SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported) February 12, 2002
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Health & Nutrition Systems International, Inc.
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(Exact name of registrant as specified in its charter)
Florida
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(State or other jurisdiction of incorporation)
0-29245 65-0452156
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(Commission File Number) (IRS Employer Identification No.)
3750 Investment Lane, Suite 5, West Palm Beach, Florida 33407
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(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code (561) 863-8446
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N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events
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Health and Nutrition Systems International, Inc. executed a new
employment agreement with Chris Tisi, its President and Chief Executive Officer.
The agreement has a two-year term and replaces Mr. Tisi's prior agreement with
HNS which expired in January 2002. The agreement provides for a base salary of
$140,000 ($18,750 of which will be used by Mr. Tisi to pay certain amounts owing
to third parties in connection with the settlement of litigation) as well as
bonuses which are contingent upon increases in revenue over prior periods and
net income results. The agreement provides that bonuses will be determined
quarterly with 33% of such bonuses to be paid quarterly and the balance to be
paid at year-end depending on the maintenance of previously achieved performance
levels. The agreement also provides for an annual grant of 50,000 stock options
to Mr. Tisi under the Company's stock option plan. The options will have a four
year term and will vest on the date of grant. In addition, the agreement
provides for the grant to Mr. Tisi of shares of HNS common stock in lieu of
paying him accrued but unpaid compensation for the fiscal year ended 2001 in the
amount of approximately $22,500. The number of shares to be issued will be
determined based upon an average of the closing bid and asked prices of HNS
common stock over the 20 trading days preceding the date of issuance. The
agreement also provides for the payment to Mr. Tisi in the event he is
terminated after a change of control of an amount equal to the lesser of (i)
$275,000 or (ii) the maximum "golden parachute" payment permitted to be deducted
by HNS under the federal tax law. The employment agreement is filed as Exhibit
10.1 hereto and is incorporated by reference in its entirety herein. Mr. Tisi is
also serving as the interim Chairman of the Board of HNS.
In connection with the execution of the employment agreement, HNS also
executed an indemnification agreement with Mr. Tisi. The indemnification
agreement is filed as Exhibit 10.2 hereto and is incorporated by reference in
its entirety herein.
The Company also executed a severance agreement with Steve Pomerantz,
the former Chief Executive Officer of HNS. The agreement provides for a
severance payment of approximately $50,000 to be paid over the next year,
$18,750 of which will be used by Mr. Pomerantz to pay certain amounts owing to
third parties in connection with the settlement of litigation. In addition, the
agreement provides for the grant to Mr. Pomerantz of shares of HNS common stock
in lieu of paying him accrued but unpaid compensation for the fiscal year ended
2001 in the amount of approximately $20,000. The number of shares to be issued
will be determined based upon an average of the closing bid and asked prices of
HNS common stock over the 20 trading days preceding the date of issuance.
Pursuant to the terms of the agreement, Mr. Pomerantz will continue to
personally guarantee certain obligations of HNS for a limited period of time.
The severance agreement is filed as Exhibit 10.3 hereto and is incorporated by
reference in its entirety herein. Mr. Pomerantz will continue to serve on the
Board of Directors of HNS.
In connection with the execution of the severance agreement, HNS also
executed an indemnification agreement with Mr. Pomerantz. The indemnification
agreement is filed as Exhibit 10.4 hereto and is incorporated by reference in
its entirety herein.
Item 7. Financial Statements and Exhibits
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(c) Exhibits:
10.1 Employment Agreement between the Company and Christopher Tisi
effective as of January 1, 2002
10.2 Indemnification Agreement between the Company and Christopher
Tisi effective as of January 2, 2002
10.3 Severance Agreement between the Company and Steven Pomerantz
effective as of January 1, 2002
10.4 Indemnification Agreement between the Company and Steven
Pomerantz effective as of January 1, 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HEALTH & NUTRITION SYSTEMS
INTERNATIONAL, INC.
By: /s/Christopher Tisi
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Christopher Tisi, President and CEO
Dated: February 13, 2002.