EXHIBIT 10.1
SILVER STAR FOODS, INC.
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of this 15TH day of September,
1998 by and between SILVER STAR FOODS, INC., a New York corporation, having an
office at 0000 Xxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxx Xxxx 00000 (hereinafter referred
to as "Employer") and XXXXXXX XXXXXX, an individual residing at 0000 Xxxxxx X,
Xxxxxxxx, Xxx Xxxx 00000 (hereinafter referred to as "Employee");
W I T N E S S E T H:
WHEREAS, Employer desires to employ Employee as President; and
WHEREAS, Employee is willing to be employed as the President
in the manner provided for herein, and to perform the duties of the President
upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein set forth it is agreed as follows:
1. Employment of the President. Employer hereby employs
Employee as President.
2. Term.
a. Subject to Section 10 below and further to Section
2(b) below, the term of this Agreement shall commence upon the execution
hereof(the "Commencement Date") and expire three years from such date. Each 12
month period from the Commencement Date forward during the term hereof shall be
referred to as an "Annual Period." During the term hereof, Employee shall devote
substantially all of his business time and efforts to Employer and its
subsidiaries and affiliates.
b. Subject to Section 10 below, unless the Board of
Directors of the Company (the "Board") of Employer shall determine to the
contrary and shall so notify Employee in writing on or before the end of any
Annual Period or unless the Employee notifies Employer in writing on or before
the end of any Annual Period of his desire not to renew this Agreement, then at
the end of each Annual Period, the term of this Agreement shall be automatically
extended for one (1) additional Annual Period to be added at the end of the then
current term of this Agreement.
3. Duties. The Employee shall perform those functions
generally performed by persons of such title and position, shall attend all
meetings of the stockholders
and the Board, shall perform any and all related duties and shall have any and
all powers as may be prescribed by resolution of the Board, and shall be
available to confer and consult with and advise the officers and directors of
Employer at such times that may be required by Employer. Employee shall report
directly and solely to the Board.
4. Compensation.
a. (i) Employee shall be paid a minimum of $104,000
during the initial Annual Period. Thereafter, Employee shall receive annual
increases equal to the greater of (i) Ten (10%) percent or (ii) the cost of
living adjustment recognized in the area where the Employee resides. Employee
shall be paid periodically in accordance with the policies of the Employer
during the term of this Agreement, but not less than monthly.
(ii) Employee is eligible for an annual bonus, if
any, which will be determined and paid in accordance with policies set from time
to time by the Board.
b. Employer shall include Employee in its health
insurance program available to Employer's executive officers and shall pay 100%
of the premiums for such program.
c. Employee shall have the right to participate in
any other employee benefit plans established by Employer.
d. Employee shall receive from Employer Options to
purchase up to _______ shares of Employer's common stock, exercisable at the
fair market price of Employer's common stock as listed on Nasdaq SmallCap at the
close of business on the day immediately preceding the date of the option
agreement. The terms of the option agreement will include, in part, that (i) if
Employee's employment is terminated for any reason other than cause (as
discussed in Section 9(a)(i)), the options will vest immediately and will be
exercisable for one year from the date of termination, (ii) if, within one year
of the date of the option agreement, the market price of Employer's common stock
falls below the exercise price in the option agreement, Employer will amend the
terms of the option agreement to lower the exercise price to the lower market
price, and (iii) upon written request of Employee, Employer agrees to use its
best efforts to file with the Securities and Exchange Commission, on or before
the first date on which any of said options become exercisable, a registration
statement on Form S-8 (or any replacement therefor) to register under the
Securities Act of 1933, as amended, all shares of Employer's common stock
underlying said options, including those not yet exercisable.
5. Expenses. Employee shall submit to Employer reasonably
detailed receipts with respect thereto which substantiate the expenses. Employer
shall also provide Employee with a company car for Employee's use in furthering
the business of Employer of
the kind and type similar to that previously provided to Employee. Employee
shall be allowed an allowance of $750.00 per month for such car.
6. Vacation. Employee shall be entitled to receive four (4)
weeks paid vacation time after each year of employment upon dates agreed upon by
Employer. Upon separation of employment, for any reason, vacation time accrued
and not used shall be paid at the salary rate of Employee in effect at the time
of employment separation.
7. Secrecy. At no time shall Employee disclose to anyone any
confidential or secret information (not already constituting information
available to the public) concerning (a) internal affairs or proprietary business
operations of Employer or (b) any trade secrets, new product developments,
patents, programs or programming, especially unique processes or methods.
8. Covenant Not to Compete. Employee will not, at any time,
anywhere in the areas where Employer does business during the term of this
Agreement, and for one (1) year thereafter, either directly or indirectly,
engage in, with or for any enterprise, institution, whether or not for profit,
business, or company, competitive with the business (as identified herein) of
Employer as such business may be conducted on the date thereof, as a creditor,
guarantor, or financial backer, stockholder, director, officer, consultant,
advisor, employee, member, inventor, producer, director, or otherwise of or
through any corporation, partnership, association, sole proprietorship or other
entity; provided, that an investment by Employee, his spouse or his children is
permitted if such investment is not more than four percent (4%) of the total
debt or equity capital of any such competitive enterprise or business and
further provided that said competitive enterprise or business is a publicly held
entity whose stock is listed and traded on a national stock exchange or through
the Nasdaq Stock Market.
9. Termination.
a. Termination by Employer
(i) Employer may terminate this Agreement upon
written notice for Cause. For purposes hereof, "Cause" shall mean (A) engaging
by the Employee in conduct that constitutes activity in competition with
Employer; (B) the conviction of Employee for the commission of a felony against
the Employer; and/or (C) the habitual abuse of alcohol or controlled substances.
Notwithstanding anything to the contrary in this Section 9(a)(i), Employer may
not terminate Employee's employment under this Agreement for Cause unless
Employee shall have first received notice from the Board advising Employee of
the specific acts or omissions alleged to constitute Cause, and such acts or
omissions continue after Employee shall have had a reasonable opportunity (at
least 10 days from the date Employee receives the notice from the Board) to
correct the acts or omissions so complained of. In no event shall alleged
incompetence of Employee in the performance of Employee's duties be deemed
grounds for termination for Cause.
(ii) This agreement automatically shall terminate
upon the death of Employee, except that Employee's estate shall be entitled to
receive any amount accrued under Section 4(a) and the pro-rata amount payable
under Section 4(e) for the period prior to Employee's death and any other amount
to which Employee was entitled of the time of his death.
b. Termination by Employee
(i) Employee shall have the right to terminate his employment
under this Agreement upon sixty (60) days' notice to Employer
10. Consequences of Breach by Employer;
Employment Termination
a. If this Agreement is terminated pursuant to
Section 9(b)(i) hereof, or if Employer shall terminate Employee's employment
under this Agreement in any way that is a breach of this Agreement by Employer,
the following shall apply:
(i) Employee shall be entitled to payment of any
previously declared bonus and additional compensation as provided in Section
4(a) and (b) above.
b. In the event that Employee's employment is
terminated for any of the following (i) for cause as set forth in Section
9(b)(i) of this Agreement, (ii) the expiration of the term of this Agreement, or
(iii) resignation by the Employee, then the provisions of Section 8 shall apply
to Employee.
11. Remedies
Employer recognizes that because of Employee's
special talents, stature and opportunities in the frozen food industry, in the
event of termination by Employer hereunder (except under Section 9(a)(i) or
(ii), or in the event of termination by Employee under Section 9(b)(i) before
the end of the agreed term, the Employer acknowledges and agrees that the
provisions of this Agreement regarding further payments of base salary, bonuses
and the exercisability of Rights constitute fair and reasonable provisions for
the consequences of such termination, do not constitute a penalty, and such
payments and benefits shall not be limited or reduced by amounts' Employee might
earn or be able to earn from any other employment or ventures during the
remainder of the agreed term of this Agreement.
12. Excise Tax. In the event that any payment or benefit
received or to be received by Employee in connection with a termination of his
employment with Employer would constitute a "parachute payment" within the
meaning of Code Section 280G or any similar or successor provision to 280G
and/or would be subject to any excise tax imposed by Code Section 4999 or any
similar or successor provision then Employer shall assume all liability for the
payment of any such tax and Employer shall immediately reimburse Employee on a
"grossed-up" basis for any income taxes attributable to Employee by reason of
such Employer payment and reimbursements.
13. Arbitration. Any controversies between Employer and
Employee involving the construction or application of any of the terms,
provisions or conditions of this Agreement, save and except for any breaches
arising out of Sections 7 and 8 hereof, shall on the written request of either
party served on the other be submitted to arbitration. Such arbitration shall
comply with and be governed by the rules of the American Arbitration
Association. An arbitration demand must be made within one (1) year of the date
on which the party demanding arbitration first had notice of the existence of
the claim to be arbitrated, or the right to arbitration along with such claim
shall be considered to have been waived. An arbitrator shall be selected
according to the procedures of the American Arbitration Association. The cost of
arbitration shall be borne by the losing party or in such proportions as the
arbitrator shall decide. The arbitrator shall have no authority to add to,
subtract from or otherwise modify the provisions of this Agreement, or to award
punitive damages to either party.
14. Attorneys' Fees and Costs. If any action at law or in
equity is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which he may be
entitled.
15. Entire Agreement; Survival. This Agreement contains the
entire agreement between the parties with respect to the transactions
contemplated herein and supersedes, effective as of the date hereof any prior
agreement or understanding between Employer and Employee with respect to
Employee's employment by Employer. The unenforceability of any provision of this
Agreement shall not effect the enforceability of any other provision. This
Agreement may not be amended except by an agreement in writing signed by the
Employee and the Employer, or any waiver, change, discharge or modification as
sought. Waiver of or failure to exercise any rights provided by this Agreement
and in any respect shall not be deemed a waiver of any further or future rights.
b. The provisions of Sections 4, 7, 8, 9(a)(ii), 10,
11, 12, 13, 14, 17, 18, 19 and 20 shall survive the termination of this
Agreement.
16. Assignment. This Agreement shall not be assigned to other
parties.
17. Governing Law. This Agreement and all the amendments
hereof, and waivers and consents with respect thereto shall be governed by the
internal laws of the State of New York, without regard to the conflicts of laws
principles thereof.
18. Notices. All notices, responses, demands or other
communications under this Agreement shall be in writing and shall be deemed to
have been given when
a. delivered by hand;
b. sent be telex or telefax, (with receipt
confirmed), provided that a copy is mailed by registered or certified mail,
return receipt requested; or
c. received by the addressee as sent by express
delivery service (receipt requested) in each case to the appropriate addresses,
telex numbers and telefax numbers as the party may designate to itself by notice
to the other parties:
(i) if to the Employer:
SILVER STAR FOODS, INC.
0000 Xxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telefax: (000) 000-0000
Telephone: (000) 000-0000
Xxxxxxx X. Xxxxxx & Associates
0000 Xxxxx 0, Xxxxx X
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telefax: (000) 000-0000
Telephone: (000) 000-0000
(ii) if to the Employee:
Xxxxxxx Xxxxxx
0000 Xxxxxx X
Xxxxxxxx, Xxx Xxxx 00000
19. Severability of Agreement. Should any part of this
Agreement for any reason be declared invalid by a court of competent
jurisdiction, such decision shall not affect the validity of any remaining
portion, which remaining provisions shall remain in full force and effect as if
this Agreement had been executed with the invalid portion thereof eliminated,
and it is hereby declared the intention of the parties that they would have
executed the remaining portions of this Agreement without including any such
part, parts or portions which may, for any reason, be hereafter declared
invalid.
IN WITNESS WHEREOF, the undersigned have executed this
agreement as of the day and year first above written.
SILVER STAR FOODS, INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Xxxxxxx Xxxxxx
President
By: /s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx
