation, or upon the merger or consolidation of the
                  Corporation with another corporation, this Agreement shall
                  inure to the benefit of, and be binding upon, both Executive
                  and the corporation purchasing such assets, business and
                  goodwill, or surviving such merger or consolidation, as the
                  case may be, in the same manner and to the same extent as
                  though such other corporation were the Corporation. Subject to
                  the foregoing, this Agreement shall inure to the benefit of,
                  and bind, the parties hereto and their legal representatives,
                  heirs, successors and assigns.

         16.      ADDITIONAL ACTS. Executive and the Corporation each agrees
                  that he or it shall, as often as requested to do so, execute,
                  acknowledge and deliver and file, or cause to be executed,
                  acknowledged and delivered and filed, any and all further
                  instruments, agreements or documents as may be necessary or
                  expedient in order to consummate the transactions provided for
                  in this Agreement and do any and all further acts and things
                  as may be necessary or expedient in order to carry out the
                  purpose and intent of this Agreement.

         17.      COMMUNICATIONS. All notices, requests, demands and other
                  communications under this Agreement shall be in writing and
                  shall be deemed to have been given at the time when mailed in
                  any United States post office enclosed in a registered or
                  certified postage prepaid envelope and addressed to the
                  addresses set forth at the beginning of this Agreement, or to
                  such other address as any party may specify by notice to the
                  other party; PROVIDED, HOWEVER, that any notice of change of
                  address shall be effective only upon receipt.

         18.      CONSTRUCTION. The headings of the Paragraphs of this Agreement
                  have been inserted for convenience of reference only and shall
                  in no way restrict or otherwise affect the construction of

<PAGE>

                  the terms or provisions hereof. References in this Agreement
                  to Sections are to the sections of this Agreement.

         19.      COUNTERPARTS. This Agreement may be executed in multiple
                  counterparts, each of which shall be deemed to be an original
                  and all of which together shall be deemed to be one and the
                  same instrument.

         20.      SEVERABILITY. If any provision of this Agreement is held to be
                  invalid or unenforceable by a court or tribunal of competent
                  jurisdiction, such invalidity or unenforceability shall not
                  affect the validity and enforceability of the other provisions
                  of this Agreement and the provision held to be invalid or
                  unenforceable shall be carried out as nearly as possible
                  according to its original terms and intent to eliminate such
                  invalidity or unenforceability.

         21.      GOVERNING LAW. This Agreement is made and executed and shall
                  be governed by the laws of the State of Florida.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have duly executed this
         Agreement as of the date first set forth above.

                               CORPORATION: EDIETS.COM, INC.

                                By: /S/ David R. Humble
                                    --------------------------------------------
                                David R. Humble, Chairman

                                EXECUTIVE:

                                By: /S/ David J. Schofield
                                   ---------------------------------------------
                                David J. Schofield

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