Exhibit 10.1
TERMINATION BENEFITS AGREEMENT
THIS TERMINATION BENEFITS AGREEMENT dated as of this __ day of March,
2001, by and between Global Seafood Technologies, Inc., a Nevada corporation,
having its principal executive offices at 000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxxxxxxxx
00000 (the "Company"), and Xxxxx Xxxxxxxxx, an individual whose mailing address
is 0000 Xxx Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 ("Executive").
Recitals:
A. The Executive has for many years served the Company as a key
executive officer and has helped guide
the Company through many issues.
B. The Executive has been undercompensated during his tenure as an
officer of the Company, having declined to demand normal salary and bonuses in
order to permit the Company to retain more resources to fund its growth.
C. The Executive is expected to continue to make a major contribution
to the profitability, growth, and financial strength of the Company.
D. The Company considers the continued services of the Executive to be
in the best interest of the Company and its shareholders and desires to assure
the continued services of the Executive on behalf of the Company on an objective
and impartial basis and without distraction or conflict of interest in the event
of an attempt to obtain control of the Company.
E. The Executive is willing to remain in the employ of the Company upon
the understanding that the Company will provide income security upon the terms
and subject to the conditions contained herein if the Executive's employment is
terminated voluntarily for good reason or involuntarily by the Company without
good reason.
Agreement
In consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the Company and the Executive agree as
follows:
1. Undertaking. The Company agrees to pay to the Executive the termination
benefits specified in paragraph 2 hereof if a Change of Control (as defined in
paragraph 3.1 hereof) occurs and within three (3) years after the Change of
Control occurs (i) the Company terminates the employment of the Executive for
any reason other than cause (as defined in paragraph 3.2 hereof), death, the
Executive's attainment of age sixty-five (65) or total and permanent disability,
or (ii) the Executive voluntarily terminates employment for good reason (as
defined in paragraph 3.3 hereof).
2. Termination Benefits. If the Executive is entitled to termination benefits
pursuant to paragraph 1 hereof, the Company agrees to pay to the Executive as
termination compensation in a lump-sum payment within five (5) calendar days of
the termination of the Executive's employment an amount to be computed by
multiplying (i) the Executive's average annual compensation payable by the
Company which was included in the gross income of the Executive for the most
recent five (5) calendar years ending coincident with or immediately before the
date on which control of the Company is acquired (or such portion of such period
during which the Executive was an employee of the Company), by (ii) two hundred
ninety-nine percent (299%). For purposes of this Agreement, employment and
compensation paid by any direct or indirect subsidiary of the Company will be
deemed to be employment and compensation paid by the Company. In the event such
payment is not made in full when due, interest shall accrue on the unpaid
portion at the rate of (18%) eighteen percent per annum, until paid in full.
3. Definitions.
3.1 Change of Control. As used in this Agreement, a "Change of Control"
means:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the
regulations promulgated thereunder (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 50% or more of either (i) the then
outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not
constitute a Change of Control: (i) any acquisition by the
Company, (ii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iii) any acquisition
by any corporation pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or
consolidation, the conditions described in clauses (i), (ii)
and (iii) of subsection (c) of this Section 3.1 are satisfied;
or
(b) Individuals who, as of the date hereof, constitute the Board
of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors (the
"Board"); provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or
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nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used
in former Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Board; or
(c) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, unless,
following such reorganization, merger or consolidation, (i)
more than 80 percent of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined
voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such reorganization,
merger or consolidation in substantially the same proportions
as their ownership, immediately prior to such reorganization,
merger or consolidation, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case
may be, (ii) no Person (excluding the Company, any employee
benefit plan (or related trust) of the Company or such
corporation resulting from such reorganization, merger or
consolidation and any Person beneficially owning, immediately
prior to such reorganization, merger or consolidation,
directly or indirectly, 20 percent or more of the Outstanding
Company Common Stock or Outstanding Voting Securities, as the
case may be) beneficially owns, directly or indirectly, 20
percent or more of, respectively, the then outstanding shares
of common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined voting
power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of
directors and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the
Incumbent Board at the time of the execution of the initial
agreement providing for such reorganization, merger or
consolidation; or
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(d) Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or
other disposition of all or substantially all of the assets of
the Company, other than to a corporation, with respect to
which following such sale or other disposition, (A) more than
80 percent of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power
of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person
(excluding the Company and any employee benefit plan (or
related trust) of the Company or such corporation and any
Person beneficially owning, immediately prior to such sale or
other disposition, directly or indirectly, 20 percent or more
of the Outstanding Company Common Stock or Outstanding Company
Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 20 percent or more of, respectively,
the then outstanding shares of common stock of such
corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors and (C) at least a
majority of the members of the board of directors of such
corporation were members of the Incumbent Board at the time of
the execution of the initial agreement or action of the Board
providing for such sale or other disposition of assets of the
Company.
3.2 Cause. As used in this Agreement, the term "cause" means an act or
acts of dishonesty by the Executive constituting a felony under applicable law
and resulting or intending to result directly or indirectly in gain to or
personal enrichment of the Executive at the Company's expense. Notwithstanding
the foregoing, the Executive shall not be deemed to have been terminated for
cause unless and until there shall have been delivered to the Executive a copy
of a resolution duly adopted by the affirmative vote of not less than a majority
of the Board called and held for the purpose (after reasonable notice and
opportunity for the Executive, together with counsel, to be heard before the
Board), finding that in the good faith opinion of the Board the Executive was
guilty of conduct set forth above in the first sentence of this subsection and
specifying the particulars thereof in detail.
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3.3 Good Reason. As used in this Agreement, the term "good reason"
means, without the Executive's written consent, (i) a change in status, position
or responsibilities which, in the Executive's reasonable judgment, does not
represent a promotion from existing status, position or responsibilities as in
effect immediately prior to the Change of Control; the assignment of any duties
or responsibilities which, in the Executive's reasonable judgment, are
inconsistent with such status, position or responsibilities; or any removal from
or failure to reappoint or reelect the Executive to any of such positions,
except in connection with the termination for total and permanent disability,
death or cause or by him other than for good reason; (ii) a reduction by the
Company in the Executive's base salary as in effect on the date hereof or as the
same may be increased from time to time during the term of this Agreement or the
Company's failure to increase (within twelve (12) months of the Executive's last
increase in base salary) the Executive's base salary after a Change of Control
in an amount which at least equals, on a percentage basis, the average
percentage increase in base salary for all executive and senior officers of the
Company effected in the preceding twelve (12) months; (iii) the relocation of
the Company's principal executive offices to a location outside the Biloxi,
Mississippi metropolitan area or the relocation of the Executive by the Company
to any place other than the location at which the Executive performed duties
prior to a Change of Control, except for required travel on the Company's
business to an extent substantially consistent with business travel obligations
at the time of a Change of Control; (iv) the failure of the Company to continue
in effect any incentive, bonus or other compensation plan in which the Executive
participates, including but not limited to the Company's stock option and
restricted stock plans, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan), evidenced by the Executive's written consent,
has been made with respect to such plan in connection with the Change of
Control, or the failure by the Company to continue the Executive's participation
therein, or any action by the Company which would directly or indirectly
materially reduce participation therein; (v) the failure by the Company to
continue to provide the Executive with benefits substantially similar to those
enjoyed or entitled under any of the Company's pension, profit sharing, life
insurance, medical, dental, health and accident, or disability plans at the time
of a Change of Control, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed or entitled to at the time of
the Change of Control, or the failure by the Company to provide the number of
paid vacation and sick leave days to which the Executive is entitled on the
basis of years of service with the Company in accordance with the Company's
normal vacation policy in effect on the date hereof; (vi) the failure of the
Company to obtain a satisfactory agreement from any successor or assign of the
Company to assume and agree to perform this Agreement; (vii) any purported
termination of the Executive's employment which is not effected pursuant to
paragraph 4.3 hereof (and, if applicable, paragraph 3.2 hereof); and for
purposes of this Agreement, no such purported termination shall be effective; or
(viii) any request by the Company that the Executive participate in an unlawful
act or take any action constituting a breach of the Executive's professional
standard of conduct. Notwithstanding anything in this paragraph 3.3) to the
contrary, the Executive's right to terminate the employment pursuant to this
paragraph 3.3 shall not be affected by incapacity due to physical or mental
illness.
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4. Additional Provisions.
4.1 Enforcement of Agreement. The Company is aware that upon the
occurrence of a Change of Control the Board of Directors or a shareholder of the
Company may then cause or attempt to cause the Company to refuse to comply with
its obligations under this Agreement, or may cause or attempt to cause the
Company to institute, or may institute litigation seeking to have this Agreement
declared unenforceable, or may take or attempt to take other action to deny the
Executive the benefits intended under this Agreement. In these circumstances,
the purpose of this Agreement could be frustrated. It is the intent of the
Company that the Executive not be required to incur the expenses associated with
the enforcement of any rights under this Agreement by litigation or other legal
action, nor be bound to negotiate any settlement of any rights hereunder,
because the cost and expense of such legal action or settlement would
substantially detract from the benefits intended to be extended to the Executive
hereunder. Accordingly, if following a Change of Control it should appear to the
Executive that the Company has failed to comply with any of its obligations
under this Agreement or in the event that the Company or any other person takes
any action to declare this Agreement void or enforceable, or institutes any
litigation or other legal action designed to deny, diminish or to recovery from
the Executive the benefits entitled to be provided to the Executive hereunder,
and that Executive has complied with all obligations under this Agreement, the
Company irrevocably authorizes the Executive from time to time to retain counsel
of the Executive's choice, at the expense of the Company as provided in this
paragraph 4.1, to represent the Executive in connection with the initiation or
defense of any litigation or other legal action, whether such action is by or
against the Company or any director, officer, shareholder, or other person
affiliated with the Company, in any jurisdiction. Notwithstanding any existing
or prior attorney-client relationship between the Company and such counsel, the
Company irrevocably consents to the Executive entering into an attorney-client
relationship with such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist between the
Executive and such counsel. The reasonable fees and expenses of counsel selected
from time to time by the Executive as hereinabove provided shall be paid or
reimbursed to the Executive by the Company on a regular, periodic basis upon
presentation by the Executive of a statement or statements prepared by such
counsel in accordance with its customary practices, up to a maximum aggregate
amount of $500,000. Any legal expenses incurred by the Company by reason of any
dispute between the parties as to enforceability of or the terms contained in
this Agreement, notwithstanding the outcome of any such dispute, shall be the
sole responsibility of the Company, and the Company shall not take any action to
seek reimbursement from the Executive for such expenses.
4.2 Severance Pay; No Duty to Mitigate. The amounts payable to the
Executive under this Agreement shall not be treated as damages but as severance
compensation to which the Executive is entitled by reason of termination of
employment in the circumstances contemplated by this Agreement. The Company
shall not be entitled to set off against the amounts payable to the Executive of
any amounts earned by the Executive in other employment after termination of
employment with the Company, or any amounts which might have been earned by the
Executive in other employment had other such employment been sought.
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4.3 Notice of Termination. Any purported termination by the Company or
by the Executive shall be communicated by written Notice of Termination to the
other party hereto in accordance with paragraph 4.11 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of his employment under the provision so
indicated. For purposes of this Agreement, no such purported termination shall
be effective without such Notice of Termination.
4.4 Internal Revenue Code. Anything in this Agreement to the contrary
notwithstanding, in the event that HJ & Associates, L.L.C., Certified Public
Accountants, of Salt Lake City, Utah, or any successor firm appointed by the
Company for the purpose of auditing its books (the "Auditor") determines that
the payment by the Company to or for the benefit of the Executive, whether paid
or payable pursuant to the terms of this Agreement, would be non-deductible by
the Company for federal income tax purposes because of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), then the amount payable
to or for the benefit of the Executive pursuant to this Agreement (the
"Agreement Payments") shall be reduced (but not below zero) to the Reduced
Amount. For purposes of this paragraph 4.4, the "Reduced Amount" shall be the
amount which maximizes the amount payable without causing the payment to be
nondeductible by the Company because of Section 280G of the Code.
4.5 Assignment. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective executors, administrators,
heirs, personal representatives, successors, and assigns, but neither this
Agreement nor any right hereunder may be assigned or transferred by either party
hereto, any beneficiary, or any other person, nor be subject to alienation,
anticipation, sale, pledge, encumbrance, execution, levy, or other legal process
of any kind against the Executive, his beneficiary or any other person.
Notwithstanding the foregoing, the Company will assign this Agreement to any
corporation or other business entity succeeding to substantially all of the
business and assets of the Company by merger, consolidation, sale of assets, or
otherwise and shall obtain the assumption of this Agreement by such successor.
4.6 Entire Agreement. This Agreement contains the entire Agreement
between the parties with respect to the subject matter hereof. All
representations, promises, and prior or contemporaneous understandings among the
parties with respect to the subject matter hereof are merged into and expressed
in this Agreement, and any and all prior agreements between the parties with
respect to the subject matter hereof are hereby canceled.
4.7 Amendment. This Agreement shall not be amended, modified, or
supplemented without the written agreement of the parties at the time of such
amendment, modification, or supplement.
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4.8 Governing Law. This Agreement shall be governed by and subject to
the laws of Nevada.
4.9 Severability. The invalidity or unenforceability of any particular
provision of this particular Agreement shall not affect the other provisions,
and this Agreement shall be construed in all respects as if such invalid or
unenforceable provision has not been contained herein.
4.10 Captions. The captions in this Agreement are for convenience and
identification purposes only, are not an integral part of this Agreement, and
are not to be considered in the interpretation of any part hereof.
4.11 Notices. Except as specifically set forth in this Agreement, all
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered in person or sent by registered or
certified mail, postage prepaid, addressed as set forth above, or to such other
address as shall be furnished in writing by any party to the others.
4.12 Waivers. Except as otherwise specifically provided in this
Agreement, no waiver by either party hereto of any breach by the other party
hereto of any condition or provision or condition of this Agreement to be
performed by such other party shall be deemed to be a valid waiver unless such
waiver is in writing or, even if in writing, shall be deemed to be a waiver of a
subsequent breach of such condition or provision or a waiver of a similar or
dissimilar provision or condition at the same or at any prior or subsequent
time.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
COMPANY:
GLOBAL SEAFOOD TECHNOLOGIES, INC.,
a Nevada corporation
By: __________________________________
Its: _____________________________
EXECUTIVE:
__________________________________
XXXXX XXXXXXXXX
21/11179/D/10
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