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EXHIBIT 10.2
JENNY CRAIG, INC.
11355 NORTH TORREY PINES ROAD
LAJOLLA, CALIFORNIA 92037
STOCK OPTION TERMINATION AGREEMENT
Mr. C. Joseph LaBonte November 4, 1997
6150 Via Posada del Norte
P.O. Box 9488
Rancho Santa Fe, CA 92067
Dear Mr. LaBonte:
1. Reference is hereby made to the following agreements (collectively,
the "Stock Option Agreements") pursuant to which Jenny Craig, Inc. (the
"Company") granted you options to purchase shares of Common Stock of the Company
(the "Options") under the Jenny Craig, Inc.
1991 Stock Option Plan, as amended (the "Plan"):
A. Stock Option Agreement between you and the Company, dated
December 14, 1992, pursuant to which you were granted Options to purchase a
total of 5,000 shares (of which 5,000 remain unexercised as of the date hereof),
at an option price of $18.57 per share;
B. Stock Option Agreement between you and the Company, dated
December 14, 1992, pursuant to which you were granted Options to purchase a
total of 5,000 shares (of which 5,000 remain unexercised as of the date hereof),
at an option price of $18.57 per share;
C. Stock Option Agreement between you and the Company, dated
December 14, 1993, pursuant to which you were granted Options to purchase a
total of 500 shares (of which 500 remain unexercised as of the date hereof), at
an option price of $14.56 per share; and
D. Stock Option Agreement between you and the Company, dated
April 11, 1994, pursuant to which you were granted Options to purchase a total
of 1,000,000 shares (of which 999,600 remain unexercised as of the date hereof),
at an option price of $6.57 per share. The Options granted to you in the Stock
Option Agreements which have not been exercised as of the date hereof, of which
there are 1,010,100, are hereinafter referred to as the "Unexercised Options."
This letter will confirm the agreement between you and the Company to
terminate and cancel the Stock Option Agreements and the Unexercised Options.
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1. The Stock Option Agreements and the Unexercised Options are hereby
irrevocably terminated and canceled as of the date hereof, and neither the Stock
Option Agreements nor the Unexercised Options shall be of any further force or
effect.
2. In consideration of the termination and cancellation of the Stock
Option Agreements and the Unexercised Options pursuant to paragraph 1 above, the
Company shall pay you the sum of One Million Dollars ($1,000,000), which sum
shall be paid as follows:
(a) The Company shall pay you the sum of Two Hundred
Thousand Dollars ($200,000) on January 2, 1998;
(b) The Company shall pay you the sum of Two Hundred
Thousand Dollars ($200,000) on November 1, 1998;
(c) The Company shall pay you the sum of Two Hundred
Thousand Dollars ($200,000) on November 1, 1999;
(d) The Company shall pay you the sum of Two Hundred
Thousand Dollars ($200,000) on November 1, 2000; and
(e) The Company shall pay you the sum of Two Hundred
Thousand Dollars ($200,000) on November 1, 2001.
The payments referred to above are hereinafter referred to as the
"Stock Termination Payments."
3. The sums described in paragraph 2 above shall not bear any interest
and any amounts required to be withheld from the Stock Termination Payments
under federal, state or local law shall be deducted therefrom.
4. This agreement constitutes the entire agreement between you and the
Company with respect to the subject matter hereof and shall supersede all other
written or oral agreements with respect thereto. This agreement and any
provision hereof may only be amended or waived in a writing signed by the party
to be charged.
5. This agreement is binding upon and shall inure to the benefit of
each party hereto and their respective heirs, successors, assigns and
representatives.
6. This agreement shall be governed by and construed in accordance with
the laws of the State of California. Any notices hereunder shall be in writing
and sent to the parties at the addresses set forth above.
7. This agreement may be executed in counterparts, each of which shall
be deemed an original but all of which taken together shall constitute one and
the same instrument.
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Mr. C. Joseph LaBonte
November 4, 1997
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Please indicate your agreement by signing and returning the enclosed
copy of this letter.
Very truly yours,
JENNY CRAIG, INC.
/s/SIDNEY CRAIG
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By: Sidney Craig
Chairman, President and
Chief Executive Officer
Agreed:
/s/C. JOSEPH LABONTE
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C. Joseph LaBonte
Date: November 4, 1997
GUARANTY
The undersigned hereby guarantees the full and punctual payment of the
Stock Option Termination Payments.
/s/SIDNEY CRAIG
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Sidney Craig
Date: November 5, 1997