SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
______________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
______________________________
Date of Report (Date of earliest event reported): October 10, 1995
GALAXY FOODS COMPANY
(Exact Name of Registrant as Specified in Charter)
Delaware 0-16251 25-1391475
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2441 Viscount Row 32809
Orlando, Florida (zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (407) 855-5500
<PAGE>
Item 1. Changes in Control of Registrant.
Not applicable.
Item 2. Acquisition or Disposition of Assets.
See Item 5.
Item 3. Bankruptcy or Receivership.
Not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
Not applicable.
Item 5. Other Events.
As of October 10, 1995, Galaxy Foods Company (the ``Company'') entered
into an Employment Agreement (the ``Agreement'') with Angelo S. Morini, the
Company's President and Chief Executive Officer. The Agreement has a term
of five years and provides for an annual base salary of $250,000.00.
Additionally, Mr. Morini will receive an annual bonus in an amount equal to five
percent of the Company's pre-tax net income for book purposes, as
determined by the Company's independent certified public accounting firm.
Other material provisions of the Agreement are as follows:
1. Mr. Morini shall have the right to purchase (the ``Purchase
Rights'') up to 18,000,000 shares of the Company's common stock, $.01 par
value (the ``Common Stock''), at a per share price of 110% of the average
closing bid price as reported on the electronic inter-dealer quotation
system operated by Nasdaq, Inc. (the ``NASDAQ System'') for the ten trading
days preceding the receipt by the Company of written notice of Mr. Morini's
election to purchase shares. The purchase price for such shares may be
evidenced by a promissory note executed by Mr. Morini in favor of the
Company, which note shall bear interest at a rate at least equal to the
applicable federal rate established by the United States Internal Revenue
Service. The promissory note shall have a term of five years. Mr. Morini
shall have the option to extend the note for up to five additional years
provided that he pays at least one-third of the then accrued but unpaid
interest, with any remaining unpaid interest to be added to principal. Any
such promissory note shall be secured by a first priority security interest
in all shares purchased by Mr. Morini in conjunction with the exercise of
the Purchase Rights as evidenced by a stock pledge and security agreement
executed by Mr. Morini in favor of the Company.
2. Mr. Morini shall be granted certain options to purchase Common
Stock upon the Company's achievement of each of the following milestone
events:
Milestone Event Number of Options Granted
Reaching break-even for a 1,000,000
calendar quarter
Annual net operating income 1,000,000
of $1,000,000 or more
Each increment of $1,000,000 1,000,000
of annual net operating income
in excess of $1,000,000
Each of the options granted as aforesaid shall have a term of five
years from the date granted and shall be exercisable in whole or in part
upon the delivery by Mr. Morini to the Company of written notice of
exercise. The exercise price for each of the options shall be the closing
bid price of the Company's Common Stock on the trading day immediately
preceding the Company's achievement of the related milestone event as
established by the NASDAQ System.
The exercise price for any such option shares may be evidenced by a
promissory note executed by Mr. Morini in favor of the Company and bearing
interest at a rate at least equal to the applicable federal rate
established by the United States Internal Revenue Service. The promissory
note shall have a term of five years. Mr. Morini shall have the option to
extend the note for up to five additional years provided that he pays at
least one-third of the then accrued but unpaid interest, with any remaining
unpaid interest to be added to principal. Any such promissory note shall
be secured by a first priority security interest in all shares purchased by
Mr. Morini in conjunction with the exercise of the options as evidenced by
a stock pledge and security agreement executed by Mr. Morini in favor of
the Company.
3. The Agreement is terminable by Mr. Morini upon the delivery of
written notice of termination in the event that a majority of the Company's
Board of Directors is at any time comprised of persons for whom Mr. Morini
did not vote in his capacity as a director or a shareholder of the Company
(a ``Change of Control''). If Mr. Morini abstains from voting for any
person as a director, such abstention shall be deemed to be an affirmative
vote by Mr. Morini for such person as a director.
4. If the Agreement is terminated, regardless of the reason for such
termination, Mr. Morini shall be entitled to retain all unexercised
Purchase Rights and options granted under the Agreement and all shares of
Common Stock issued in connection with the exercise of such Purchase Rights
and options, and shall receive all earned but unpaid base salary through
the effective date of termination and all accrued but unpaid bonuses for
the fiscal year(s) ending prior to the effective date of termination.
Additionally, in the event that Mr. Morini's employment is terminated
without cause or due to his death, total disability or legal incompetence,
or if Mr. Morini terminates his employment upon a Change of Control, the
Company shall pay to Mr. Morini or his estate severance pay equal to three
times the amount of Mr. Morini's annual base salary (before deductions for
withholding, employment and unemployment taxes), and a bonus for the year
of termination and the following two years equal to the average of the two
bonuses paid to Mr. Morini under the Agreement.
5. In the event of a Change of Control, Mr. Morini may, at any time
thereafter, require that the Company purchase up to 1,638,564 shares of his
Common Stock at a purchase price of $.50 per share, subject to adjustment
for any increase or decrease in the number of outstanding shares of the
Company's Common Stock or in the event that the Common Stock is changed
into or exchanged for a different number or class or kind of shares or
securities of the Company, by reason of merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, stock
split, combination of shares, exchange of shares, change in corporate
structure or the like.
6. The Company extended the maturity date of that certain Promissory
Note dated as of November 4, 1994, executed by Mr. Morini in favor of the
Company in the principal amount of $1,200,000 in conjunction with his
exercise of options previously granted by the Company for two additional
years until November 4, 2001.
7. Mr. Morini has agreed that in the event he voluntarily terminates
his employment with the Company or if he is terminated for ``cause'' (as
defined in the Agreement), he will not compete with the Company for a
period of one year following the date of termination of his employment with
the Company, whether as an employee, officer, director, partner,
shareholder, consultant or independent contractor in any business
substantially similar to that conducted by the Company within those areas
in the United States in which the Company is doing business as of the date
of termination.
As of October 11, 1995, Mr. Morini exercised the Purchase Rights with
respect to all 18,000,000 shares of Common Stock subject thereto (the
``Purchase Right Shares''). In connection with the exercise of such
Purchase Rights, Mr. Morini executed in favor of the Company a balloon
promissory note (the ``Note'') in the principal amount of $11,572,200.00.
The Note bears interest at the rate of seven percent per annum and is due
and payable in full on October 11, 2000, subject to Mr. Morini's option to
extend the Note for up to five additional years provided that he pays at
least one-third of the then accrued but unpaid interest, with any remaining
unpaid interest to be added to principal. In order to secure the Note, Mr.
Morini executed in favor of the Company a stock pledge and security
agreement pursuant to which Mr. Morini granted the Company a first priority
security interest in all of the Purchase Right Shares.
Item 6. Resignations of Registrant's Directors.
Not applicable.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
Exhibit 10.83 Employment Agreement dated as of October 10, 1995, by
and between Galaxy Foods Company and Angelo S. Morini
Exhibit 10.84 Balloon Promissory Note dated as of October 11, 1995, by
Angelo S. Morini in favor of Galaxy Foods Company
Exhibit 10.85 Stock Pledge and Security Agreement dated as of October
11, 1995, by and between Galaxy Foods Company and Angelo S. Morini
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
GALAXY FOODS
COMPANY
October 10, 1995
By: /s/ Angelo S. Morini
Name: Angelo S. Morini
Title: President
<PAGE>
Exhibit 10.83 Employment Agreement dated as of October 10, 1995, by
and between Galaxy Foods Company and Angelo S. Morini
<PAGE>
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into
this 10th day of October, 1995 by and between GALAXY FOODS COMPANY, a
Delaware corporation (the "Corporation"), and ANGELO S. MORINI (the
"Executive").
P R E M I S E S :
The Executive has been employed by the Corporation for a number of years
and is presently serving as the chief executive officer of the Corporation.
The Corporation wants to ensure that it will have the continued benefit
of the services of the Executive for a substantial period of time.
In order to accomplish the foregoing, the Corporation and the Executive
are willing to enter into this Agreement providing for the continuation of
the Executive's employment upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the continued employment of the
Executive by the Corporation and other valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:
1. Employment. The Corporation hereby agrees to employ the
Executive and the Executive hereby agrees to continue to provide his
services to the Corporation on the terms and conditions set forth herein.
2. Position and Duties. The Corporation employs the Executive as
its President and Chief Executive Officer to perform such services relevant
to the operation and business of the Corporation as the Board of Directors
of the Corporation (the "Board") may from time to time specify and the
Executive shall have such powers and duties as may from time to time be
prescribed by the Bylaws of the Corporation and the Board, provided that
such duties are consistent with his present duties and with his position as
the President and Chief Executive Officer of the Corporation.
3. Term. The term of this Agreement shall commence on the date
first written above and shall end on the date which is five (5) years after
such date, unless sooner terminated in accordance with the terms of
paragraph 6 of this Agreement.
4. Compensation.
(a) Base Salary. The Corporation shall pay a base salary
of Two Hundred and Fifty Thousand and No/100 Dollars ($250,000.00) per
annum to the Executive during the term of this Agreement (the "Base
Salary"). The Base Salary shall be paid in equal monthly installments,
after deducting applicable state and federal income taxes required to be
withheld, social security taxes and other employment and unemployment
taxes.
(b) Bonus. To provide greater incentive for the Executive
by rewarding him with additional compensation above and beyond the Base
Salary, the Corporation shall pay to the Executive, within ninety (90) days
after the end of the Corporation's applicable fiscal year, an annual bonus
with respect to each fiscal year in which the Executive is employed
hereunder in an amount equal to five percent (5%) of the Corporations pre
- -tax net income for book purposes, as determined by the Corporation's
outside certified public accounting firm. The Corporation shall deduct
from the bonus applicable income tax withholding, and employment and
unemployment taxes.
(c) Expenses. During the term of this Agreement, the
Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by him in connection with his employment by
the Corporation.
(d) Participation in Benefits Plans. During the term of
this Agreement, the Executive shall be entitled to participate in or
receive benefits under any employee benefit plans and arrangements which
are from time to time made available to the key management employees of the
Corporation, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements.
Nothing paid to the Executive under any plan or arrangement presently in
effect or made available in the future shall be deemed to be in lieu of
the Base Salary or bonuses payable to the Executive hereunder.
(e) Vacations. The Executive shall be entitled to four
weeks of paid vacation annually and shall be entitled to holidays in
accordance with the Corporation's policy in effect from time to time for
its key management employees.
(f) Life Insurance. The Corporation shall obtain and
maintain in effect during the term hereof a life insurance policy or
policies on the life of the Executive in a total face amount of two million
dollars ($2,000,000.00), the beneficiary or beneficiaries of which shall be
designated (and shall be changeable) by the Executive from time to time.
(g) Automobile. The Corporation shall furnish to the
Executive for his exclusive use an automobile (a Lexus LS 400 or other
vehicle of comparable price) selected by him, which shall be replaced, at
his request, with a comparable automobile every two (2) years.
(h) Legal Expenses. The Corporation shall pay the legal
fees and expenses incurred by the Executive in connection with the
preparation of this Agreement.
5. Right and Options to Purchase Stock.
(a) Stock Purchase Right. To induce the Executive to
enter into this Agreement, the Corporation has, contemporaneously with its
approval of this Agreement, approved the Executive's purchase at any time
of 18,000,000 shares of the Corporation's $.01 per share par value common
stock ("Common Stock"). The Executive may exercise such right to purchase
all or any part of such shares (the "Rights") from time to time. The
Rights shall be exercised from time to time by giving written notice of
exercise to the Corporation. The price per share for any shares of Common
Stock purchased pursuant to exercise of the Rights shall be an amount equal
to one hundred and ten percent (110%) multiplied by the average of the
"market prices" for the Common Stock for the last ten (10) trading days
preceding the date of such written notice. The "market price" for each
trading day is the closing bid price on the electronic dealer quotation
system operated by Nasdaq, Inc. commonly known as the "NASDAQ System" or
any national stock exchange on which the Common Stock is then listed. The
purchase price for the shares of Common Stock purchased by the Executive
pursuant to the Rights shall be evidenced by a promissory note payable on
the same terms and secured in the same manner as provided for the Options
described in subparagraph (b) below.
(b) Stock Options. In addition to the Rights, the
executive shall also have the option to purchase shares of Common Stock
(the "Options") upon the Corporation's achieving each of the following
milestone events:
Milestone Event
Option Shares
1) Reaching break-even for a calendar quarter 1,000,000
2) Annual net operating income of $1 million or more 1,000,000
3) Each increment of $1 million of annual net
operating income in excess of $1 million 1,000,000
Each such option shall vest upon the occurrence of the milestone event.
The Board shall determine whether and when any of the milestone events are
achieved in the exercise of its reasonable discretion with assistance from
the Corporation's certified public accountants. The Corporation's "net
operating income" for purposes of the Options shall be determined under
generally accepted accounting principles consistently applied.
The purchase price for the shares under each exercise of the Options
shall be the market price for the Common Stock on the last trading day
preceding the date of the particular milestone event, i.e. the closing bid
price on such day on the electronic dealer quotation system operated by
Nasdaq, Inc. commonly known as the "NASDAQ System" or any national stock
exchange on which the Common Stock is then listed.
Each of the Options shall have a term of five (5) years from the date
granted and shall be exercisable in whole or in part, by giving the
Corporation written notice of exercise. Upon exercise of any of the
Options the notice of exercise shall be accompanied by the Executive's
executed promissory note in payment for such shares in a principal amount
equal to the purchase price and pledge agreement under which the shares
purchased are pledged to the Corporation to secure the Executive's
promissory note. Such note shall bear interest at the "applicable federal
rate" on the date of exercise and shall be due in full five (5) years after
the date of the note. The Executive may extend the term of the note for up
to five years at his sole option, provided that at the time of extension
the Executive pays at least one-third of the then accrued but unpaid
interest, with any remaining unpaid interest to be added to principal.
(c) Sufficient Shares. At all times while any of the
Rights or the Options remain unexercised in whole or in part, the
Corporation shall have authorized and reserve for issuance pursuant to the
Rights and the Options a number of shares of Common Stock required to
fulfill the Corporation's obligations under this paragraph 5.
(d) Adjustment of Options. The number of shares of
Common Stock which are subject to the Options shall be adjusted in the
event that at any time after the date of this Agreement the number of
outstanding shares of the Common Stock is increased or decreased or changed
into or exchanged for a different number or class or kind of shares or
securities of the Corporation, by reason of a merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, stock
split, combination of shares, exchange of share, change in corporate
structure or the like.
6. Termination.
(a) Cause. The Corporation may terminate the Executive's
employment under this Agreement for cause. For purposes of this Agreement,
the Corporation shall have "cause" to terminate the Executive's employment
hereunder upon (i) a willful, continuing material breach by the Executive
of any provision of this Agreement; (ii) the Executive's continuing refusal
to comply with reasonable policies adopted from time to time by the Board;
(iii) the Executive's continuing failure to carry out lawful duties from
time to time assigned to the Executive by the Board that are consistent
with the Executive's position as chief executive officer; (iv) the
Executive's total disability for a continuous period of six (6) months or
more, (v) the Executive's being declared legally incompetent by a court of
competent jurisdiction; or (vi) the conviction of the Executive of a
felony. Prior to terminating the Executive's employment pursuant to clause
(i), (ii) or (iii) of this subparagraph (a), the Corporation shall give the
Executive written notice of the proposed termination of his employment in
which the basis for the alleged "cause" for termination is stated in
reasonable detail and the Executive shall have a full and fair opportunity
to be heard in person at a meeting of the Board. For purposes of this
paragraph, no act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or admitted to be done, by the Executive
in bad faith and without reasonable belief that such action or omission was
in the best interest of the Corporation. For the purposes hereof, the
Executive shall be deemed to be totally disabled if he is unable by reason
of illness or injury to perform after the injury or illness any of the
duties he performed for the Corporation prior to the illness or injury.
(b) Death. The Executive's employment under this
Agreement shall terminate automatically upon the death of the Executive.
(c) By the Executive. The Executive may terminate his
employment under this Agreement by giving the Corporation written notice of
termination in the event that a change of control of the Corporation
occurs. For the purposes hereof, a "change of control" of the Corporation
means that a majority of the Board is comprised of persons for whom the
Executive did not vote in his capacity as a director or a shareholder of
the Corporation; provided that if the Executive abstains from voting for
any person as a director, such abstention shall be deemed to be an
affirmative vote by the Executive for such person as a director.
(d) Effect of Termination. Upon the effective date of any
termination of the Executive's employment under this Agreement as provided
for in this paragraph 6, the Executive or his estate, as the case may be,
(i) shall be entitled to retain any and all of the Rights granted to the
Executive under subparagraph 5(a), (ii) shall be entitled to retain all
vested Options granted to the Executive under subparagraph 5(c), (iii)
shall be entitled to all unpaid Base Salary through the effective date of
termination and, (iv) shall be entitled to receive any accrued and unpaid
bonuses for the fiscal year(s) ending prior to the effective date of
termination.
In the event the Executive's employment is terminated by the Corporation
without cause or terminates due to his death or total disability or because
he is declared legally incompetent or if the Executive terminates his
employment following a change of control of the Corporation, the
Corporation shall pay to the Executive or his estate, as applicable (a)
within thirty (30) days after the effective date of termination, severance
pay in an amount equal to three (3) times the amount of the Executive's
Annual Base Salary (before deductions for withholding, employment and
unemployment taxes) immediately prior to the termination of his employment,
and (b) a bonus for the year of termination and the next two (2) years
thereafter which shall be equal to the average of the last two (2) annual
bonuses which were previously accrued for the Executive under this
Agreement. Any severance pay and bonuses payable pursuant to clauses
(a) and (b) above shall be reduced by all required withholding for
insurance and taxes. Any such bonus shall be paid to the Executive or his
estate, as the case may be, at the time and in the manner as any such bonus
would otherwise be due and payable hereunder. Finally, except where the
Executive's employment is terminated for a "cause" specified in clauses
(i), (ii), (iii) or (vi) of subparagraph 6(a) or by reason of his death or
voluntarily by Executive (except for voluntary termination following a
change in control of the Corporation), the Executive will also be entitled
to all of the benefits he would otherwise be entitled to under subparagraph
4(d) for a period of three (3) years after the date of termination.
All of the provisions of this subparagraph (d) shall survive the
termination of this Agreement.
7. Change of Control - Put Right. In the event that at any time a
"change of control" (as defined in subparagraph 6 (c)) of the Corporation
occurs, the Executive may at any time thereafter require that the
Corporation purchase up to 1,638,564 shares of his common stock for a cash
purchase price of fifty cents ($.50) per share (the "Put). The Put shall
be exercisable from time to time by the Executive's giving the
Corporation written notice of exercise in the manner specified herein for
giving notices in which the Executive shall state the number of shares of
Common Stock as to which the Put is then exercised. The number of shares
of Common Stock subject to the Put and the fifty cents ($.50) per share
purchase price shall be appropriately adjusted in the event that at any
time after the date of this Agreement the number of outstanding shares of
the Corporation's Common Stock is increased or decreased or changed into or
exchanged for a different number or class or kind of shares or securities
of the Corporation, by reason of a merger, consolidation, reorganization,
recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate structure or
the like. The Put is granted to the Executive in recognition of the fact
that on December 9, 1993, the Executive, at a considerable personal
economic sacrifice to himself, invested $819,282 in the Corporation for
1,638,564 shares of Common Stock in order to prevent the Corporation's
common stock from being delisted by NASDAQ, the Corporation at the time
having fallen below NASDAQ's equity requirements for listing.
8. Modification of Existing Note. Pursuant to the exercise of a
prior option, the Executive purchased from the Corporation two million four
hundred thousand (2,400,000) shares of the Common Stock and delivered to
the Corporation his executed promissory note in the principal amount of one
million two hundred thousand dollars ($1,200,000) representing the
purchase price (the "Option Note"). The Corporation and the Executive
agree that the term of the Option Note is hereby extended for an additional
two (2) years. The provisions of this paragraph 8 shall survive any
termination of the Executive's employment with the Corporation and any
termination of this Agreement.
9. Noncompetition.
(a) During the term hereof, so long as the Executive
remains an employee of the Corporation, the Executive shall not be employed
in any capacity, whether directly or indirectly, by any person, firm,
corporation or entity engaged in a business which directly competes with
that of the Corporation.
(b) Further, the Executive agrees that if he voluntarily
terminates his employment relationship with the Corporation in breach of
this Agreement or his employment is terminated by the Corporation for
"cause" pursuant to subparagraph 6 a.(i), (ii), (iii) or (vi) hereof, then,
for a period of one (1) year following the date of termination of his
employment with the Corporation (the "Termination Date") (the
"Noncompetition Period"), he will not, for himself or on behalf of any
person, partnership, trust, corporation or other entity other than the
Corporation for whatever reason:
(1) engage, directly or indirectly (either as an employee,
officer, director, partner, shareholder, consultant or independent
contractor), in any business substantially similar to that carried on by
the Corporation as of the Termination Date within those areas in the
United States (the "Noncompetition Area") in which the Corporation is doing
business as of the Termination Date or in which, at the time of the
Termination Date, the Corporation contemplates doing business. The
Executive further agrees that during the Noncompetition Period he will not
be connected, directly or indirectly, with any person, firm or corporation
engaged in a business of the character now or hereafter carried on or
contemplated by the Corporation within the Noncompetition Area and that he
will not directly or indirectly be employed or become a partner, officer or
stockholder of any corporation engaged in such business within said
Noncompetition Area; or
(2) engage, directly or indirectly (either as an employee,
officer, director, partner, shareholder, consultant or independent
contractor), in providing services or products or offering to provide
products or services of the kind provided by the Corporation as of
the Termination Date for those customers or the Corporation for whom the
Corporation: (i) is engaged in providing services or products as of the
Termination Date, or (ii) has either provided services or products within
the six (6) month period prior to the Termination Date, or (iii) has
personally contacted, as of the Termination Date, for the purpose of
offering to provide services or products;
(c) If in any judicial proceeding, a court shall refuse to
enforce this Agreement, whether because the time limit is too long or
because the restrictions contained herein are more extensive (whether as to
geographic area, scope of business or otherwise) than is necessary to
protect the business and goodwill of the Corporation, it is expressly
understood and agreed between the parties hereto that this Agreement is
deemed modified to the extent necessary to permit this Agreement to be
enforced in any such proceedings.
(d) The Executive acknowledges that compliance with this
paragraph is necessary to protect the goodwill and other proprietary
interests of the Corporation and that a breach of this paragraph will give
rise to irreparable and continuing injury to the Corporation which may not
be adequately compensable in monetary damages or at law. Accordingly, the
Executive agrees that the Corporation, its successors and assigns may
obtain injunctive relief against the breach or threaten breach of the
foregoing provisions of this paragraph, in addition to any other legal
remedies which may be available to it under this Agreement. The Executive
further acknowledges that in the event of his termination of employment
with the Corporation his knowledge, experience and capabilities are such
that the Executive can obtain employment in business activities which are
of a different or noncompeting nature than those performed in the course of
employment with the Corporation, and that the enforcement of a remedy
hereunder by way of injunction will not prevent the Executive from earning
a reasonable livelihood.
10. Indemnification. In the event the Executive at any time is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including any action by or in the right of
the Corporation) by reason of, due to or arising out of the fact that he is
then or was previously a director, officer or employee of the Corporation,
or because of any action taken or omitted by the Executive in any of such
capacities, the Corporation agrees to indemnify the Executive against all
expenses (including reasonable attorney fees at all levels of proceedings)
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding,
provided that the Executive shall not be entitled to indemnification if a
court of competent jurisdiction in a final non-appealable decision
determines that the Executive acted in bad faith or, in the case of a
criminal matter, knew or should have known his conduct was unlawful. The
Executive's expenses incurred in defending against any such civil or
criminal action, suit or proceeding shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon
request of the Executive and the receipt of an unsecured undertaking by the
Executive to repay the amount paid by the Corporation if it is ultimately
determined by the court in a non-appealable decision that the Executive was
not entitled to indemnification pursuant to this Paragraph 10. The
indemnification provisions of this Paragraph 10 are non-exclusive and shall
not affect other indemnification rights the Executive has or may have under
Delaware law, the Articles of Incorporation of the Corporation, as amended,
and/or the Corporation's Bylaws from time to time in effect. The
provisions of this Paragraph 10 are a material inducement to the Executive
in entering into this Agreement and shall survive the expiration or
termination of this Agreement, shall continue in effect after the Executive
ceases to be an officer or a director of the Corporation and shall inure to
the benefit of the heirs, legal representatives and administrators of the
Executive. If any provision of this Paragraph 10 shall for any reason be
determined to be invalid, the other provisions hereof shall not be affected
and shall remain in full force and effect.
11. Return of Property and Records. On termination of his
employment, the Executive shall deliver all records, notes, data,
memoranda, models, equipment and property of any nature that are in the
Executive's possession or under his control and that are the property of
the Corporation or relate to the employment or to the business of the
Corporation.
12. Successors and Assigns. This Agreement and all rights hereunder
shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, heirs,
distributees, devisees, legatees and assignees and by the Corporation's
successors and assigns. However, the Executive's obligations as an
employee are personal in nature and, without the consent of the
Corporation, the Executive may not assign any of such obligations to any
other person.
13. Notice. Any notice or other communication hereunder to either
party shall be in writing and shall be deemed to have been given when
delivered personally or sent prepaid by commercial overnight courier or
mailed by registered mail, return receipt requested, postage prepaid to the
Executive at the last residence address of the Executive as reflected in
the Corporation's records, or in the case of the Corporation, to its
principal executive offices in Orlando, Florida or to its registered
office.
14. Modification or Waiver. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing, and is signed by the Executive and by
another executive officer of the Corporation. No waiver by either party
hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time.
15. Entire Agreement. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof,
have been made by either party which are not set forth expressly in this
Agreement. This Agreement supersedes all prior agreements between the
parties hereto with respect to the subject matter hereof.
16. Attorney Fees. In any action by either party to enforce this
Agreement or concerning any provision(s) hereof, the prevailing party in
such action shall be entitled to collect in such action from the non-
prevailing party all costs incurred by the prevailing party in connection
with such action, including reasonable attorney fees at the pretrial, trial
and appellate levels.
17. Governing Law. The validity, interpretation, construction and
performance of the Agreement shall be governed by the laws of the State of
Florida.
18. Validity. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement which shall remain
in full force and effect, nor shall the invalidity or unenforceability of a
portion of any provision of this Agreement affect the validity or
enforceability of the balance of such provisions.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
20. Headings. The headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation
of the Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
GALAXY FOODS
CORPORATION,
a Delaware Corporation
By:s/Angelo S. Morini
Its: Chairman, President and CEO.
ANGELO S. MORINI
<PAGE>
Exhibit 10.84 Balloon Promissory Note dated as of October 11, 1995, by
Angelo S. Morini in favor of Galaxy Foods Company
<PAGE>
BALLOON
PROMISSORY NOTE
Effective October 11, 1995
$11,572,200.00 Los Angeles, California
FOR VALUE RECEIVED, Angelo S. Morini ("Maker"), whose address
is 2441 Viscount Row, Orlando, Florida 32809, promises to pay to
GALAXY FOODS COMPANY, a Delaware corporation ("Lender"), whose
address is 2441 Viscount Row, Orlando, Florida 32809, the principal
sum of Eleven Million Five Hundred Seventy-two Thousand Two Hundred
and 00/100 Dollars ($11,572,200.00) in lawful money of the United
States, together with interest thereon at the rate of seven percent
(7%) per annum as follows:
On the fifth anniversary of the date of this Note or
such earlier date as Lender may declare upon default and
acceleration as herein contemplated (the "Maturity
Date"), the entire outstanding principal balance of this
Note and all accrued but unpaid interest thereon, shall
be due and payable in full.
The principal and any interest shall be payable at such place
outside the state of Florida as Lender, from time to time, may
designate in writing.
Maker shall have the right to prepay this Note, in whole or in
part, at any time without penalty, provided that any partial
prepayment shall be applied first to accrued but unpaid interest
and then to principal.
It is further understood that should Maker fail to make any
payment due hereunder within fifteen (15) days after the date on
which it shall fall due, or if there should be a default under the
Pledge Agreement (as defined hereinbelow) which secures this Note,
which default is not cured within any applicable cure period, this
Note shall be in default and Lender may at its option declare
immediately due and payable the entire unpaid balance of principal
and interest hereunder, and payment thereof may be enforced and
recovered in whole or in part at any time by one or more of the
remedies provided to Lender in this Note or by law. In such case,
Lender may also recover all costs of suit and other expenses in
connection therewith, together with a reasonable attorneys' fee for
collection, together with interest on any judgment obtained by
Lender at the lower of (i) eighteen percent (18%) per annum, or
(ii) the maximum legal rate (as defined below) by applicable law,
including interest at that rate from and after the date of any
execution, judicial or foreclosure sale until actual payment is
made to Lender of the full amount due Lender.
If any provision of this Note is held to be invalid or
unenforceable by a court of competent jurisdiction, the other
provisions of this Note shall remain in full force and effect and
shall be liberally construed in favor of Lender in order to effect
the provisions of this Note. In no event shall the rate of
interest payable hereunder exceed the maximum rate of interest
permitted to be charged by applicable law (including the choice of
law rules) (hereinafter the "Maximum Legal Rate") and any interest
paid in excess of the permitted rate shall be refunded to Maker.
Such refund shall be made by application of the excessive amount of
interest paid against any sums outstanding and shall be applied in
such order as Lender may determine. If the excessive amount of
interest paid exceeds the sums outstanding, the portion exceeding
the said sums outstanding shall be refunded in cash by Lender. Any
such crediting or refund shall not cure or waive any default by
Maker hereunder. Maker agrees, however, that in determining
whether or not any interest payable under this Note exceeds the
highest rate permitted by law, any non-principal payment,
including, without limitation, prepayment fees and late charges,
shall be deemed to the extent permitted by law, to be an expense,
fee, premium or penalty rather than as interest.
This instrument shall be governed by and construed according
to the laws of the State of Florida. Maker and Lender consent to
the exclusive jurisdiction of the courts of the State of Florida
and the federal courts located in Florida in any and all actions
and proceedings, whether arising hereunder. Maker and Lender
agree that venue for any action brought by Lender under this Note
shall be in Orange County, Florida.
Whenever used, the singular number shall include the plural,
the plural the singular, the use of any gender shall be applicable
to all genders, and the words "Lender" and "Maker" shall be deemed
to include the respective heirs, personal representatives,
successors and assigns of Lender and Maker.
This Note is secured by a Stock Pledge and Security Agreement
by and between Lender and Maker of even date herewith (the "Pledge
Agreement"), which governs the rights of the parties in connection
with collateral pledged to secure obligations hereunder (the
"Collateral"), and which allows Lender further rights, including
acceleration of the Maturity Date, upon the occurrence of a default
thereunder.
This Note may not be amended or modified, nor shall any waiver
of any provision hereof be effective, except by an instrument in
writing executed by Maker and Lender.
Maker, intending to be legally bound hereby, has caused this
Note to be executed as of the day and year first above written.
"MAKER"
s\Angelo S. Morini
Angelo S. Morini
Executed on October 11, 1995
<PAGE>
Exhibit 10.85 Stock Pledge and Security Agreement dated as of October
11, 1995, by and between Galaxy Foods Company and Angelo S. Morini
<PAGE>
STOCK PLEDGE AND SECURITY AGREEMENT
THIS STOCK PLEDGE AND SECURITY AGREEMENT (the
"Agreement"), is made and entered into as of the 11th day of
October, 1995, by and between ANGELO S. MORINI ("Debtor") and
GALAXY FOODS COMPANY, a Delaware corporation ("Secured Party").
W I T N E S S E T H:
This Agreement is made and entered into under the
following circumstances:
8. Pursuant to that certain Employment Agreement dated
as of October 11, 1995, by and between Secured Party and Debtor,
Secured Party granted to Debtor the right to purchase from Secured
Party (the "Purchase Right") certain shares of the Common Stock of
Secured Party (the "Shares").
9. Debtor has elected to exercise a portion of his
Purchase Right with respect to Eighteen Million (18,000,000) of the
Shares and, in order to evidence the payment of the purchase price
for the Shares obtained pursuant to such election, Debtor has
executed in favor of Secured Party a Promissory Note in the
original principal amount of Eleven Million Five Hundred Seventy-
two Thousand Two Hundred and 00/100 Dollars ($11,572,200.00) (the
"Note"), in order to evidence the consideration for the issuance of
the Shares.
10. Secured Party has required the execution and
delivery of this Agreement to provide security for the obligations
of Debtor under the Note.
NOW, THEREFORE, in consideration of the foregoing
premises, and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties agree as
follows:
11. Pledge of Shares. Debtor hereby pledges its
interest in the Shares as security for the payment of all amounts
required to be paid to Secured Party in accordance with the Note
and performance of all obligations of Debtor under the Note and
this Agreement. Secured Party shall have (and is hereby granted) a
security interest in the Shares (and the related certificates
evidencing such Shares) and all proceeds thereof and accessions
thereto, including, without limitation, all additional Shares
acquired by Debtor under the terms hereof (collectively, the
"Collateral") in order to secure the obligations of Debtor under
the Note and this Agreement. Simultaneously herewith, Debtor has
delivered to Secured Party the Shares, together with one or more
stock powers, duly endorsed in blank, to hold and administer
according to the terms hereof.
12. Ownership Rights. Unless a default has occurred
under the Note or this Agreement, Debtor shall have and enjoy all
rights and attributes relating to the pledged Shares delivered
hereunder, including, without limitation, all voting rights and
rights to dividends and other distributions in respect thereof.
13. Adjustments. In the event that, during the term of
this Agreement, any share dividend, reclassification, readjustment,
or other change is declared or made in the capital structure of
Debtor, all new, substituted, and additional shares, options or
other securities issued with respect to the pledged Collateral by
reason of any such change shall be delivered to and held by Secured
Party under the terms of this Agreement in the same manner as the
Collateral originally pledged hereunder.
14. Warrants and Rights. In the event that during the
term of this Agreement, subscription warrants or any other rights
or options shall be issued to or for the benefit of Debtor or
otherwise with respect to the Collateral, such warrants, rights and
options shall be immediately assigned and delivered by Debtor to or
retained by Secured Party, as the case may be, to secure the
obligations of Debtor under the Note and this Agreement.
15. Events of Default; Secured Party's Remedies. In
the event Debtor shall, following the date hereof, (a) fail to pay
to Secured Party any amount to become due as required to be paid by
the Note, or (b) default in any of its obligations under any of the
terms of the Note or this Agreement (each of the foregoing being an
"Event of Default"), upon the failure by Debtor to cure said
default within fifteen (15) days after receipt of written notice
thereof from Secured Party, Secured Party shall have the rights and
remedies provided in the Florida Uniform Commercial Code in effect
on the date of this Agreement (the "Code") and may (i) sell any
such Collateral in any manner provided under the Code, and the
proceeds of any such sale shall be applied first to the expenses of
such sale (including, but not limited to, reasonable attorneys'
fees incurred by Secured Party in connection with any such default
by Debtor), second to all amounts (interest first and then
principal) outstanding under the Note, and the balance, if any,
shall be paid to Debtor; or (ii) retain the Shares in satisfaction
of the unpaid indebtedness represented by the Note in accordance
with any provisions of the Code which allow such retention.
No delay or omission on the part of Secured Party in
exercising any right granted hereunder shall operate as a waiver of
such right or any other right. A waiver on any one occasion by
Secured Party shall not be construed as a bar to or waiver of any
right on any future occasion. All rights and remedies of Secured
Party, whether granted herein or by the Note, shall be cumulative
and may be exercised separately or concurrently.
16. Termination of Pledge; Release of Shares. The
pledge created hereby shall terminate upon the payment in full of
the Note and performance of all of Debtor's obligations under the
Note and this Agreement. Upon termination of the pledge created
hereby arising from such full payment and satisfaction of
obligations, Secured Party shall release its security interest in
the Collateral and shall release to Debtor the certificates and
stock powers relating thereto, and any other Collateral remaining
in Secured Party's possession.
17. Amendment. This Agreement may be amended at any
time by a writing which refers to this Agreement and is executed by
each of the parties hereto.
18. Complete Agreement. Except as expressly set forth
herein or in an instrument in writing signed by the party to be
bound thereby which makes specific reference to this Agreement,
this Agreement sets forth the entire understanding of the parties
hereto concerning the subject matter hereof, and supersedes all
prior contracts, arrangements, communications, discussions,
representations and warranties, whether oral or written, among the
parties relating to the subject matter of this Agreement.
19. Notices. All notices, requests, consents, and
other communications hereunder shall be in writing, shall be deemed
to have been duly given when received, if personally delivered, and
when mailed, if mailed by U.S. Certified or Registered Mail,
postage prepaid, and addressed as follows:
If to Debtor: ANGELO S. MORINI
2441 Viscount Row
Orlando, Florida 32809
If to Secured Party: GALAXY FOODS COMPANY
2441 Viscount Row
Orlando, Florida 32809
or to such other address or addresses as the party addressed may
from time to time designate to the others in writing.
20. Governing Law. This Agreement shall in all
respects be interpreted, governed by, and construed in accordance
with the laws of the state of Florida.
21. Severability. Each Section, subsection, and lesser
section of this Agreement constitutes a separate and distinct
undertaking, covenant, or provision hereof. In the event that any
provision of this Agreement shall finally be determined to be
unlawful, such provision shall be deemed limited by construction in
scope and effect to the minimum extent necessary to render the same
valid and enforceable, and, if such a limiting construction is not
possible, any such provision shall be deemed severed from this
Agreement, but every other provision of this Agreement shall remain
in full force and effect.
22. Third Parties. Nothing expressed or implied in
this Agreement is intended, or shall be construed, to confer upon
or give any other person or entity other than the parties hereto
any rights or remedies under or by reason of this Agreement.
23. Headings. The headings in this Agreement are
intended solely for convenience of reference and shall not be given
any effect in the construction or interpretation of this Agreement.
24. Counterparts. This Agreement may be executed and
delivered in two or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the
same Agreement.
IN WITNESS WHEREOF, the undersigned have hereunto set
their hands on the date first written above.
"Debtor"
s/Samuel E. Chambers, II s/Angelo S. Morini
Witness ANGELO S. MORINI, individually
s/Christine L. Carlile
Witness
"Secured Party"
GALAXY FOODS COMPANY, a
Delaware corporation
s/Christine L. Carlile By: s/Samuel E. Chambers, II
Witness Name: Samuel E. Chambers, II
s/Christine L. Carlile Title: Chief Financial Officer
Witness
