AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made as of the _15TH_ day
of __June__, 1999, by and between GALAXY FOODS COMPANY, a Delaware corporation,
hereinafter referred to as the "Company," and XXXXXX X. XXXXXX, hereinafter
referred to as the "Employee."
W I T N E S S E T H:
WHEREAS, Employee has been employed by the Company for a number of years
and is presently serving as the Chairman of the Board, President and Chief
Executive Officer of the Company;
WHEREAS, the parties entered into an Employment Agreement, dated as of
October 10, 1995 (the "Original Agreement"),with respect to the employment of
Employee as the Company's President and Chief Executive Officer;
WHEREAS, the parties desire to amend and restate the Original Agreement in
its entirety in order to better provide for the continuation of Employee's
employment on terms satisfactory to the parties.
NOW, THEREFORE, for and in consideration of the premises and the mutual
promises and conditions herein contained, the monies to be paid hereunder and
for other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties do hereby agree as follows:
1. TERM OF EMPLOYMENT. The Company hereby employs Employee and Employee
hereby accepts employment with the Company for a "rolling" period of five (5)
years commencing on the date first written above. That is, unless one of the
parties hereto expresses in writing to the other party its unwillingness to
extend this Agreement by no later than ninety (90) days prior to each
anniversary date of this Agreement, the term of this Agreement shall be
automatically extended for an additional one (1) year period. Consequently,
until either party has provided notice to the other of its unwillingness to
extend this Agreement, the term of this Agreement shall always be five (5)
years. Notwithstanding the foregoing, this Agreement may be terminated earlier
as hereinafter set forth.
2. DUTIES OF EMPLOYEE; EXCLUSIVITY. Employee is hereby hired and employed
by the Company as its Chairman of the Board, Chief Executive Officer and
President, to perform the duties and accept the responsibilities as are assigned
to him by the Company's Board of Directors. Employee shall have such powers and
duties as may from time to time be prescribed by the Board of Directors or the
Company's bylaws, provided that such powers and duties are consistent with
Employee's present powers and
duties and with Employee's position as Chairman of the Board, Chief Executive
Officer and President of the Company. Employee shall devote substantially all of
his productive time, ability and attention to the business of the Company during
the term of this Agreement. During the term of this Agreement, Employee will not
engage in any other business activity during business hours without the written
consent of the Company.
3. COMPENSATION.
(a) As compensation for services rendered under this Agreement,
Employee shall be entitled to receive from the Company a base salary of Three
Hundred Thousand Dollars ($300,000.00) per year, payable in accordance with the
normal pay-roll practices of the Company. Employee's base salary shall be
reviewed not less than annually by the Company's Board of Directors.
(b) As an incentive for Employee to increase Company net income and
shareholder value, Employee shall be entitled to receive from the Company the
following profit sharing percentages within ninety (90) days after the end of
the Company's applicable fiscal year:
COMPANY PRE-TAX NET INCOME PROFIT SHARING PERCENTAGE
$0 - 2,000,000 5%
$2,000,001 - 4,000,000 4%
above $4,000,000 3%
Company pre-tax net income (for book purposes) for each year shall be
determined by the Company's outside independent accountants. The Company shall
deduct from all profit sharing payments all applicable income tax withholding
and related taxes in accordance with the normal payroll practices of the
Company.
(c) In addition to his base salary and profit sharing, the Company may
pay Employee bonuses from time to time as determined by the Company's Board of
Directors.
4. EMPLOYEE BENEFITS.
(a) Employee shall be entitled to receive all benefits generally made
available to the senior executives of the Company.
(b) At the time this Agreement is executed, Employee shall be granted
certain options pursuant to a separate stock option agreement. Said options
shall, at the election of Employee, be granted (i) pursuant to the Company's
stock option plan for its employees and executive officers, or (ii) outside the
Company's stock option plan for its employees and executive officers. Such
options shall be granted in part, because of Employee's agreement to waive
certain rights to mandatory option grants, waive the
ability to put stock to the Company and accept a lower profit sharing percentage
than is provided in the Original Agreement.
(c) The Company will reimburse Employee for his expenses relating to
his personal financial planning, estate planning and legal fees and expenses
incurred by Employee in connection with the preparation of this Agreement.
(d) The Company will obtain, and maintain in effect during the term of
this Agreement, for the benefit of Employee (or reimburse Employee for the cost
of) (i) a Two Million Dollar ($2,000,000) term life insurance policy insuring
Employee's life, the beneficiaries of which shall be designated by Employee, and
(ii) a disability insurance policy providing for payment of at least two-thirds
(2/3) of Employee's base salary.
(e) The Company shall take all actions, and pay all expenses and fees,
necessary for Employee and his family to obtain membership privileges at
Isleworth Country Club. Such membership may be in the form of a personal
membership for Employee, or as part of a corporate membership to be acquired by
the Company, in the Company's discretion. In addition, during the term of this
Agreement, the Company shall reimburse Employee, or pay directly, any annual
dues relating to such membership.
5. VACATION. Employee shall be entitled to four (4) weeks annual vacation
at full pay in accordance with the Company's vacation and leave policies for its
senior executives in effect from time to time. Subject to such policies, the
time and duration for such vacation shall be selected by Employee at his
discretion.
6. REIMBURSEMENT OF EMPLOYEE EXPENSES. Employee shall be expected to incur
various business expenses customarily incurred by persons holding like
positions, including, but not limited to, traveling, entertainment and similar
expenses, all of which are to incurred by Employee for the benefit of the
Company. Subject to the Company's policy regarding the reimbursement of such
expenses, the Company shall promptly reimburse Employee for such expenses at
Employee's request, and Employee shall account to Company for such expenses.
7. AUTOMOBILE. Company will pay Employee's cost of a leased automobile, in
approximately the same amount as has been previously paid by the Company during
the twelve (12) months preceding the date of this Agreement, for the use of such
automobile for business purposes of the Company. The Company agrees to keep the
automobile maintained and repaired in good driving condition. The Company also
agrees to maintain insurance, at its expense, on the automobile in amounts
acceptable to the Company and Employee. A certification of insurance showing
such coverage shall be provided to Employee upon request.
8. MODIFICATION OF EXISTING NOTES. In connection with Employee's exercise
of certain rights to purchase Company common stock, Employee has previously
delivered two interest bearing promissory notes to the Company in the amounts of
$11,572,200 (the "October 1995 Note") and $1,200,000 (the "November 1994 Note),
representing the
purchase price for such common stock purchases. The October 1995 Note is secured
by certain shares of the Company's common stock owned by Employee. The parties
hereby agree that the October 1995 Note and the November 1994 Note shall be
canceled (with the Company forgiving any accrued interest thereunder) and that
the parties shall enter into a new Loan Agreement, the form of which is attached
hereto as EXHIBIT A (the "Loan Agreement"). The Loan Agreement shall provide
that Employee and the Company execute a new promissory note and stock pledge
agreement.
9. NON-DISCLOSURE OF INFORMATION CONCERNING BUSINESS; NON-INTERFERENCE.
(a) Employee will not at any time, in any fashion, form or manner,
either directly or indirectly, divulge, disclose, or communicate to any person,
firm, or corporation, or other entity or utilize for his own benefit, in any
manner whatsoever, any trade secrets or any confidential information of any
kind, nature, or description concerning any matters affecting or relating to the
business of the Company and its affiliates or their manner of operation, or
their confidential plans, processes or other data of any kind, nature or
description.
(b) All tangible confidential information and other confidential
documentation, either directly or indirectly coming into the possession of
Employee in the course of his employment, including all copies thereof or
reproductions or drawings made therefrom, shall remain the property of the
Company and shall be returned immediately upon the expiration or termination of
the term of Employee's employment. Thereafter, Employee shall not reduce to
writing or other-wise record any of the proprietary or confidential information
dis-closed to him during his employment.
(c) Employee shall not purposefully interfere with the Company's
suppliers, customers or other business relations by using the Company's internal
data in a damaging or derogatory manner that would potentially damage the
Company's relationships with such parties.
(d) The Company and Employee hereby stipulate that, as between them,
the foregoing matters are important, material, and confidential, and gravely
affect the effectiveness and successful conduct of the business of the Company,
and its goodwill, and that any breach of the terms of this Section is a material
breach of this Agreement.
(e) The obligations of Employee pursuant to this Section shall survive
any termination of Employee's employment with the Company and shall be in effect
for one (1) year following the date of termination.
10. NON-COMPETITION BY EMPLOYEE. During the term of this Agreement, and for
a period of one (1) year following the termination of this Agreement for any
reason other than pursuant to Section 13, Section 14(a) or Section 14(b),
Employee shall not, directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, stockholder (other than owning fewer than
one percent (1%) of the outstanding
shares of a public corporation), corporate officer, director, or any other
individual or representative capacity, engage or participate in any business
that directly competes with the Company within those areas in the United States
in which the Company is doing business as of the date of termination.
11. INJUNCTIVE RELIEF. It is acknowledged and agreed that, in the event the
provisions of this Agreement are breached by Employee, the extent of actual
damages sustained by the Company or its assignee will be difficult of
ascertainment, though great and irreparable, for which any remedy at law would
be inadequate. Therefore, the parties hereto expressly agree that the Company
shall have a right to seek injunctive relief for breach of any of the terms
hereof, plus damages for such breach to the maximum extent permitted by law.
12. TERMINATION BY THE COMPANY FOR CAUSE. The Company may, at its option,
without prejudice to any other remedy to which the Company may be entitled
either at law or in equity under this Agreement, terminate this Agreement by
giving written notice of termination to Employee in the event that subsequent to
the date of this Agreement:
(a) Employee is convicted of or pleads guilty to a felony crime-;
(b) Employee is found guilty of fraud, conversion, embezzlement,
falsifying records or re-ports, or a similar crime involving the Company's
property; or
(c) Employee willfully breaches this Agreement. For purposes hereof,
no act, or failure to act, on Employee's part shall be considered "willful"
unless done, or admitted to be done, by Employee in bad faith and without
reasonable belief that such action or omission was in the best interests of the
Company.
In the event Employee's termination shall be effective under this Section,
Employee shall not be en-titled to receive any further compensation or benefits
under the terms hereof.
13. TERMINATION BY THE COMPANY WITHOUT CAUSE. If the Company terminates
Employee "without cause," which shall mean for any reason other than as set
forth in Section 12, then Employee shall: (a) be paid an amount equal to his
base salary in effect at the time of termination for the following sixty (60)
month period, or the remainder of the term of this Agreement, whichever is
longer, (b) become fully "vested" under the terms of any stock option agreements
executed and delivered prior to, along with, or after this Agreement and (c) be
released from the terms of the Loan Agreement and all monies outstanding
thereunder shall be forgiven by the Company.
14. TERMINATION BY EMPLOYEE.
(a) Employee may, at his option, after complying with this Section
14(a), terminate this Agreement in the event of a material breach of the terms
of this Agreement by the Company. Employee shall be required to give written
notice to the
Company setting forth with particularity the nature of the material breach. The
Company shall have thirty (30) days following its receipt of Employee's written
notice in which to cure its breach before Employee's termination of this
Agreement shall be effective.
(b) Employee may, at his option, terminate this Agreement in the event
of a change in control of the Company. For purposes hereof, a "change in
control" of the Company means that a majority of the Company's Board of
Directors is comprised of persons for whom Employee did not vote in his capacity
as a director or a shareholder of the Company; provided, that if Employee
abstains from voting for any person as a director, such abstention shall be
deemed (for purposes of this paragraph only) to be an affirmative vote by
Employee for such person as a director.
(c) In the event Employee's termination shall be effective under
Section 14(a) or Section 14(b), Employee shall: (i) be entitled to receive his
base salary in effect at the time of termination for the following sixty (60)
month period or the remainder of the term of this Agreement, whichever is
longer, (ii) become fully "vested" under the terms of any stock option
agreements executed and delivered prior to, along with, or after this Agreement
and (iii) be released from the terms of the Loan Agreement and all monies
outstanding thereunder shall be forgiven by the Company.
(d) If Employee terminates this Agreement in any manner other than in
accordance with Section 14(a) or Section 14(b), he shall not be en-titled to
receive any further compensation or benefits under the terms hereof.
15. INDEMNIFICATION. In the event Employee at any time is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including any action by or in the right of the Company) by reason of, due to or
arising out of the fact that he is then or was previously a director, officer or
employee of the Company, or because of any action taken or omitted by Employee
in any of such capacities, the Company agrees to indemnify Employee against all
expenses (including reasonable attorney fees at all levels of proceedings),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding, provided that
Employee shall not be entitled to indemnification if a court of competent
jurisdiction in a final nonappealable decision determines that Employee acted in
bad faith or, in the case of a criminal matter, knew or should have known his
conduct was unlawful. Employee's expenses incurred in defending against any such
civil or criminal action, suit or proceeding shall be paid by the Company in
advance of the final disposition of such action, suit or proceeding upon request
of Employee and the receipt of an unsecured undertaking by Employee to repay the
amount paid by the Company if it is ultimately determined by a court in a
nonappealable decision that Employee was not entitled to indemnification
pursuant to this Section. The indemnification provisions of this Section are
non-exclusive and shall not affect other indemnification rights Employee has or
may have under Delaware law, the Articles of Incorporation of the Company, as
amended, the Company's Bylaws from time to time in effect and/or any insurance
policies covering Employee. The provisions of this Section are a material
inducement to Employee in
entering into this Agreement and shall survive the expiration or termination of
this Agreement, shall continue in effect after Employee ceases to be an officer
or a director of the Company and shall inure to the benefit of the heirs, legal
representatives and administrators of Employee. If any provision of this Section
shall for any reason be determined to be invalid, the other provisions hereof
shall not be affected and shall remain in full force and effect.
16. ATTORNEYS' FEES. In the event any litigation or controversy arises out
of or in connection with this Agreement between the parties hereto, the
prevailing party in such litigation or controversy shall be entitled to recover
from the other party or parties all reasonable attorneys' fees, expenses and
suit costs, including those associated with any appellate or post judgment
collection proceedings.
17. TIME OF ESSENCE. Time is of the essence of this Agreement and each
covenant and condition contained herein.
18. NOTICES AND DEMANDS. Any notice or demand which, by any provision of
this Agreement or any agreement, document, or instrument executed pursuant
hereto, except as otherwise provided therein, is required or provided to be
given shall be deemed to have been sufficiently given or served for all purposes
if sent by certified or registered mail, postage and charges prepaid, to the
following addresses: IF TO THE COMPANY, 0000 Xxxxxxxx Xxx, Xxxxxxx, Xxxxxxx
00000, Attention: General Counsel, or at any other address designated by the
Company to Employee in writing, and IF TO EMPLOYEE, c/o 0000 Xxxxxxxx Xxx,
Xxxxxxx, Xxxxxxx 00000, or at any other address designated by Employee to the
Company in writing.
19. SEVERABILITY. In case any covenant, condition, term or provision
contained in this Agreement shall be held to be invalid, illegal, or
unenforceable in any respect, in whole or in part, by judgment, order or decree
of any court or other judicial tribunal of competent jurisdiction, from which
judgment, order or decree no further appeal or petition for review is available,
the validity of the remaining covenants, conditions, terms and provisions
contained in this Agreement, and the validity of the remaining part of any term
or provision held to be partially in-valid, illegal or unenforceable, shall in
no way be affected, prejudiced, or disturbed thereby.
20. WAIVER OR MODIFICATION. No waiver or modification of this Agreement or
of any covenant, condition or limitation herein contained shall be valid unless
in writing and duly executed by the party to be charged therewith. Furthermore,
no evidence of any waiver or modification shall be offered or received in
evidence in any proceeding, arbitration or litigation between the parties
arising out of or affecting this Agreement, or the rights or obligations of any
party hereunder, unless such waiver or modification is in writing and duly
executed as aforesaid. The provisions of this Section may not be waived except
as herein set forth.
21. COMPLETE AGREEMENT. This Agreement constitutes the en-tire agreement of
the parties hereto with respect to the subject matter of this Agreement and
supersedes
any and all previous agreements between the parties, whether written or oral,
with respect to such subject matter.
22. APPLICABLE LAW, BINDING EFFECT AND VENUE. This Agreement shall be
construed and regulated under and by the laws of the State of Florida, and shall
inure to the benefit of and be binding upon the parties hereto and their heirs,
personal representatives, successors and assigns. Venue for any action related
to or arising out of this Agreement shall lie in Orange County, Florida.
23. SECTION AND PARAGRAPH HEADINGS. Section and paragraph headings used
throughout this Agreement are for reference and convenience and in no way
define, limit or describe the scope or intent of this Agreement or affect its
provisions.
24. MULTIPLE COPIES OR COUNTERPARTS OF AGREEMENT. The original and one or
more copies of this Agreement may be executed by one or more of the parties
hereto. In such event, all of such executed copies shall have the same force and
effect as the executed original and all of such counterparts taken together
shall have the effect of a fully executed original.
25. NUMBER AND GENDER. Whenever used herein, singular numbers shall include
the plural, the plural the singular, and the use of any gender shall include all
genders.
26. FURTHER ASSURANCES. Each of the parties hereto agree that they shall
sign such additional and supplemental documents as may be necessary to implement
the transactions contemplated pursuant to this Agreement when requested to do so
by any party to this Agreement.
Signed as of the day first written above with the intent to be legally
bound.
COMPANY:
GALAXY FOODS COMPANY,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
-----------------------------
Its: Chief Financial Officer
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EMPLOYEE:
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx
