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, 1
995
GALAXY FOODS COMPANY
(Exact Name of Registrant as Specified in Charter)
Delaware 0-16251 25-1391475
(State or other ju (Commission File (IRS Employer
risdiction Number) Identification No
of incorporation) .)
2441 Viscount Row 32809
Orlando, Florida (Zip Code)
(Address of principal executiv
e offices)
Registrant's telephone number, including area code: (407) 855-5500
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 10.84 Employment Agreement dated as of
October 10, 1995, by and between Galaxy Foods
Company and Angelo S. Morini
Exhibit 10.85 Balloon Promissory Note dated as of
October 11, 1995, by Angelo S. Morini in favor of
Galaxy Foods Company
Exhibit 10.86 Stock Pledge and Security Agreement
dated as of October 11, 1995, by and between
Galaxy Foods Company and Angelo S. Morini
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
