Exhibit 10.14
SEPARATION AND SETTLEMENT AGREEMENT
This Separation and Settlement Agreement (the "Agreement") is made and entered
into by and between ▇▇▇▇▇▇▇▇▇▇▇ ▇. New (the "Employee") and Galaxy Nutritional
Foods, Inc., a Florida corporation (the "Company").
W I T N E S S E T H :
- - - - - - - - - - -
WHEREAS, Employee was employed by the Company as its Chief Marketing
Officer and Vice President of Strategy and currently is employed by the Company
as its Chief Executive Officer;
WHEREAS, Employee is also a member of the Corporation's Board of
Directors (the "Board");
WHEREAS, Employee and the Company enter into this Agreement in
connection with the Employee's resignation.
NOW THEREFORE, in consideration of the premises and mutual promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is agreed as follows:
1. Separation Date. Employee hereby resigns from his employment with the Company
and his position on the Board effective the date hereof (the "Separation Date").
2. Confidentiality of Company Information. Employee understands and agrees that
in the course of his employment with the Company, Employee has acquired
confidential information and trade secrets concerning the operations of the
Company, the Company's owners, parents, subsidiaries and affiliates
(collectively, the "Companies") and the Companies' personnel, future plans,
finances, products, customers, suppliers and methods of doing business, which
information Employee understands and agrees would be extremely damaging to the
Companies if disclosed to a competitor or made available to any other person or
corporation. Employee understands that such information has been divulged to
Employee in confidence and Employee agrees that Employee will keep such
information about the Company secret and confidential, except (a) as may be
required to effectuate the purposes herein, (b) as may be necessary to enforce
the terms of this Agreement, or (c) as may be required to be disclosed by a
court or governmental authority, provided that the Employee will provide the
Company prompt notice of a court's or governmental authority's request for such
disclosure.
Except (a) as may be required to effectuate the purposes herein, (b) as
may be necessary to enforce the terms of this Agreement, or (c) as may be
required to be disclosed by a court or governmental authority, Employee agrees
that any and all information which Employee has made, developed, originated or
acquired either individually or jointly with any other person or persons at any
time during the period of employment by the Companies prior to the Separation
Date, which relates in any way to the business or type of business engaged in by
the Companies is the property of the Companies and is to be kept confidential,
unless such information is or becomes generally available to the public other
than as a result of an improper disclosure by Employee. Such information
includes, but is not limited to all of the Company's concepts, techniques,
processes, systems, devices, charts, manuals, price lists, payroll,
administrative methods and information and improvements thereto; the names and
identities of all of the Company's clients, owners, lenders, purchasers and
suppliers; the names, addresses, telephone number, qualifications, education,
accomplishments, experience and resumes of all persons who are employed by the
Company, for either or both permanent and temporary jobs, the Company's job
order specifications; and all other information or materials which may give a
competitive advantage to a competitor of the Company (collectively, to the
extent such information is not or does not become generally available to the
public other than as a result of an improper disclosure by Employee,
"Confidential Information"). Employee agrees not to reveal, divulge or make
known to any person, firm or corporation such Confidential Information and
understands that if he discloses to others, uses for his own benefit or for the
benefit of any person or entity other than Companies, copies or makes notes of
any such Confidential Information, such conduct will constitute a breach of this
Agreement. Notwithstanding the foregoing, the Employee shall not be prohibited
from doing business with Company lenders, suppliers or vendors so long as such
business is not of a competitive nature with the Company and so long as such
business does not involve or relate to or make use of the Company's proprietary
and confidential information described above.
3. No Disparagement. The parties agree they will not make any oral or written
statement or take any other action which disparages or criticizes the other
party. Specifically, Employee agrees that Employee will not make any oral or
written statement or take any other action which disparages or criticizes the
products, operations, administration, employees, management, officers,
shareholders or directors of the Companies. The parties agree that in response
to any third party inquiries that the parties may state such separation was on
friendly terms. Any action by either party which disparages or criticizes the
other party at any time in the future will entitle the other party to seek an
injunction for any further breach of this provision, in addition to all other
legal and equitable remedies available to the other party.
4. Return of Records. Employee agrees that all correspondence, drawings,
reports, ideas, manuals, letters, data, notes, analyses, sales information,
personnel information, notebooks, reports, charts, programs, proposals, legal
agreements, files, memoranda, records, computer generated information, disks,
software and any other documents whether originals or copies, or property
concerning the Company's customers, business, finances or products or processes,
whether or not prepared by and in the course of employment, alone or in
conjunction with others, together with any credit cards, cell phones, laptop
computers and other physical and personal property which Employee received from
the Company or which Employee generated in connection with his employment by the
Company, which are in Employee's possession, custody or control, are the sole
property of the Company. Employee further warrants that he has turned over to
the Company, any such documents or property in his possession, custody or
control or will do so on or before July 20, 2004. Furthermore, on or before July
20, 2004 Employee will execute and deliver a certificate representing and
warranting that all such Company property has been returned to the Company.
Employee understands that no amounts due Employee under paragraph 10 shall be
payable to Employee until such certificate is executed and delivered to the
Company.
5. Release. As a material inducement to the Company to enter into this
Agreement, Employee hereby irrevocably and unconditionally releases, acquits and
forever discharges the Company and each of the Company's owners, predecessors,
successors, assigns, agents, directors, officers, employees, representatives,
attorneys, divisions, parents, subsidiaries, affiliates (and the agents,
directors, officers, employees, representatives, and attorneys of such
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companies, divisions, subsidiaries, and affiliates), and all persons acting
through, under, or in concert with any of them ("Releasees"), or any of them,
from any and all charges, complaints, claims, liabilities, obligations,
promises, agreements, controversies, damages, actions, causes of action, suits,
rights, demands, costs, losses, debts, and expenses (including attorneys' fees
and costs actually incurred) of any nature whatsoever, known or unknown,
suspected or unsuspected, including, but not limited to the following:
i. rights arising out of alleged violations of any contracts,
expressed or implied, any covenant of good faith and fair
dealing, expressed or implied;
ii. any tort;
iii. any legal restrictions on the Company's right to terminate
employees; or
iv. any federal, state, or other governmental statute, regulation,
or ordinance, including, without limitation, Title VII of the
Civil Rights Act of 1964, as amended; the Federal Age
Discrimination in Employment Act; the Federal Older Workers
Benefit Protection Act; the Federal Americans with
Disabilities Act; the Family Medical Leave Act; the Fair Labor
Standards Act; the Federal Equal Pay Act; the Fair Credit
Reporting Act, The Employee Retirement and Income Security
Act, Chapter 760, Florida Statutes; Chapter 448, Florida
Statutes; and any other federal, state or local law, statute
or ordinance applicable to the employment relationship between
the parties
(all of the foregoing collectively "Claim" or "Claims"), which Employee now has,
or has ever had, or ever will have, against each or any of the Releasees, by
reason of any and all acts, omissions, events, circumstances, or facts existing
or occurring up to the date hereof. Employee further agrees to never file a
lawsuit asserting any Claims that are released in this Agreement.
As a material inducement to Employee to enter into this Agreement, the
Company hereby irrevocably and unconditionally releases, acquits and forever
discharges Employee from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts, and expenses (including
attorneys' fees and costs actually incurred) of any kind or nature whatsoever,
whether known or unknown, suspected or unsuspected, which any of the Companies
(i) now has, owns or holds, (ii) has at any time heretofore owned or held, or
(iii) may hereafter hold in the future against the Employee or his affiliates,
by reason of, arising from, in connection with, or in any way pertaining to all
acts, omissions, events, circumstances, or facts existing or occurring up to the
date hereof except for any criminal or willful misconduct by Employee. The
Companies and their respective successors or assigns shall hold harmless and
indemnify the Employee against any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, debts, and expenses
(including attorneys' fees and costs actually incurred) of any nature
whatsoever, known or unknown, suspected or unsuspected, in each case by reason
of, in connection with, or relating to the fact that Employee was an officer or
director of one or more of the Companies for matters arising during such service
by Employee to the fullest extent required or permitted by the Company's
Certificate of Incorporation, Bylaws or the Company's Officers and Directors
Liability Insurance. Nothing herein shall be deemed to expand the liability or
obligations of the Company to Employee beyond those set forth in the Certificate
of Incorporation, Bylaws or the Officers and Directors Liability Insurance.
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Notwithstanding the foregoing, this Agreement does not preclude
Employee or the Company from asserting claims against the other party which may
be required in order to enforce any rights under this Agreement.
6. Injunction. In view of the nature of Employee's employments, Employee agrees
that the Company would be irreparably harmed by any violation, or threatened
violation of this Agreement and that, therefore, the Company shall be entitled
to an injunction prohibiting Employee from any violation or threatened violation
of this Agreement. This right shall be in addition to and not by way of
limitation of any other legal or equitable remedies to which the Company may be
entitled, including, but not limited to, the right of the Company to seek
recovery or set off of any and all consideration paid to Employee under this
Agreement in the event Employee breaches this Agreement or this Agreement is
held invalid.
7. Employee Understanding. Employee represents and agrees as follows:
i. Employee is advised to consult with an attorney. Employee
fully understands Employee's right to discuss and review all
aspects of this Agreement with Employee's attorney or any
other advisor and has had adequate time and opportunity to do
so;
ii. To the extent, if any, that Employee desired to do so,
Employee has availed himself of this right;
iii. Employee has carefully read and fully understands all of the
provisions of this Agreement;
iv. Employee is voluntarily entering into this Agreement; and
v. Employee is not relying on any representations or statements
by the Company or its representatives which are not contained
in this Agreement.
8. Lack of Wrongful Actions. This Agreement shall not in any way be construed as
an admission by the Company that it has acted wrongfully with respect to
Employee or any person, or that Employee has any rights whatsoever against the
Company, and the Company specifically disclaims any liability to or wrongful
acts against Employee or any other person, on the part of itself, its employees,
or its or their agents.
9. Cooperation. Employee agrees at no expense to Employee to reasonably and
fully cooperate with the Company in connection with and as necessary to
effectuate the orderly transition of Employee's duties, to provide advice
regarding matters related to Employee's duties, to aid in defending or
prosecuting any claims or litigation by or against Company or related to
Employee's duties for the Company for the 9 months following the date of this
Agreement. Company shall advance Employee his out of pocket reasonable necessary
and ordinary expenses, if any, in complying with this paragraph.
10. Payment to Employee.
A. The Company shall pay Employee the full amount of his severance pay
which shall be two years of his base salary in the total amount of Four Hundred
Twenty Thousand Dollars ($420,000), subject to customary withholding or
deductions by the Company as wages in lieu of notice which amount shall be
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payable over a two year period on the Company's regular payroll dates commencing
on July 21, 2004.
B. In addition, the Company agrees (1) to pay Employee $1,000, (2) to
either cover Employee and his family under the Company health care plan or
reimburse Employee his premium payments for COBRA coverage for the six months
commencing July, 2004 and ending December, 2004 and (3) notwithstanding any
provision to the contrary, to continue in full force and effect as if he was
employed by the Company, Employee's stock option rights in the manner and to the
extent provided in that certain Non-Qualified Stock Option Agreement dated
December 5, 2002 and that certain Non-Qualified Stock Option Agreement dated
July 16, 2001. This sum and these rights and concessions are in full and
complete settlement of all claims by Employee against the Company and constitute
consideration for Employee's release and other agreements herein and are
payments and rights to which Employee would not otherwise be entitled.
All amounts due Employee under paragraph A and paragraph B (1) and (2)
above shall be immediately due and payable to Employee in the event (1) of a
sale, lease or other disposition of all or substantially all of the assets of
the Company or (2) the Company files a petition in bankruptcy or otherwise seeks
liquidation or dissolution.
11. Invalid Provision. The invalidity or unenforceability of a particular
provision or portion thereof in this Agreement shall not effect the other
provisions or portion hereof, and if any one of them is found to be
unenforceable, the other provisions shall remain fully valid and enforceable as
if such invalid or unenforceable provisions were omitted.
12. Waiver or Modification and Construction. No waiver or modification of this
Agreement or of any covenant, condition, or limitation herein contained shall be
valid unless in writing and duly executed by the party charged therewith.
13. Complete Agreement. This written Agreement contains the sole and entire
agreement between the parties as to the matters contained herein, and fully
supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.
14. Binding Effect of Agreement. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, successors,
assigns and legal representatives.
15. Waiver. No failure of any party to exercise any power given such party
hereunder or to insist upon strict compliance by any party with its obligations
hereunder, and no custom or practice of the parties in variance with the terms
hereof shall constitute a waiver of the parties' right to demand exact
compliance with the terms hereof.
16. Governing Law. This Agreement and the performance hereunder and all suits
and special proceedings hereunder shall be governed by, and construed in
accordance with, the laws of the State of Florida. All actions under this
Agreement shall be taken in a court of competent jurisdiction within the county
in the State of Florida in which the Company's principal place of business is
located and Employee hereby waives and agrees that he shall not assert that such
forum is inconvenient.
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17. Attorneys' Fees. In the event that any party is required to commence or
defend any action or proceeding against the other in order to enforce the
provisions hereof or to challenge the provision hereof, the prevailing party in
such action shall be entitled to recover, in addition to any amounts or relief
otherwise awarded, all reasonable costs incurred in connection therewith,
including attorneys' fees, costs, and expenses for any action or proceeding or
appeal thereof.
18. Counterparts and Facsimile Signatures. This Agreement may be executed in
counterparts which together shall constitute a single document. This Agreement
may be executed and delivered with facsimile signatures which shall for all
purposes be deemed originals.
IN WITNESS WHEREOF, the parties have executed this Agreement in
counterparts effective on the 8th day of July, 2004.
"Company"
GALAXY NUTRITIONAL FOODS, INC.
Witness:
----------------------------- By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Print Name: --------------------------------
-------------------------- Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Witness: As its: Chairman of the Board
----------------------------- ------------------------
Print Name: Date: July 8, 2004
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"Employee"
▇▇▇▇▇▇▇▇▇▇▇ ▇. NEW
Witness:
----------------------------- By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. New
Print Name: --------------------------------
-------------------------- Date: July 8, 2004
------------------------
Witness:
-----------------------------
Print Name:
--------------------------