Execution Copy
EXHIBIT 10.69
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), dated as of the 6th
day of March 2002, between Syndicated Food Service International, Inc., a
Florida corporation with offices at 0000 Xxxxxxx Xxxxxxx Xxxx, Xxxxxx Xxxxx,
Xxxxxxx 00000 (the "Company" or the "Employer"), the Company together with its
affiliates shall be referred to as "Employer", and Xxxxxx X. Xxxxx, Xx.,
resident at 00000 Xxxxxxxxx Xxxxxxxx, Xxxxxxxxxx, XX 00000 (the "Employee").
R E C I T A L S:
A. The Employer and its subsidiaries and affiliates
desire to employ the Employee.
B. The Employee desires to be so employed upon the terms
and conditions set forth below.
NOW, THEREFORE, in consideration of the terms and the mutual
undertakings contained herein, it is agreed as follows:
1. Term. This Agreement shall commence on March 6, 2002
and expire on March 5, 2003, subject to the terms of this Section 1 and Sections
8, 9, 10 and 11 hereof (the date on which this Agreement shall expire, as such
date may be extended in accordance with the terms of this Section 1 is
hereinafter referred to as the "Expiration Date"). Subject to the terms of
Sections 8, 9,10 and 11, unless either party gives written notice to the other
of its desire to terminate this Agreement at least 90 (ninety) days prior to the
Expiration Date or Extended Period, this Agreement will be automatically renewed
for further period(s) of one year from the then current Expiration Date on the
same terms and conditions set forth herein (the "Extended Period"); provided,
however, there is not a grant of additional stock options in any Extended Period
unless granted by the Employer's Board of Directors at its sole discretion.
Except when the contrary is indicated, the phrase "the term of this Agreement"
shall henceforth be deemed to include the Extended Period.
2. Employment. The Employer agrees to employ the
Employee as the Employer's President and Chief Executive Officer and the
Employee accepts such employment and to perform the duties set forth in Section
3 below.
3. Duties.
(a) The Employee shall render all services of the nature
of the services that a diligent chief executive officer and president of a
public company would render.
(b) During the term of this Agreement, Employee shall
devote his full time, energy, skill and best efforts to promote Employer's
business and affairs and to perform his duties hereunder.
(c) Employee shall have the option to chose the city of
location of his primary residence, provided that Employee spends a minimum of 20
(twenty) hours per month at the offices of Syndicated Food Services Group Inc.
during the term of this Agreement. Employee shall allocate his time properly
among the Company and its subsidiaries and affiliates in order to perform his
duties under this Agreement. It is further understood, that if the Employer
makes additional company acquisitions that the Board of Directors may designate
and change where the Employee shall perform his services and allocate his time.
Notwithstanding the provisions of this Subsection 3(c), Employee shall have the
right to take three weeks of vacation per year during the term of his employment
(prorated for periods of less than a full year); provided that all vacation must
be used within the calendar year in which the vacation accrues or it is
forfeited.
4. Compensation.
(a) The Employer shall pay to the Employee for his loyal
and consistent performance of his services and obligations provided herein, an
annual base salary at the rate of $150,000 (one hundred and fifty thousand
dollars) per annum. The base salary shall be paid in conformity with Employer's
internal payroll policies, which is currently every two weeks in arrears, then
in force.
(b) Employee shall be entitled to an increase in his
annual base salary of $50,000 (fifty thousand dollars) in the event Company's
consolidated pre tax profits over an one-year period, as reported by the Company
in its 10-QSB form filed with the Securities and Exchange Commission, are equal
to, or greater than, $150,000 (one hundred and fifty thousand dollars) for the
term of this Agreement. If the conditions set forth in this Subsection 4(c) are
met, Employee's salary increase shall be retroactive to April 1, 2002. The
one-year period for purposes of calculation of the Company's average
consolidated pre tax profits shall start on April 1, 2002 for the first year and
on April 1 of the following years during the Extended Period. In case of an
extension of this Agreement, the same conditions set forth herein shall apply to
the subsequent years of the term of this Agreement.
(c) Any additional increase to the base salary and the
payment of any bonus shall be subject to the sole discretion of the Board of
Directors of the Employer.
(d) Employee shall be entitled to an additional
conditional compensation as follows:
(1) A cash payment, at the closing of a new
banking credit facility, which the Employee has
procured and obtained on behalf of the Employer,
equal to (i) $25,000 (twenty-five thousand dollars)
for the first $1,000,000 (one million dollars) of
credit obtained; and (ii) an additional cash payment
equivalent to 2% (two percent) of each aggregate
$400,000 (four hundred thousand dollars) increment
obtained above the
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initial $1,000,000 (one million dollars) credit
availability. Any financing provided by Platinum
funding shall not be deemed a new credit facility for
purposes of this Subsection 4(d)(1).
(2) A cash payment equal to $25,000 (twenty-five
thousand dollars) at the closing of a refinancing of
the mortgage on the Employer's respective plant(s),
which the Employee has procured and obtained on
behalf of the Employers.
(3) A cash payment equal to $50,000 (fifty
thousand dollars) upon the consummation of an
acquisition of a new business entity by the Employer
in excess of $2,000,000 (two million dollars) in
annual gross revenues, which the Employee has
procured and obtained on behalf of the Employer.
(4) The parties acknowledge and agree that the
payments provided for in Subsections 4(d)(1),(2) and
(3) above are conditioned on the approval of the
respective transactions by the Board of Directors of
the Employer and the obtaining of any applicable
approval or authorization by shareholders, if
applicable in the particular transaction.
(e) All the payments due to Employee under this Agreement
shall be subject to all applicable withholdings taxes and any other amounts
required by law to be withheld.
5. Stock Options. The Company grants to the Employee
stock options ("Options") to purchase up to 246,796 shares of the Company's
common stock ("Common Stock") exercisable at the closing price of the Common
Stock on the date hereof. The Company plans to implement a Stock Incentive Plan
("Plan"), which Plan may be subject to ratification and approval by the
Company's shareholders. At such time as the Plan is ratified by the Company, the
Options shall be converted or otherwise deemed to be a part of the Plan. The
grant of the Options is subject to the following terms and conditions:
(a) The Options shall vest as follows:
(1) Options to purchase 82,266 shares shall vest
on the date of signature of this Agreement;
(2) Options to purchase an additional 82,265
shares shall vest on the first anniversary of this
Agreement; and
(3) Options to purchase the remaining 82,265
shares shall vest on the second anniversary of this
Agreement.
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(b) The exercise period for the Options granted pursuant
to this Section 5 shall be for a period often (10) years from the date of grant,
which is the date of implementation of the Plan.
(c) Notwithstanding the provisions of Subsections 5(a)
and (b) of this Agreement, if
(1) the Employee's employment with Employer is
terminated (i) for "Cause", as defined in Section 8,
any outstanding unvested Options granted to the
Employee pursuant to this Agreement shall terminate
as of the date of the termination of the employment,
or
(2) the Employee dies or is disabled, then the
exercise period for all Options granted pursuant to
this Agreement that have vested shall be modified to
be a period of 90 (ninety) days following the
Employee's death or disability, as applicable.
(d) If (but without any obligation to do so), during the
term of this Agreement, Employer proposes to register Common Stock under the
Securities Act of 1933, as amended ("Securities Act") in connection with the
public offering of such securities solely for cash, Employer shall, at such
time, promptly give Employee written notice of such registration. Upon the
written request of Employee given within ten (10) days after mailing of such
notice by the Employee in accordance with Section 14, and provided that holders
of not less than 10% of the outstanding securities of Employer join in such
registration, Employer shall use its best efforts to cause to be registered
under the Securities Act all of the Common Stock held by Employee that Employee
has requested to be registered. In case of an offering involving the
underwriting of shares being issued by Employer, Employer shall not be required
to include Employee's Common Shares in such underwriting unless Employee accepts
the term of such underwriting, and then only in such quantity as will not, in
the opinion of the underwriters, exceed the largest number of securities
requested to be included in such offering which can be sold without having an
adverse effect on such offering by the Employer. The Employer shall have no
obligation under this Subsection 5(d) make any offering of its securities, or to
complete an offering of its securities that it proposes to make.
6. Insurance and Benefits. During the term of this
Agreement, or any renewal or extension thereto, the Employee shall be entitled
to participate in all employee benefit plans and insurance programs which shall
be provided from time to time by the Employer to its employees (collectively,
"Employee Benefit Plans") in accordance with their terms and conditions. Until
Employee becomes eligible to join Employer's health insurance plan, Employee
shall be entitled to reimbursement of his health insurance expenses (medical and
dental) against presentation of the relevant invoices, provided that such
expenses do not exceed $600.00 (six hundred dollars) per month. Notwithstanding
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the foregoing, the Employer shall pay the entire premium of the health insurance
plan offered to the Employee in accordance with this Section 6.
7. Reimbursement of expenses. During the term of this
Agreement, the Company will reimburse Employee for usual out-of-pocket and
travel expenses incurred in the course of performing Employee's duties hereunder
in accordance with Employer's internal policies then in force. Employee shall
provide the Company with all receipts and documentation supporting such
expenses.
8. Termination. This Agreement may be terminated by the
Employer for Cause immediately upon written notice to the Employee. The term
"Cause", as used herein, shall mean the loss of any license necessary for the
Employee to perform his duties hereunder, or any willful misconduct,
malfeasance, gross negligence or other like conduct adversely affecting the best
interests of the Employer, including, without limitation, (i) the failure or
neglect by the Employee to perform his duties hereunder which remains uncured
for 20 days after receipt of written notice from the Employer, (ii) the
violation or attempted violation of any provision hereof, (iii) the commission
of any felony, including, without limitation, any fraud against the Employer,
any of its affiliates, clients or customers of the Employer. In case of
termination for Cause by Employer, Employee shall not be entitled to the
compensation set forth in Section 4 above.
9. Return of Documents. On termination of this Agreement
or at any time upon the request of the Board of Directors of the Employer or its
affiliates, the Employee shall return to the Employer all documents, including
all copies thereof, and all other property relating to the business or affairs
of the Employer, including, without limitation, customer lists, agents or
representatives lists, commission schedules and information manuals, letters,
materials, reports, lists and records (all such documents and other property
being hereinafter referred to collectively as the "Materials"), in his
possession or control, no matter from whom or in what manner he may have
acquired such property. The Employee acknowledges and agrees that all of the
Materials are property of the Employer and releases all claims of right of
ownership thereto.
10. Confidentiality.
(a) Employee acknowledges he will have access to
operating, financial and other information of Employer and customers of the
Employer including, without limitation, procedures, business strategies, and
prospects and opportunities, techniques, methods and information about, or
received by it, from its customers and that divulgence will irreparably harm the
Employer ("Confidential Information"). Employee also acknowledges that the
foregoing provides Employer with a competitive advantage (or that could be used
to the disadvantage of the Employer by a competitor). Employee also acknowledges
the interest of the Employer in maintaining the confidentiality of such
information and Employee shall not, nor any person acting on behalf of Employee,
divulge, disclose or make known in any way or use for the individual benefit of
Employee or others any of such Confidential Information. The foregoing is not
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applicable to such of the Confidential Information that is established by
Employee to be in the public domain otherwise than as a result of its
unauthorized disclosure by Employee or any other person.
(b) The customers of the Employer entrust the Employer
with responsibility for their business in the expectation that the Employer will
hold all such matters, including in some cases the fact that they are doing
business with the Employer and the specific transactions in which they are
engaged, in the strictest confidence ("Customer Confidences"). Employee
covenants that after the termination of his employment with the Employer, he
will hold all Customer Confidences in a fiduciary capacity and will not directly
or indirectly disclose or use such information.
(c) Employee hereby assigns to the Employer his entire
right, title and interest in any idea, concept, technique, invention and related
documentation, other works of authorship, and the like (all hereinafter called
"Developments") made, conceived, written, or otherwise created solely by him or
jointly with others, whether or not such Developments are patentable, subject to
copyright protection or susceptible to any other form of protection which relate
to the actual business or research or development of the Employer. Employee,
after the termination of its employment with Employer, shall return to the
Employer (and shall not retain any copies or excerpts therefrom) all documents,
notes, analyses or compilations, including all copies thereof, and all other
property relating to the Employer ("Employer Documents") including, but not
limited to, documents generated by Employee pursuant to his relation with the
Employer.
(d) Employee acknowledges that the Employer has a
compelling business interest in preventing unfair competition stemming from the
use or disclosure of Customer Confidences and Confidential Information in the
event that, after any termination on the post- employment activities of
Employee, Employee goes to work or becomes affiliated with a competitor of the
Employer.
(e) Employee further acknowledges that all customers he
services or dealt with while employed with the Employer are customers of the
Employer and not Employee's personally. Employee also acknowledges that, by
virtue of his employment with the Employer, Employee has gained or will gain
knowledge of the identity, characteristics and preferences of the customers of
the Employer, and that Employee will not use such Customer Confidences and
Confidential Information at any time.
11. Covenants Not to Compete or Solicit.
(a) The Employee undertakes that during the term of this
Agreement and for 12 months thereafter, he will not, directly or indirectly
(whether as sole proprietor, partner, stockholder, director, officer, employee
or in any other capacity as principal or agent) compete with, or participate in
any business that competes with, the Employer; provided that the Employee may
invest in (i) the securities of any business or enterprise (but without
otherwise participating in the activities of such business or enterprise) which
are listed on a national or regional securities exchange or traded in the
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over-the-counter market, and (ii) equity interests of the Employer, of any
member thereof.
(b) The Employee undertakes that during the term of this
Agreement and for a period of 36 months thereafter he will not, directly or
indirectly (whether as a sole proprietor, partner, stockholder, director,
officer, employee or in any other capacity as principal or agent), do any of the
following:
(i) hire, or attempt to hire for employment, any
person who is an employee of the Employer on the date of such termination of
employment, or attempt to influence any such person to terminate his employment
by the Employer; or
(ii) in any other manner interfere with, disrupt
or attempt to disrupt the relationship, contractual or otherwise, between the
Employer and any of its employees, or disparage the business or reputation of
the Employer to any such person.
(c) The Employee undertakes that during the term of this
Agreement and for 36 months thereafter he will not, directly or indirectly
(whether as a sole proprietor, partner, stockholder, director, officer, employee
or in any other capacity as principal or agent), do any of the following:
(i) solicit, service or accept any actual or
prospective accounts, clients or customers of the Employer during the period of
the Employee's employment by the Employer;
(ii) influence or attempt to influence any of the
accounts, customers or clients referred to in Subsection 11(c)(i) to transfer
their business or patronage from the Employer to any other person or company
engaged in a similar business;
(iii) directly assist any person or company
soliciting, servicing or accepting any of the accounts, customers or clients
referred to in Subsection 11(c)(i); or
(iv) in any other manner directly interfere with,
disrupt or attempt to disrupt the relationship, contractual or otherwise,
between the Employer and any of its accounts, customers or clients referred to
in Subsection 11(d)(i), or any other person, or disparage the business or
reputation of the Employer to any such person.
(d) The Employer undertakes that during the term of this
Agreement and for a period of 36 months thereafter he will not, directly or
indirectly, disparage the business or reputation of the Employee to any
accounts, customers or clients referred to in Subsection 11(c)(i), or any other
person.
12. Enforcement of Covenants.
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The parties acknowledge and agree that the covenants contained in
Sections 10 and 11 are essential elements of this Agreement and that, but for
the agreements of the Employee to comply with such covenants, the Employer would
not have entered into this Agreement. The parties further acknowledge and agree
that a breach by the Employee of the covenants contained in Sections 10 and 11
may result in irreparable injury to the Employer for which there is no adequate
remedy at law and that the Employer shall be entitled to seek enforcement of the
same by means of a temporary restraining order and/or a preliminary or permanent
injunction issued by any court having jurisdiction thereof. The covenants
contained in Sections 10 and 11 shall survive the termination of this Agreement.
The remedies provided in this Section 12 shall be in addition to, and not in
lieu of, any other remedies and relief including damages to which the Employer
may be entitled.
13. Blue-Pencil. If any court of competent jurisdiction
shall at any time deem the term of any of the covenants and undertakings of the
Employee under Sections 10 and 11 herein too lengthy, the other provisions of
those Sections 10 and 11 shall nevertheless stand, the period of restriction
shall be deemed to be the longest period permissible by law under the
circumstances. The court in each case shall reduce the period of restriction to
permissible duration.
14. Notices. Unless otherwise specifically provided
herein, all notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered by hand
or mailed, certified or registered mail, return receipt requested, with postage
prepaid at the following addresses, and/or to such other addresses and/or
persons which either party may designate by like notice:
(a) if to the Employee, to:
Xxxxxx X. Xxxxx, Xx.
11830 Windcreek Overlook
Xxxxxxxxxx, XX 00000
Fax No.: 000-000-0000
(b) if to the Employer, to:
Syndicated Food Service International, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxx 00000
Attn: Board of Directors
Fax N.: 000.000.0000
with a copy to:
Xxxxx X. Xxxxx, Esq.
Proskauer Rose LLP
0000 Xxxxxxxx
0
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: 000.000.0000
15. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York without
regard to conflict of law provisions. Any disputes with respect to the
interpretation of this Agreement or the rights and obligations of the parties
hereto shall be exclusively brought in any federal or state court of competent
jurisdiction located in the City of New York, State of New York. Each of the
parties waives any right to object to the jurisdiction or venue of such courts
or to claim that such courts are an inconvenient forum.
16. Additional Provisions.
(a) This Agreement shall inure to the benefit of, and be binding
upon, the Employer, its successors and assigns and shall inure to the benefit
of, and be binding upon, the Employee, his executors, administrators and heirs.
The Employee may not assign or delegate the performance of any of his rights
and/or obligations under this Agreement.
(b) This Agreement constitutes the entire Agreement,
representation and understanding of the parties hereto with respect to the
subject matter hereof, and no amendment or modification hereof shall be valid or
binding unless made in writing and signed by the parties hereto.
(c) No waiver of any provision of this Agreement shall be valid
unless the same is in writing and signed by the party against whom it is sought
to be enforced. No waiver of any default or breach of this Agreement shall be
deemed a continuing waiver or a waiver of any other breach or default.
(d) Employee acknowledges that prior to the execution of this
Agreement he had full opportunity to consult with his independent attorneys and
advisors as he deemed appropriate and he fully understands the nature and scope
of his rights and obligations hereunder.
(e) If any provision of this Agreement is invalid or unenforceable
in any jurisdiction such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability, but the
foregoing shall not render invalid or unenforceable in such jurisdiction the
remainder of this Agreement or the remainder of such provision or affect the
validity or unenforceability of any provision of this Agreement in any other
jurisdiction.
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused
this Agreement to be executed on the date first above written.
Syndicated Food Service International, Inc.
By:___________________________________
Name: Xxxxx Xxxxxx
Title: Secretary
______________________________________
Xxxxxx X. Xxxxx Xx.
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