HOST AMERICA CORPORATION
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of this 19th day of
February 1998 is by and between Host America Corporation, a Delaware
corporation with its principal places of business in the State of
Connecticut (hereinafter called the "Employer") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an
individual residing at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter called the "Employee").
WHEREAS, the Employer is a regional contract food service management
company; and
WHEREAS, the Employer wishes to provide assurance to the Employee that his
duties, responsibilities and authority are considered by the Employer to be
essential to the Employer's business success; and
WHEREAS, the Employer wishes to employ the Employee on terms that are
competitive in the marketplace and that reflect the Employee's experience
and expertise related to the business activities of the Employer; and
WHEREAS, the Employer desires to employ the Employee, and the Employee
desires to accept such employment, all upon the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth, the parties hereto hereby mutually agree as follows:
1. EMPLOYMENT. The Employer hereby employs the Employee, and the
Employee hereby accepts such employment, upon and subject to the terms
and conditions set forth herein.
2. EFFECTIVE DATE AND TERM. This Agreement shall take effect as of the
date hereof (the "Effective Date") and shall continue thereafter in
full force and effect for five years, until the day and month in the
year 2003 (the "Expiration Date") that corresponds to the day and
month that this Agreement shall take effect.
3. TITLE AND DUTIES; EXTENT OF SERVICES. The Employee shall promote the
business and affairs of the Employer as Vice President. The Employee
shall report and be responsible to the Board of Directors of the
Employer, and shall devote his full efforts, time, attention and
energies to the business and affairs of the Employer; provided,
however, that nothing in this Agreement or in the Employee's
employment relationship with the Employer shall prevent the Employee
from having an ownership interest in, and from rendering services to,
other companies or entities so long as any such ownership interest of
the Employee or any such services rendered by the Employee to any such
other companies or entities do not interfere with the reasonable
performance of the Employee's duties and responsibilities hereunder.
4. TRAVEL. During the term of this Agreement, the Employee shall engage
in reasonable business travel on behalf of the Employer.
5. COMPENSATION AND BENEFITS.
5.1. SALARY. The Employer shall pay the Employee a salary at an
annual rate of $80,000.00 (eighty thousand dollars). The
Employee's salary, which may be increased from time to time by
the Compensation Committee (in the absence thereof, by the
Board of Directors) of the Employee (hereinafter, the
"Salary"), shall not be decreased without the consent of the
Employee. The Employee's salary shall be paid in accordance
with the Employer's payroll practices as in effect from time to
time.
5.2. FRINGE BENEFITS. In addition to the Salary provided for in
Section 5.1 above, in connection with the Employee's employment
by the Company, the Employee shall be entitled to receive all
fringe benefits customarily offered by the Company to its
officers, including without limitation, an expense account, an
automobile expense account, and reimbursement of reasonable
country club membership dues and related business expenses.
5.3. HEALTH AND DENTAL INSURANCE. The Employee shall be entitled,
on a family coverage basis and at the Employer's sole cost and
expense, to participate in the health insurance plan (the
"Employer's Health Plan") and the dental insurance plan (the
"Employer's Dental Plan") generally made available to the
Employer's officers.
5.4. DISABILITY INSURANCE. The Employee shall be entitled to
participate, at the Employer's sole cost and expense, in the
long-term disability insurance plan generally made available to
other officers of the Employer (the "Long Term Disability
Plan").
5.5. LIFE INSURANCE. The Employee shall be entitled to participate,
at the Employer's sole cost and expense, in the life insurance
plan of the Employer (the "Life Insurance Plan") generally made
available to other officers of the Employer.
5.6. D&O LIABILITY INSURANCE. The Employer shall maintain at all
times a directors and officers liability insurance policy (the
"D&O Policy") and the Employee shall be covered in his capacity
as an officer of the Employer under the D&O Policy. The cost
of such coverage shall be borne by the Employer. In addition,
the Employee shall be entitled to indemnification from the
Employer for any claim, loss, damage or expense made against or
suffered by the Employee in his capacity as an officer of the
Employer.
5.7. 401(k) PLAN. The Employee shall be entitled to participate in
the Employer's 401(k) Plan and profit-sharing plans on the same
basis as other officers of the Employer. The Employee shall be
eligible to participate in the Employer's 401(k) Plan and
profit-sharing plans commencing on the Effective Date.
5.8. VACATION. The Employee shall be entitled to at least four
weeks of vacation per fiscal year during which time his
compensation shall be paid in full, and any
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unused vacation time shall accrue from year to year in
accordance with the Employer's policy therefor.
5.9. EXPENSE REIMBURSEMENT. The Employee may incur reasonable
expenses in connection with the promotion of the Employer's
business, all upon presentation by the Employee of
documentation, expense statements, vouchers and/or such other
supporting documentation as the Employer may reasonably
request. The Employer shall directly pay, or shall reimburse
the Employee for all of such reasonable expenses.
5.10. OTHER BENEFITS. The Employee shall be entitled to receive such
other fringe benefits as are customarily provided by the
Employer to other officers.
6. ADDITIONAL COMPENSATION.
6.1 STOCK OPTIONS. The Employee shall be entitled to participate
in the Employer's stock option plans on a basis consistent with
other officers of the Employer.
6.2 CONVERTIBLE PREFERRED SHARES. The Employee shall receive
225,000 shares of the Preferred Stock. Each share of Preferred
Stock is convertible into one (1) share of the Company's Common
Stock at a conversion value of $5.00 per share, provided,
however, the shares may only be converted after five (5) years
or sooner in the event the Company attains the following
revenues and pre-tax earnings during the following time period
or fiscal year after the completion of the proposed public
offering, each share of Preferred Stock shall be convertible
into the following number shares of Common Stock at the
following conversion value per share at no cost to the
employees:
Number of
Pre-Tax Conversion Common
Incentive Period Revenues Earnings Value Shares
---------------- -------- -------- ---------- --------
15 Months After
Public Offering $20,000,000 $1,000,000 $2.50 2.0 shares
Two Years After
Public Offering $40,000,000 $2,000,000 $2.00 2.5 shares
Three Years After
Public Offering $75,000,000 $3,750,000 $1.50 3.3 shares
Of the 700,000,000 shares of Preferred Stock to be issued to the
Company's Officers and Directors, up to 233,333 shares of Preferred Stock
are convertible upon achieving the performance goals in accordance with the
aforesaid formula at the end of each Incentive Period. In the event the
Company does not attain any of the aforesaid goals, each share of Preferred
Stock then outstanding shall automatically convert, at no cost to the
holder, into one (1) share of Common Stock five (5) years from the
effective date of the registration statement relative to the proposed
public offering. Each share of Preferred Stock will have the same voting
rights as a share of Common Stock.
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7. TERMINATION.
7.1. TERMINATION RIGHTS OF THE PARTIES.
(a) The Employee may terminate his employment hereunder at any
time for Good Reason (as defined below) by giving the Employer
thirty (30) days' prior notice thereof, whereupon such
employment shall terminate on the earlier of (i) the 30th day
following the date on which such notice is given to the
Employer by written notice to the Employer or (ii) any date
prior to such 30th day that is specified by the Employer by
written notice to the Employee. For purposes of this
Agreement, the term "Good Reason" shall mean (i) material
breach by the Employer of any of the terms or provisions of
this Agreement, (ii) any event of bankruptcy or insolvency in
respect of the Employer, (iii) any diminution on a cumulative
basis, of the Employee's, duties, responsibilities or authority
of the Employee as an officer of the Employer, (iv) the
principal place of business at which the Employee performs his
duties is changed to a location outside the State of
Connecticut, or (v) the occurrence of a Change of Control (as
defined in Section 7.3 hereof).
(b) The Employee may terminate his employment hereunder for
any reason whatsoever at any time by giving ninety (90) days'
prior written notice of such termination, whereupon such
employment shall terminate on the earlier of (i) the 90th day
following the date on which such notice is given or (ii) any
date prior to the 90th day that is specified by the Employer by
written notice to the Employee.
(c) The Employer may terminate the Employee's employment
hereunder at any time for Cause (as defined below) by giving
the Employee written notice of such termination whereupon such
employment shall terminate on the date such written notice is
given to the Employee. For purposes of this document, the term
"Cause" shall mean (i) any willful misconduct by the Employee
which materially injures the Employer, (ii) any act of
dishonesty in the Employee's relations with the Employer or any
of its directors, employees or vendors which materially injures
the Employer, (iii) any act of larceny, embezzlement,
conversion or any other similar act involving the
misappropriation of Employer funds in the course of the
Employee's employment, (iv) any material breach of this
Agreement by the Employee which is not cured by the Employee
within ten (10) days after receiving written notice thereof
from the Employer, or (v) the conviction of the Employee of any
felony which involves moral turpitude.
(d) The Employee's employment hereunder shall terminate
automatically (i) upon the Employee's death or (ii) on the
thirtieth (30th) day following any determination of Disability
(as defined below) in accordance with the procedures specified
in this Section 7.1(e). For purposes of this Agreement, the
term "Disability" shall mean an inability to perform the
material services contemplated under this Agreement for a
period of six consecutive months. A determination of
Disability shall be made by a physician satisfactory to both
the Employee and the Employer, provided that, if the Employee
and the Employer do not agree on
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a physician, the Employee and the Employer shall each select a
physician and these two together shall select a third
physician, whose determination as to Disability shall be
binding on all parties.
(e) The effective date of any termination of the Employee's
employment hereunder is hereinafter referred to as the
"Termination Date."
7.2. EMPLOYEE'S RIGHT TO COMPENSATION FOLLOWING TERMINATION;
SEVERANCE BENEFITS.
(a) Upon any termination of the Employee's employment
hereunder by the Employer or the Employee for any reason
whatsoever, or upon any termination of the Employee's
employment hereunder on account of his death or Disability, the
Employer shall (1) pay to the Employee all Salary accrued by
the Employee through the Termination Date, (2) pay to the
Employee any accrued but previously unpaid bonuses and (3) pay
and make available to the Employee all other benefits accrued
by the Employee through the Termination Date pursuant to
Section 5 hereof, all in the manner and at the time provided in
said Section 5. Any payments due or benefits owed to the
Employee by the Employer under this Section 7.2(a) shall be
paid or made available by the Employer to the Employee's legal
representative or heirs, as the case may be, upon the
Employee's death or Disability.
(b) Upon the termination of the Employee's employment
hereunder by the Employee for Good Reason pursuant to Section
7.1(a) hereof, the Employer shall provide severance to the
Employee by (1) continuing to pay to the Employee the Salary
through (i) the second anniversary of the Termination Date, or
(ii) the Expiration Date, whichever period is longer, in the
manner and at the time provided in Section 5.1 hereof, and (2)
paying and making available to the Employee through (i) the
second anniversary of the Termination Date, or (ii) the
Expiration Date, whichever period is longer, all fringe
benefits set forth in Section 5.3 through 5.10 hereof. Except
as provided under Section 7.3(c) below, the provisions of this
Section 7.2(b) shall be applicable with respect to any
termination of the Employee's employment hereunder to the
extent that the Employee shall be entitled to severance
therefor pursuant to Section 7.3 hereof.
7.3. SPECIAL SEVERANCE UPON A CHANGE OF CONTROL.
(a) Notwithstanding anything in this Agreement (including,
without limitation, Section 7.2 hereof) to the contrary, in the
event that the Employee's employment under this Agreement is
terminated by the Employer for any reason whatsoever, or by the
Employee with Good Reason (which for purposes of this Section
7.3(a) shall mean the occurrence of any of the events described
in clauses (i), (ii), (iii) or (iv) of the definition of the
term Good Reason as set forth in Section 7.1(a) hereof), at any
time within the two year period after a Change of Control, the
Employer shall, in addition to performing its obligations under
7.2(a) hereof, provide severance to the Employee by (i)
continuing to pay to the Employee the
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Salary through the last business day of the Special Severance
Period (as defined in Section 7.3(c) below) in the manner and
at the time provided in Section 5.1 hereof, and (ii) paying and
making available to the Employee through the last business day
of the Special Severance Period all fringe benefits set forth
in Section 5.3 through 5.10 hereof.
(b) For purposes of this Agreement, a "Change of Control"
shall be deemed to have occurred upon any of the following
events:
(i) when, pursuant to any transaction or series of
transactions, any "person" (as such term is used in Section
13(d) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "1934 Act")) becomes a "beneficial owner"
(as such term is defined in Rule 13d-3 promulgated under the
1934 Act), directly or indirectly, of securities of the
Employer representing thirty-five percent (35%) or more of
the total number of votes that may be cast for election of
directors of the Employer;
(ii) any contested election of directors, the result of
which is that the individuals who were directors of the
Employer immediately before such election shall cease to
constitute a majority of directors serving on the Board of
Directors of the Employer or any successor thereof;
(iii) any merger of consolidation of the Employer with or
into another corporation or entity where the Employer is not
a survivor;
(iv) a sale or disposal by the Employer of substantially
all of its assets to another corporation, entity or person;
or
(v) any tender of exchange offer, or other business
combination, the result of which is the persons who were
directors of the Employer before such transaction shall
cease to constitute a majority of the directors serving on
the Board of Directors of the Employer or any successor
thereof.
(c) For purposes of Section 7.3(a) above, the term "Special
Severance Period" shall mean a period of time, commencing on
the Termination Date, equal to two months for each calendar
year through which the Employee shall have been employed
hereunder; provided however, that in no event shall such period
have a total duration of less than one year from the
Termination Date or more than two years from the Termination
Date; and provided, further, that in no event shall such period
have a total duration of less than the severance period
applicable under Section 7.2(b) above.
7.4. MITIGATION. The Employee shall be under no obligation to
mitigate the amount of any severance payments provided for in
Sections 7.2 and 7.3 hereof or to seek other employment
following any termination of employment hereunder, and any
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amounts he may earn in any other employment shall not reduce or
offset the severance payments or other amounts due hereunder.
7.5. NO OFFSET. The Employer shall not be entitled to setoff,
offset, reduce or otherwise withhold any compensation due by
the Employer to the Employee hereunder. In the event that the
Employer shall have any claim against the Employee hereunder,
the Employer's only remedy shall be to commence an action at
law or in equity against the Employee seeking damages or
injunctive relief.
8. GENERAL PROVISIONS.
8.1. ACCELERATION. In the event of any failure by the Employer to
pay any of the amounts due and payable by the Employee under
Section 7.2 or 7.3 hereof, or in the event of the filing of any
bankruptcy petition by or against the Employer or the
appointment of a receiver to wind up and liquidate the
Employer, at any time after the Termination Date, the Employee
shall be entitled to accelerate any and all amounts due and
payable by the Employer to the Employee under this Agreement.
Any such right of acceleration shall not be in lieu of, or
otherwise limit, any remedies available to the Employee at law
or in equity.
8.2. ENTIRE AGREEMENT. This Agreement represents the entire
agreement of the parties and supersedes any prior
understandings, agreements or representations by and between
the Employer and the Employee with respect to the arrangements
contemplated hereby. No prior agreement, whether written or
oral, shall be construed to change, amend, alter, repeal or
invalidate this Agreement. This Agreement may be amended only
by a written instrument executed in one of more counterparts by
the parties.
8.3. WAIVER. No consent to or waiver of any breach or default in
the performance of any obligations hereunder shall be deemed or
construed to be a consent to or waiver of any other breach or
default in the performance of any of the same or any other
obligations hereunder. Failure on the part of either party to
complain of any act or failure to act of the other party or to
declare the other party in default, irrespective of the
duration of such failure, shall not constitute a waiver of
rights hereunder and no waiver hereunder shall be effective
unless it is in writing, executed by the party waiving the
breach or default hereunder.
8.4. ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their respective successors
and assigns and, in the case of the Employee, his heirs.
Neither the Employee nor the Employer may assign or transfer
any or all of their respective rights or obligations under this
Agreement.
8.5. VENUE. In the case of any dispute hereunder, the parties
submit to the exclusive jurisdiction and venue of any court of
competent jurisdiction sitting in the State of Connecticut, and
will comply with all requirements necessary to give such court
jurisdiction over the parties and the controversy.
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8.6. SEVERABILITY. All headings and subdivisions of this Agreement
are for reference only and shall not affect its interpretation.
In the event that any provision of this Agreement should be
held unenforceable by a court of competent jurisdiction, such
court is hereby authorized to amend such provision so as to be
enforceable to the fullest extent permitted by law, and all
remaining provisions shall continue in full force without being
impaired or invalidated in any way.
8.7. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Connecticut, without regard to its conflict of laws principles.
8.8. SURVIVAL. The provisions of Sections 5, 6, 7, and 8 shall
survive any termination of this Agreement or of the employment
relationship of the Employee and the Employer, including any
termination of such employment relationship at any time on or
after the expiration of the term of this Agreement as set forth
in Section 2 hereof. Without in any way or to any extent
limiting the generality of the foregoing, the parties hereby
expressly agree that the provisions of Section 7 hereof under
which prior written notice of termination shall be thirty (30)
days) shall survive the expiration of the term of this
Agreement as set forth in Section 2 hereof, it being the
intention of the parties hereto that the Employee shall be
entitled to compensation and severance as set forth in Section
7 hereof, upon any termination of the employment relationship
of the Employee and the Employer at any time after the
expiration of the term of this Agreement, all to the same
extent as if the Employee were employed under the terms of this
Agreement at the time of such termination.
8.9. NOTICES. All notices required or permitted under this
Agreement shall be in writing and shall be deemed effective
upon personal delivery or three days after deposit in the
United States Post Office, by registered or certified mail,
postage prepaid, return receipt requested, addressed to the
other party at the address shown above, or at such other
address or addresses of which either party shall notify the
other in accordance with this Section 8.9.
8.10. COUNTERPARTS. This Agreement may be executed in counterparts,
all of which together shall for all purposes constitute one
Agreement, binding on each of the parties hereto
notwithstanding that each such party shall not have signed the
same counterpart.
8.11. ATTORNEYS' FEES. Each party agrees that the losing party in
any suit or action shall reimburse the prevailing party for its
reasonable costs, expenses and attorneys' fees incurred in any
action or suit brought to determine the rights of the parties
hereunder.
8.12. ARBITRATION. Any disputes arising out of this Agreement
between the Employee and the Employer shall be settled by the
binding arbitration to held in the State of Connecticut, in
accordance with the rules of the American Arbitration
Association. Judgment upon any award rendered by any
arbitrator may be
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entered in any court having jurisdiction. The statute of
limitations, estoppel, waiver, laches, and similar doctrines
which would otherwise be applicable in any action brought by a
party shall be applicable in any arbitration proceeding, and
the commencement of an arbitration proceeding shall be deemed
the commencement of any action for these purposes.
8.13. INDEMNIFICATION. Employer shall indemnify, defend and hold
harmless Employee from and against any and all actions, claims,
liabilities, demands and proceedings asserted against the
Employee by reason of the fact that Employee is or was an
employee or officer of the Employer on or after the date hereof
to the fullest extent permitted under the laws of the State of
Delaware.
IN WITNESS WHEREOF, the parties have signed this agreement as of the date
written above as a sealed instrument.
EMPLOYEE EMPLOYER
HOST AMERICA CORPORATION
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Vice President Title: Director
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