EXHIBIT 10.1
E M P L O Y M E N T A G R E E M E N T
THIS AGREEMENT is made and entered into as of the ____ day of June,
1998, by and among Terrace Holdings, Inc., a Delaware corporation ("Company"),
_____________________________, a ______________ corporation and wholly owned
subsidiary of Company ("Subsidiary") [Company and Subsidiary are collectively
referred to as "Employer"] and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a resident of the State of
Florida ("Executive").
WHEREAS, Employer desires to enter into an agreement for the employment
of Executive by Employer and to be assured of the continued services of
Executive; and
WHEREAS, Executive desires to enter into employment by Employer on the
terms provided herein.
NOW, THEREFORE, in consideration of the foregoing promises, the
agreements set forth below, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Company and Executive
agree as follows:
1. Employment, Duties and Authority.
(a) Employer hereby employs Executive and Executive hereby
accepts employment by Employer on the terms, covenants and conditions
herein contained, as the President of Subsidiary. Executive shall have
such duties, responsibilities and authority as the by-laws of
Subsidiary shall from time to time provide and as the Board of
Directors of Subsidiary shall from time to time prescribe in writing.
(b) Executive shall be in charge of all day-to-day operations
of Subsidiary. During the term of Executive's employment hereunder,
Executive shall devote his full time to the performance of his duties
and responsibilities hereunder and will perform such duties and
responsibilities faithfully and with reasonable care for the welfare of
Employer. Executive shall provide services to Employer principally at
Subsidiary's office in the State of Florida, or at such other
reasonably proximate location.
(c) During the term of his employment hereunder, Executive
shall not perform any services for compensation for any person, firm,
partnership or corporation other than Employer without the express
written consent of the Board of Directors of Employer; provided that
Executive may provide services for charitable and not-for-profit
organizations in his discretion.
(d) So long as ALR Holdings Corp., or any of its subsidiaries
or affiliates including Sky Foods, Chef Arne Classics and MultiSales,
are customers of Employer, such account(s) will not be transferred or
conveyed to any other operating unit of the Company unless Executive is
employed by such unit to supervise such account(s).
1
2. Compensation.
(a) Base Salary. Employer shall pay to Executive during the
Term (hereinafter defined), an annual salary of Two Hundred Thousand
Dollars ($200,000) ["Base Salary"], subject to review by the Board of
Directors of Employer from time to time. Such salary shall be paid by
Employer to Executive in semi-monthly installments, less amounts which
Employer must withhold under applicable federal, state or local laws or
regulations.
(b) Payment During Absences. If Executive is absent from work
on account of personal injury or sickness, he shall continue to receive
the payments provided for in Paragraph 2(a) hereof; provided, however,
that any such payment may, at Employer's option, be reduced by the
amount which Executive may receive in disability payments (i) pursuant
to any disability insurance which Employer, in its sole discretion, may
maintain, or (ii) under any governmental program for disability
compensation.
(c) Bonus.
(i) At the discretion of the Board of Directors of
Employer, Executive may be entitled to a bonus each year.
Employer may establish and communicate standards to Executive
for the achievement of bonus compensation each year.
(ii) Under the bonus program established by the Board
of Directors of Employer for executive personnel, Executive
shall be entitled to a bonus based upon the annual earnings
before interest and taxes ("EBIT") of Subsidiary measured
against EBIT budgeted for Subsidiary for each calendar year
during the Term hereof. (The budgeted EBIT for the Subsidiary
for 1998 shall be determined by Employer and Executive on or
before August 15, 1998. The budgeted EBIT for Subsidiary for
each subsequent calendar year or portion thereof during the
balance of the Term shall be determined in the same manner as
such budgets are determined for the Company's other operating
units.) The amount of annual bonus payable to Executive shall
be calculated as follows:
Percent of Budgeted Percent of Actual
EBIT Reached EBIT payable as Bonus
95% .75%
100% 2.00%
105% 2.50%
110% and above 3.50%
2
(iii) Bonuses earned by and payable to Executive
hereunder shall be paid to Executive at the same time and in
the same manner as similar bonus payments are paid to other
executive personnel of the Company under the bonus program
established by the Board of Directors and in effect.
3. Benefits; Vacation; Automobile; Expense Reimbursement.
(a) Benefits. Executive shall be entitled to, and shall
receive, all benefits of employment available to other executives of
Employer generally, including, without limitation, participation in any
medical, dental or other group health plans or accident benefits, life
insurance benefits, club memberships, pension or profit-sharing plans,
as shall be instituted by Employer, in its sole discretion.
(b) Vacation. Executive shall be entitled to three (3) weeks
annual vacation, subject to increase to four (4) weeks on the terms
available to other executive employees of Employer.
(c) Automobile. Executive shall be entitled to the use of an
automobile during the Term and Employer shall be responsible for all
expenses related to such use for Employer purposes, including,
gasoline, maintenance, insurance and taxes. Employer shall reimburse
Executive for such expenses as described in Paragraph 3(d).
(d) Expense Reimbursement. During the term hereof, Employer
shall reimburse Executive for all reasonable and necessary expenses
incurred by Executive in the performance of his duties hereunder. Such
expenses include, without limitation, travel, meals, lodging, office
supplies or equipment and are subject to such reasonable limitations,
restrictions and reporting standards as the Board of Directors of
Employer may from time to time establish. Executive shall provide to
Employer promptly after incurring any such expense, a detailed report
thereof and such documentation as Employer shall from time to time
require and as shall be sufficient to support the deductibility of all
such expenses by Employer for federal income tax purposes.
4. Term.
The employment of Executive hereunder shall be for a five-year term
commencing as of July 1, 1998 and expiring on June 30, 2003 (the "Term"), and
shall automatically be renewed for an additional five-year term unless Executive
or Employer gives notice of the termination of Executive's employment and this
Agreement under the terms of Paragraphs 5 or 6 hereof.
3
5. Termination By Employer.
(a) Employer's Right To Terminate Prior To Expiration Of Term.
Employer may terminate this Agreement prior to the expiration of its
term on the occurrence of either:
(i) an event of default with respect to Executive, as
provided herein; or
(ii) death or Total Disability (hereafter defined) of
Executive occurring during the Term.
(b) Event Of Default By Executive. For purposes of this
Paragraph 5(b), an event of default with respect to Executive shall
include:
(i) any willful failure by Executive to perform his
duties, responsibilities or obligations hereunder in a
faithful and diligent manner or with reasonable care and (if
such failure can be cured) the failure by Executive to cure
such failure within ten (10) days after Executive's receipt of
written notice thereof;
(ii) embezzlement or conversion by Executive of any
funds of Employer or any client of Employer;
(iii) destruction or conversion by Executive of any
property of Employer, without Employer's consent;
(iv) Executive's conviction of a felony;
(v) Executive's adjudication as an incompetent;
(vi) Executive's habitual intoxication;
(vii) Executive's drug addiction; or
(viii) Any breach of Paragraph 7 or 8 hereof.
(c) Total Disability. Total Disability of Executive shall
occur hereunder when (i) Executive fails or is unable to perform his
duties on a full-time basis, for an aggregate of one hundred eight
(180) days ("Disability Period"), and (ii) upon certification from a
licensed physician in the State of Florida that Executive is
permanently disabled from performing his duties hereunder. Where the
4
conclusion of one (1) Disability Period is followed within six (6)
months by the start of a second Disability Period and the disabilities
are the same or related, both Disability Periods shall be aggregated
for purpose of this Paragraph 5(c).
(d) Effect Of Termination.
(i) In the event of termination of this Agreement and
Executive's employment pursuant to Paragraph 5(a) hereof, all
rights and obligations of Employer and Executive hereunder
shall terminate on the date of such termination, subject to
the following:
(A) Executive shall be entitled to
receive (subject to any rights of setoff or
counterclaim by Employer) all salary, additional
compensation and benefits which shall have accrued
prior to the date of such termination, and the
obligation of Employer for the payment of salary,
additional compensation or benefits shall terminate
as at the date of such termination; and
(B) All rights of Employer or Executive
which shall have accrued hereunder prior to the date
termination of Executive's employment and of this
Agreement ("Termination"), and all provisions of this
Agreement which are to survive Termination shall
survive Termination, and Employer and Executive shall
continue to be bound by such provisions in accordance
with the terms thereof.
(ii) In the event of Termination before the
expiration of the Term by act of Employer other than pursuant
to Paragraphs 5(a) or 5(f) hereof, or by reason of a job
caused Total Disability, Executive shall be entitled to
receive the remaining salary and benefits due for the balance
of the Term, with such salary to be paid in accordance with
Paragraph 2(a).
(e) Death Of Executive. This Agreement and all rights and
obligations of the parties hereunder shall terminate immediately upon
the death of Executive, except that Employer shall pay to the heirs,
legatees or personal representative of Executive all compensation or
benefits hereunder accrued, but not paid, to the date of Executive's
death.
(f) Non-Renewal. Notwithstanding Paragraph 4, the Term shall
not be automatically renewed if Employer notifies Executive on or prior
to October 31, 2002 that Employer elects not to renew this Agreement.
5
6. Termination By Executive.
(a) Executive's Right To Terminate. Executive shall be
entitled but not obligated to terminate his employment with Employer
under this Agreement prior to the expiration of the Term upon the
occurrence of an event of default by Employer.
(b) Event Of Default By Employer. For purposes of this
Paragraph 6(b), an event of default with respect to Employer shall
include:
(i) Any failure by Employer to perform its
obligations to Executive under this Agreement and (if such
failure can be cured) the failure by Employer to cure such
failure within ten (10) days after Employer receives written
notice thereof;
(ii) Employer's selling Subsidiary without the prior
written consent of Executive, which consent shall not be
unreasonably withheld;
(iii) Employer's filing a petition for relief under
any chapter of Title 11 of the United States Code or a
petition to take advantage of any insolvency laws of the
United States of America or any state thereof;
(iv) Employer's making an assignment for the benefit
of its creditors;
(v) Employer's consent to the appointment of a
receiver of itself or of the whole or any substantial part of
its property; or
(vi) Employer's filing a petition or answer seeking
reorganization under the Federal Bankruptcy Laws or any other
applicable law or statute of the United States of America or
any state thereof.
(c) Effect Of Termination. Upon Termination by Executive, in
accordance with Paragraph 6(a) hereof, all rights and obligations of
Employer and Executive hereunder shall terminate upon Termination,
subject to the following:
(i) Executive shall be entitled to receive all
salary, additional compensation and benefits which shall have
accrued prior to Termination and Employer's obligation for the
payment of salary, additional compensation and benefits shall
continue for the balance of the Term; and
(ii) All rights of Employer or Executive which shall
have accrued hereunder prior to Termination and all provisions
of this Agreement which are
6
to survive Termination hereunder shall survive Termination,
and Executive shall continue to be bound by such provisions in
accordance with their terms.
(d) Non-Renewal. Notwithstanding Paragraph 4, the Term shall
not be automatically renewed if Executive notifies Employer on or prior
to October 31, 2002 that Executive elects not to renew this Agreement.
7. Restrictive Covenant.
(a) Non-Competition. Executive agrees that, so long as he is
employed by Employer pursuant to this Agreement, and for one (1) year
following Termination, other than termination by Executive pursuant to
Paragraph 6(a) hereof or termination by Employer other than pursuant to
Paragraphs 5(a) and 5(f) hereof, Executive will not, directly or
indirectly, as a sole proprietor, member of a partnership, stockholder,
investor, officer or director of a corporation, or as an employee,
agent, associate or consultant of any person, partnership or
corporation other than Employer or in any other capacity:
(i) own, manage, operate, participate in, perform
services for or otherwise carry on a business similar to or
competitive with the business of Employer anywhere in the
world; provided that ownership of not more than five percent
(5%) of the issued and outstanding shares of a class of
securities of a corporation the securities of which are traded
on a national security exchange or in the over-the-counter
market shall not be deemed ownership of the issuer of such
shares for the purposes of this section;
(ii) induce or attempt to persuade any employee of
Employer to terminate such employment relationship in order to
enter into any such relationship with such person or to enter
into any such relationship on behalf of any other business
organization in competition with Employer or any of its
affiliates;
(iii) solicit any business related to the business
conducted by Employer from any clients, customers, or
prospective or former clients or customers of Employer, except
those originated and introduced to Employer solely by
Executive; or
(iv) perform services of any nature for any entity
which engages in or conducts any business that competes with,
restricts or interferes with the business of Employer.
7
(b) Injunctive Relief. Without limiting the right of Employer
or any of its successors or permitted assigns to pursue all other legal
and equitable rights available to them for violation of the covenants
set forth in Paragraph 7(a) hereof, it is agreed that such other
remedies cannot fully compensate Employer and its successors and
assigns for such a violation and that Employer and its successors and
assigns shall be entitled to injunctive relief, without bond, to
prevent violation or continuing violation hereof. It is the intent and
understanding of each party that if, in any action before any court or
agency legally empowered to enforce this covenant, any term,
restriction, covenant or promise is found to be unreasonable and for
that reason unenforceable, then such term, restriction, covenant or
promise shall be deemed modified to the extent necessary to make it
enforceable by such a court or agency.
8. Confidential Information.
(a) Definitions. "Confidential Information" means information
disclosed by Employer to Executive, or developed or obtained by
Executive during his employment by Employer or Banner Beef & Seafood
Co., Inc., either before the date or during the term of this Agreement,
provided that such information is not generally known in the business
and industry in which Employer operates or may subsequently operate,
relating to or concerning the business, projects, products, techniques
or methods of Employer, whether relating to research, development,
marketing, merchandising, selling or otherwise. Without limitation,
Confidential Information shall include all know-how, technical
information, ideas, concepts and processes relating to the products of
Employer, whether now existing or hereafter developed, and all prices,
customer names and customer lists but shall exclude the names of
customers known to Executive prior to the effective date hereof.
(b) Non-Disclosure. Executive agrees that, during the Term or
while Executive shall receive compensation hereunder and after
Termination for so long as the Confidential Information shall not be
generally known or generally disclosed (except by Executive or by means
of wrongful use or disclosure) but not after the expiration of the
restrictions set forth in Paragraph 7, Executive shall not use any
Confidential Information, except on behalf of Employer during the Term,
or disclose any Confidential Information to any person, firm,
partnership, employer, corporation or other entity, except as
authorized by the Board of Directors of Employer.
9. Writings and Working Papers.
Executive covenants and agrees that the following shall be and are the
sole and exclusive property of Employer: (i) any and all books, textbooks,
letters, pamphlets, drafts, memoranda or other writings of any kind written by
him for or on behalf of Employer or in the performance of Executive's duties
hereunder, (ii) Confidential Information referred to in
8
Paragraph 8 hereof, and (iii) all notes, records and drawings made or kept by
him of work performed in connection with his employment. Employer shall be
entitled to any and all copyrights or other rights relating to the above named
items. Executive agrees to execute any and all documents or papers of any nature
which Employer or its successors, assigns or nominees deem necessary or
appropriate to acquire, enhance, protect, perfect, assign, sell or transfer its
rights under this Paragraph 9. Executive also agrees that upon request he will
place all such notes, records and drawings in Employer's possession and will not
take with him without the written consent of a duly authorized officer of
Employer any notes, records, drawings, blueprints or other reproductions
relating or pertaining to or connected with his employment, business, books,
textbooks, pamphlets, documents work or investigations of Employer. The
obligations of this Paragraph 9 shall survive Termination.
10. Employee Stock Option Plan.
Executive shall be entitled to participate in the Company's 1997
Employee Stock Option Plan or any similar or replacement deferred compensation
or option plans as may be in effect from time to time during the Term, as
determined by the Company Board of Directors in its discretion.
11. Specific Enforcement.
Executive is obligated under this Agreement to render service of a
special, unique, unusual, extraordinary and intellectual character, thereby
giving this Agreement peculiar value so that the loss of such service or
violation by Executive of this Agreement could not reasonably or adequately be
compensated in damages in an action at law. Therefore, in addition to other
remedies provided by law, Employer shall have the right during the Term of this
Agreement (or thereafter with respect to obligations continuing after
Termination) to compel specific performance hereof by Executive or to obtain
permanent and temporary injunctive relief, without any bond, against violations
hereof by Executive. The prevailing party will be entitled to recover all costs
and expenses incurred by him or it in connection therewith, including reasonable
attorneys' fees.
12. Assignment.
The rights and duties of a party hereunder shall not be assignable by
that party, without the express written consent of the other party.
13. Binding Effect.
This Agreement shall be binding upon the parties hereto and their
respective successors in interest, heirs, personal representatives and permitted
assigns.
9
14. Severability.
If any provision of this Agreement or any part hereof or application
hereof to any person or circumstance shall be finally determined by a court of
competent jurisdiction to be invalid or unenforceable to any extent, the
remainder of this Agreement, or the remainder of such provision or the
application of such provision to persons or circumstances other than those as to
which it has been held invalid or unenforceable, shall not be affected thereby
and each provision of this Agreement shall remain in full force and effect to
the fullest extent permitted by law. The parties also agree that, if any portion
of this Agreement, or any part hereof or application hereof, to any person or
circumstance shall be finally determined by a court of competent jurisdiction to
be invalid or unenforceable to any extent, any court may so modify the
objectionable provision so as to make it valid, reasonable and enforceable.
15. Notices.
All notices, or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered personally or mailed,
certified mail, return receipt requested, postage prepaid, to the parties as
follows:
If to Employer: Terrace Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fishman, Merrick, Miller, Genelly,
Springer, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Executive: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Any notice mailed in accordance with the terms hereof shall be deemed
received on the third day following the date of mailing. Either party may change
the address to which notices to such party may be given hereunder by serving a
proper notice of such change of address to the other party.
10
16. Entire Agreement.
This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior
written or oral negotiations, representations, agreements, commitments,
contracts or understandings with respect thereto and no modification, alteration
or amendment to this Agreement may be made unless the same shall be in writing
and signed by both of the parties hereto.
17. Waivers.
No failure by either party to exercise any of such party's rights
hereunder or to insist upon strict compliance with respect to any obligation
hereunder, and no custom or practice of the parties at variance with the terms
hereof, shall constitute a waiver by either party to demand exact compliance
with the terms hereof. Waiver by either party of any particular default by the
other party shall not affect or impair such party's rights in respect to any
subsequent default of the same or a different nature, nor shall any delay or
omission of either party to exercise any rights arising from any default by the
other party affect or impair such party's rights as to such default or any
subsequent default.
18. Governing Law; Jurisdiction.
For purposes of construction, interpretation and enforcement, this
Agreement shall be deemed to have been entered into under the laws of the State
of Florida and its validity, effect, performance, interpretation, construction
and enforcement shall be governed by and subject to the laws of the State of
Florida without regard to its conflicts of law rules or principles.
19. Jurisdiction and Venue.
Any and all suits for any and every breach of this Agreement may be
instituted and maintained in any court of competent jurisdiction in the State of
Florida and the parties hereto consent to the jurisdiction and venue in such
court and the service of process by certified mail to the addresses for the
parties provided for notices herein.
11
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
COMPANY:
Terrace Holdings, Inc.
By:_____________________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
SUBSIDIARY:
Banner Beef & Seafood, Co., Inc.
By:__________________________________
Its__________________________________
EXECUTIVE:
______________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
12