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Exhibit 4.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into this 9th day of April,
1999, by and between YOGEN FRUZ WORLD-WIDE INCORPORATED, an Ontario corporation
(the "Company"), and MICHAEL SERRUYA, a resident of Richmond Hill, Ontario,
Canada (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to employ the Executive in accordance with
the terms of this Agreement and the Executive desires to be so employed by the
Company.
NOW, THEREFORE, in consideration of the mutual covenants, agreements and
warranties herein contained, the parties agree as follows:
I. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
a. "Base Annual Salary" shall mean the base annual salary
(exclusive of bonuses and fringe benefits) of the Executive described in Section
2(a) hereof.
b. "Board" shall mean the Board of Directors of the Company.
c. "Yogen Fruz" shall mean Yogen Fruz World-Wide Incorporated, an
Ontario corporation, together with all subsidiaries of Yogen Fruz, whether now
or hereafter existing. The term "Yogen Fruz" shall also be deemed to include any
successor to Yogen Fruz World-Wide Incorporated, and any other name by which it
may hereafter be known.
d. "Consulting Agreement" shall mean that certain consulting
agreement to
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be entered into by and between the Company and the Executive pursuant to Section
6 hereof.
1. Duties.
a. The Company does hereby employ the Executive and the Executive
does hereby accept employment as the Co-Chairman of the Board, Co-President and
Co-Chief Executive Officer of the Company upon the terms and subject to the
conditions set forth herein. In his capacity as Co-Chairman of the Board,
Co-President and Co-Chief Executive Officer of the Company, the Executive shall
be responsible for the day-to-day business and operations of the Company and
shall perform appropriate duties consistent with such positions.
b. The Executive shall report to the Co-President/Chief Executive
Officer of the Company and to the Board.
c. Under no circumstances will the Company require the Executive,
without his prior consent, to relocate outside of a 15-mile radius from the
current location of the Company's offices at 8300 Woodbine Avenue, 5th Floor,
Markham, Ontario, L3R 9Y7. In the event that, at any time during the term of
this Agreement or any extension or renewal thereof, the Company causes the
Company to relocate outside such 15-mile radius, the Executive shall have the
option to resign and, if he exercises such option, shall receive from the
Company, all of his entitlements as provided for hereunder, including, but not
limited to, the severance in Section 2(d) below.
2. Compensation.
a. Base Annual Salary. During the term of this Agreement, the
Company shall pay to the Executive a Base Annual Salary of THREE HUNDRED TWENTY
THOUSAND DOLLARS ($320,000) per year, payable in equal bi-weekly installments,
subject to customary withholding and other employee taxes as required by the
laws of Canada or the Province of Ontario
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or any subdivision.
b. Benefits. In addition to the Base Annual Salary, the Executive
shall be entitled to the following benefits during the term of this Agreement:
i. The Executive shall have an aggregate of four (4) weeks
paid vacation each year.
ii. The Company shall provide the Executive with health,
hospital, dental and other insurance benefits as have
been provided to the Executive by the Company
immediately prior to the date hereof, but in no event,
shall the insurance benefits to be provided to the
Executive hereunder ever be less than that which is
substantially similar to the health, hospital, dental
and other insurance benefits provided by the Company to
its senior executive employees. All such insurance
policies shall be with insurance companies qualified to
provide benefits in Canada.
iii. The Company shall provide the Executive with the
exclusive use of an automobile of the type the Executive
is currently driving, plus payment of all automobile and
other related expenses.
iv. The Company shall provide the Executive with a private
office commensurate in size, furnishings and amenities
with the office currently furnished to Executive at the
Company.
v. The Company shall reimburse the Executive for all
out-of-pocket expenses as Executive shall incur for all
entertainment, meals, travel
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and other business expenses, which Executive incurs in
the performance of his duties and undertakings
hereunder.
vi. The Company shall provide the Executive with such
director's and officer's liability insurance as provided
to other directors and officers of the Company.
vii. The Company shall provide the Executive with all other
benefits which are currently offered or hereinafter
offered to senior executive employees of the Company.
c. Bonus. In addition to the other compensation provided to the
Executive hereunder, the Executive shall be entitled to a bonus as annually
determined by the Compensation Committee or the Board.
d. Severance. The Company shall pay the Executive (or his estate)
the amount of FIVE HUNDRED THOUSAND DOLLARS ($500,000) within five (5) days
after the effective date of the termination of this Agreement for any reason,
including, without limitation, the failure of the Company to renew this
Agreement after the expiration of the term hereof on terms at least as favorable
to the Executive as provided herein. The Company shall not pay the Executive
such severance in the event of a termination for cause pursuant to Section 3(b)
hereof, or in the event the Executive voluntarily terminates his employment,
except pursuant to Section 3(d) hereof.
3. Term of Employment. The term of employment shall be for five (5)
years, commencing on the date hereof, but subject to the following:
a. Death. The death of the Executive shall terminate this
Agreement, but shall not affect the rights of the Executive's estate or other
successors-in-interest to the Base Annual
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Salary earned or accrued to the date of Executive's death, the reimbursement of
any expenses not previously paid pursuant to Section 2(b) above and any other
compensation or benefits provided to the Executive under this Agreement,
including the severance under Section 2(d) above.
b. Termination for Cause. This Agreement and Executive's
employment by the Company may, at the option of the Company, be terminated for
"cause" upon at least five (5) days written notice to Executive, in which case,
Executive shall be entitled to receive the Base Annual Salary earned or accrued
to the effective date of the Executive's termination for cause, and the
reimbursement of any expenses not previously paid pursuant to Section 2(b)
above. As used herein, "cause" shall mean any theft, embezzlement or fraud by
Executive or Executive's involvement in any scheme or conspiracy pursuant to
which the Company has lost any assets.
c. Termination Without Cause. If the Company wishes to terminate
the Executive's employment without cause (as defined above), it may do so upon
at least sixty (60) days written notice to the Executive. In the event of
termination without cause, the Executive shall continue to render his services
up to the effective date of termination and shall be entitled to receive the
Base Annual Salary earned or accrued to the effective date of the Executive's
termination without cause, the reimbursement of any expenses not previously paid
pursuant to Section 2(b) above and any other compensation or benefits provided
to the Executive under this Agreement, including, but not limited to, severance
under Section 2(d) above. The Executive will continue, in the event of
termination without cause, to receive the annual salary pursuant to Section 2(a)
for four (4) years subsequent to the termination of this Agreement.
d. Termination by Executive. The Executive may terminate his
employment at any time upon thirty (30) days notice to the Company. In such
event, the Executive shall receive
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the Base Annual Salary earned or accrued to the effective date of the
Executive's termination, the reimbursement of any expenses not previously paid
pursuant to Section 2(b) above and any other compensation or benefits provided
to the Executive under this Agreement.
Upon termination by Executive, and prior to Executive receiving
outstanding monies from the Company, all monies owing to the Company by the
Executive shall be paid in full.
4. Nondisclosure of Information. The Executive recognizes and
acknowledges that the Company's business and records are valuable and unique
assets of the Company, access to and knowledge of which are essential to the
performance of the duties of Executive hereunder. The Executive therefore agrees
that he will not, without the Company's written consent, disclose any of such
records, lists, and secrets, which are not available to the public, for any
reason or purpose whatsoever except in connection with the performance of his
duties hereunder or as required by any court of competent jurisdiction.
5. Indemnification. The Company shall indemnify, defend and hold
Executive harmless when Executive 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, without limitation,
an action by or in the right of the Company) by reason of the fact that
Executive is or was a director, officer, employee or agent of the Company or any
predecessor of the Company, or is or was serving at the request of the Company
or any predecessor of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise or
entity, against any and all expenses (including, without limitation, attorneys'
fees and costs), judgments, fines and amounts paid in settlement, actually
incurred by Executive in connection with such action, suit or proceeding, if
Executive acted in good faith and in a manner he
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reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order or settlement, shall not, of itself, create a
presumption that Executive did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of the Company
or, with respect to any criminal action or proceeding, that Executive had
reasonable cause to believe that his conduct was unlawful. The indemnification
provided for herein shall survive the Executive's termination of employment or
any other termination of this Agreement for whatever reason.
6. Continuing Health Insurance.
a. In the event this Agreement is terminated for any reason
(other than because of the death of the Executive or Executive's voluntary
termination of his employment) or, in thee event this Agreement is not renewed
by the Company after the expiration of the initial or any renewal term hereof,
the Company and the Executive have the option to enter into a Consulting
Agreement under the terms of which the Executive shall provide such consulting
services as shall be mutually acceptable for a period of one (1) year from the
effective date of the termination of this Agreement. The Consulting Agreement
shall not be terminated by the Company during such one (1) year period, except
upon the death of the Executive. The Consulting Agreement shall provide that the
manner in which the consulting services are to be performed and the specific
hours to be worked by the Executive shall be determined by the Executive, and
that the Executive shall be entitled to reimbursement from the Company for all
authorized out-of-pocket expenses incurred by him in the performance of his
duties thereunder.
b. The Consulting Agreement shall provide for such consulting
fees
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commensurate with the services rendered by the Executive in light of his
knowledge and experience and shall further provide that, during the term
thereof, the Company will continue to provide the Executive and his family with
the same health, hospital, dental and other medical insurance as the Executive
has been provided by the Company at the time of such termination, provided that,
in no event, shall the level of any such insurance benefits under the Consulting
Agreement ever by less than the health, hospital, dental and other medical
insurance provided by the Company to its senior executive employees at any time
during the term of the Consulting Agreement. All such insurance policies shall
be with insurance companies qualified to provide benefits in the United States
of America.
c. The Consulting Agreement shall provide that the Executive
shall reimburse the Company for the actual cost of the premiums for the medical
insurance provided to the Executive and his family thereunder, which cost shall
be no more than the amount which the Company charges for such family medical
insurance coverage for its other employees. The Company shall forward to the
Executive a copy of the premium notice or notices with respect to the medical
insurance policies provided under the Consulting Agreement, and the Executive
shall reimburse the Company for such premium within ten (10) days of his receipt
of such premium notices.
d. In the event this Agreement is terminated because of the death
of the Executive, the Company shall continue to provide the Executive's family
with all such insurance policies described in this Section 6 for a period one
(1) year from the date of the death of the Executive. The Executive's estate
shall reimburse the Company for the actual cost of the premiums in the manner
set forth in Section 6(c).
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7. Notices. All notices and other communications required or desired to
be given under the terms of this Agreement shall be in writing and shall be
deemed given when delivered personally or three (3) days after deposit in the
mail, via courier or similar means, addressed as follows:
To the Company:
Yogen Fruz World-Wide Incorporated
8300 Woodbine Avenue, 5th Floor
Markham, Ontario, Canada L3R 9Y7
Attention: President
To the Executive:
Mr. Michael Serruya
33 Moodie Drive
Richmond Hill, Ontario L4C-8C4
Canada
or such other address as either party may, from time to time, notify the other
party as provided herein.
8. Assignment. The Executive may not assign or delegate any of his
rights or obligations under this Agreement without first obtaining the written
consent of the Company, except that certain rights of the Executive shall be
assigned to his estate upon his death as set forth in Section 3(a) hereof. This
Agreement shall inure to the benefit of any successors or assigns of the
Company, provided that the Company has sent prior written notice to the
Executive of any assignment by the Company of its rights under this Agreement.
9. Entire Agreement; Amendment and Modification. This Agreement
constitutes the entire understanding of the parties with respect to the subject
matter hereof, and there are no representations, warranties, agreements or
commitments between the parties hereto with respect to
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the employment and compensation of the Executive except as set forth herein. No
amendment or modification of the terms of this Agreement shall be binding upon
either party unless reduced to writing and signed by the Executive and a duly
appointed officer of the Company.
10. Governing Law. The provisions of this Agreement shall be construed
in accordance with the laws of the Province of Ontario. This Agreement is
delivered by the Executive to the Company at the Company's principal place of
business which is located at 8300 Woodbine Avenue, 5th Floor, Markham, Ontario,
Canada, L3R 9Y7, and shall be deemed to have been made at such location.
IN ORDER TO INDUCE EACH OTHER PARTY TO ENTER INTO THIS AGREEMENT AND
FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH
ARE HEREBY ACKNOWLEDGED, THE EXECUTIVE AND THE COMPANY AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING DIRECTLY, INDIRECTLY OR OTHERWISE, IN CONNECTION WITH, OUT
OF, RELATED TO, OR FROM, THIS AGREEMENT, SHALL BE LITIGATED IN COURTS HAVING A
SITUS WITHIN THE PROVINCE OF ONTARIO. FOR THE PURPOSES OF THE FOREGOING, THE
EXECUTIVE AND THE COMPANY HEREBY CONSENT AND SUBMIT TO THE JURISDICTION OF ANY
LOCAL, PROVINCIAL OR FEDERAL COURT LOCATED WITHIN THE PROVINCE OF ONTARIO. THE
EXECUTIVE AND THE COMPANY HEREBY WAIVE ANY RIGHT TO TRANSFER OR CHANGE THE VENUE
OF ANY LITIGATION BROUGHT BY THE OTHER PARTY IN ACCORDANCE WITH THIS PARAGRAPH.
11. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions and portions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.
12. Waiver. The failure of either party to insist, in any one or more
instances, upon performance of the terms or conditions of this Agreement shall
not be construed as a waiver or relinquishment of any right granted hereunder or
of the future performance of any such term,
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covenant or condition.
13. Headings. Heading of the sections of this Agreement are for
reference only and shall not be deemed to have any substantial effect.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused its duly authorized
officer to execute this Agreement on behalf of the Company, and the Executive
has signed this Agreement on the day and year first above written.
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YOGEN FRUZ WORLD-WIDE INCORPORATED
By: /s/ Richard E. Smith
_______________________
Name: _____________________
Title: ____________________
EXECUTIVE:
/s/ Michael Serruya
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Michael Serruya
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