EMPLOYMENT AGREEMENT AND STOCK OPTION
SENIOR EXECUTIVE
This EMPLOYMENT agreement and stock option for a senior executive
("Agreement') is made effective the 30th day of May, 1997, and entered into at
Son Diego, California, by and between Best Way, Inc., a Nevada corporation d/b/a
BestWay USA Inc., located at 000 Xxxxxxx Xxx, Xxxxx 000, Xxxxxx Xxxxx,
Xxxxxxxxxx 00000 hereinafter referred to as the Employer,, and Xxxxx X. Xxxxxxx
000 Xxxxxx Xxxxxxxx, Xxxxxx Xxxxx, XX 00000, hereinafter referred to as the
Employee, in consideration of the mutual Promises made herein, agree as follows:
ARTICLE 1. TERM OF EMPLOYMENT
Specified Term
1.01 The Company hereby employs Executive, and Executive hereby accepts
employment with Company for a period of five (5) years, beginning on July 1,
1997.
Automatic Renewal
1.02 After completion of the initial term set forth in Section 1.01, above,
and each twelve month anniversary thereafter, this Agreement shall automatically
renew for an additional one (1) year period, unless written notice of the intent
not to renew this Agreement is tendered by either the Company or Executive to
the other party no less than sixty (60) days prior to the expiration of this
Agreement.
Earlier Termination
1.03 This Agreement may be terminated earlier as hereinafter provided.
ARTICLE 2. DUTIES AND OBLIGATIONS OF EXECUTIVE
Title and Description of Duties
2.01 Executive shall serve as Vice President of Operations and shall at
all times be subject, to the direction of the President, and to the policies
established by the Board of Directors; of Company. In that capacity, Executive
shall do and perform all services, acts or things necessary or advisable to
fulfill the duties of said position, including without limitation:
(a) Overall planning, forecasting, budgeting, training,
organization coordination, control and direction of the day-to-day operations of
Company.
(b) Oversee expansion of Fountain Fresh beverage center installations as
quickly as is reasonably and profitably possible, and using all reasonable best
efforts to ensure said equipment is installed on time, in a workmanlike manner,
within budget, and with an ongoing effort to reduce installation costs.
(c) Establish a service program to ensure Fountain Fresh beverage centers
are operating at the best reasonable performance with the goal to maximize
sales, of consumables.
Loyal and Conscientious Performance of Duties
2.02 Executive agrees that tot the best of his ability and experience he
will at all times loyally and conscientiously perform all of the duties and
obligations required of him, either expressly or implicitly, by the terms of
this Agreement.
Devotion of Entire Time to Company's Business
2.03 (a) Executive shall devote his entire productive time, ability, and
attention to the business of Company during the term of the Agreement.
(b) During the term of this Agreement, Executive shall not engage in any
other business duties or pursuits whatsoever. Furthermore, during the term of
this Agreement, Executive shall not, whether directly or indirectly, render any
services of a commercial or professional nature to any other person or
organization, whether for compensation or otherwise, without the prior written
consent of Company's President. However, the expenditures of reasonable. amounts
of time for educational, charitable, or professional activities shall not be
deemed a breach of this Agreement, if those activities do not materially
interfere with the services under this Agreement, and shall not require the
prior written consent of Company's President.
(c) This Agreement shall not be interpreted to prohibit Executive from
making passive personal investments or conducting private business affairs, if
those activities do not materially interfere with the services required under
this Agreement However, except for those activities, Executive shall not,
directly or indirectly, acquire, hold, or retain any interest in any business
competing with, or similar in nature to, the business of Company.
Competitive Activities
(d) During the tem of this Agreement, Executive shall not directly or
indirectly, either as an employee, employer, consultant, agent, principal,
partner, stockholder, corporate officer, director, or in any other individual or
representative capacity, engage or participate in any business that is in
competition in any manner whatsoever with the business of Company.
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(e) Executive shall not for a period of one (1) year immediately following
the termination of employment with Company, either directly or indirectly (1)
Make known to any person, firm, or corporation the names or addresses of any of
company's clients or any other information pertaining to them; or, (2) Call on,
solicit or take away, or attempt to call on, solicit, or take away any of
Company's clients on whom Executive called or with whom Executive became
acquainted during their employment with Company, either on their behalf or that
of another person, firm, or corporation.
Uniqueness of Executive's Services
2.04 Executive hereby represents and agrees the services to be performed
under the terms of this Agreement are of a special, unique, unusual,
extraordinary, and intellectual character that gives them a peculiar value, the
loss of which cannot be reasonably or adequately compensated in damages in an
action at law. Executive, therefore, expressly agrees that Company, in addition
to any other rights or remedies which Company may possess, shall be entitled to
injunctive and other equitable relief to prevent or remedy a breach of this
Agreement by Executive.
Indemnification for Negligence or Misconduct
2.05 Executive shall indemnify and hold Company harmless from all liability
for loss, damage, or injury to persons or property resulting from the negligence
or misconduct of Executive.
Trade Secrets
2.06 (a) The parties acknowledge agree that during the term of this
Agreement and in the course of the discharge of his duties hereunder, Executive
shall have access to, and become acquainted with, information concerning the
operation of Company, including without limitation financial, personnel, sales.
planning, and other information which is owned by Company and regularly used in
the operation of Company's business, and that this information constitutes
Company's trade secrets.
(b) Executive agrees that he shall not disclose any such trade secrets,
directly or indirectly, to any other person or use them in any way, either
during the term of this Agreement or at any other time thereafter, except as is
required in the course of his employment with Company,
(c) Executive further agrees all files, records, documents, equipment, and
similar items relating to Company's business, whether prepared by Executive or
others, are and shall remain, exclusively the property of Company.
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ARTICLE 3. OBLIGATIONS OF COMPANY
General Description
3.01 Company shall provide Executive with the compensation, incentives,
benefits, and business expense reimbursement specified elsewhere in this
Agreement.
Office and Staff
3.02 Company shall provide Executive with office equipment and supplies,
mid other facilities and services, suitable to Executive's position and adequate
for the performance of his duties.
Indemnification of Executive
3.03 Company shall defend, indemnify mid hold harmless Executive from and
against any and all liabilities, claims, expenses (including expert witnesses'
fees), reasonable attorneys' fees, damages, causes of action, suits or judgments
sustained by Executive in direct consequence of his discharge of his duties on
Company's behalf. Company further agrees to defend, indemnify and hold harmless
Executive from and against any and all liabilities, claims, expenses (including
expert witness fees), reasonable attorneys fees, damages, causes of action,
suits or judgments arising out of or resulting from any activities he undertakes
at the request of the Company concerning Fountain Fresh International, a Utah
corporation d/b/a BetterStuff, Inc., located at 0000 Xxxxx Xxxxxxx Xxxx, Xxxxx
00, Xxxx Xxxx Xxxx, Xxxx 00000.
ARTICLE 4. COMPENSATION
4.01 (a) As compensation for the services to be rendered by Executive
hereunder. Company shall pay Executive an annual salary of one hundred twenty
thousand and no/100 dollars ($120,000.00), payable not less than once per month.
(b) Executive's base salary shall be reviewed annually on or about each
anniversary of the date of this Agreement. If the Company's Board of Directors;
in its sole discretion determines Executive's performance has been effective,
then a salary increase shall be granted in amount not less than the cost of
living increase, if any, for the greater Son Diego area as published in the most
recent issue of the San Diego Union Tribune newspaper.
Tax Withholding
4.02 Company shall have the right to deduct or withhold from the
compensation due to Executive hereunder any and all sums required for federal
income and Social Security, taxes, and all state or local taxes now applicable,
or that may be enacted and become applicable in the future.
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ARTICLES 3. STOCK OPTION
Option Granted
5.01 Company hereby grants Executive an option to purchase one hundred
thousand (100,000) shares of the common stock of Best Way, Inc., a Nevada
corporation, at a purchase price of $2.00. It is acknowledged and understood by
Executive that this stock option does not qualify as an incentive stock option
as defined in I.R.C ss. 422(b).
Time of Exercise of Option
5.02 Executive's right to exercise his option to purchase the one hundred
thousand (100,000) shares shall vest in equal installments of twenty five
thousand (25,000) shares each on the following dates:
25,000 Shares After completion of 1 year of employment
25,000 Shares After completion of 2 years of employment
25,000 Shares After completion of 3 years of employment
25,000 Shares After completion of 4 years of employment
Executive may exercise his option to purchase the one hundred thousand (100,000)
shares on the vesting date or at any time thereafter, and from time to time
until termination of the option as provided in paragraph 5.07, below, so long as
at all times beginning with the date of the grant of this option and ending
three (3) months prior to the date of exercise, or twelve (12) months prior to
the date of exercise, if the Executive is disabled within the meaning of United
States Internal Revenue Code Section 22 subd. (e)(3), Executive remains
employed. For purposes of this Agreement, "employment" means that Executive is
employed by Company, a parent or subsidiary corporation of Company, or a
corporation, or a parent or subsidiary corporation of such a corporation issuing
or assuming a stock option in a transaction to which United States Internal
Revenue Code Section 425, subd. (a), applies.
Method of Exercise
5.03 This option shall be exercised by written notice delivered to Company
at its principal place of business, stating the number of shares for which the
option is being exercised. The. notice must be accompanied by a check for the
amount of the purchase price.
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Capital Adjustments
5.04 (a) The existence of this option shall not affect in any way the right
or power of Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations, or other changes in Company's
capital structure or its business, or any merger or consolidation of Company or
any issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the common stock or the rights thereof, or the issuance of any
securities convertible into any common stock or of any rights, options, or
warrants to purchase any common stock, or the dissolution or liquidation of
Company, any sale or transfer of all or any part of its assets or business, or
any other corporate act or proceedings of Company, whether of a similar
character or otherwise.
(b) The shares with respect to which this option is granted am sham-i of
the common stock of Best Way, Inc., a Nevada corporation d/b/a BestWay USA Inc.,
as presently constituted but if and whenever, prior to the delivery by Company
of all the shares of the stock with respect to which this option is granted,
Company shall effect a subdivision or consolidation of shares other capital
readjustment, the payment of a stock dividend, or other increase or reduction of
the number of shares of the stock outstanding, the number of shares of stock
then remaining subject to this option shall: (1) In the event of an increase in
the number of outstanding shares be proportionately increased, and the cash
consideration payable per share shall be proportionately reduced; and, (2) In
the event of a reduction in the number of outstanding shares, be proportionately
reduced, and the cash consideration payable per share shall be proportionately
increased.
Merger and Consolidation
5.05 (a) Following the merger of one or more corporations into Company or
any consolidation of Company and one or more corporations in which Company is
the surviving corporation, the exercise of this option shall apply to the shares
of the surviving corporation.
(b) Notwithstanding any other provision of this Agreement, this option
shall terminate on the dissolution or liquidation of Company, or on any merger
or consolidation in which Company is not the surviving corporation.
Transfer of Option
5.06 During Executive's lifetime, this option shall be exercisable only by
Executive. This option shall not be transferable by Executive other than by the
laws of descent and distribution upon Executive's death. In the event of
Executives death during employment or during the applicable period after
termination of employment specified in paragraph 5.02, above, Executive's
personal representatives may exercise any portion of this option that remains
unexercised at the Executive's death, provided that any such exercise must be
made, if at all, during the period within one year after Executives death, and
subject to the option termination date specified in paragraph 5.07(c), below.
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Termination of Option
5.07 This option shall terminate on the earliest of the following dates:
(a) The expiration of three (3) months from the date of Executive's
termination of employment, as defined in paragraph 5.02, above, except for
termination due to death or permanent and total disability; or,
(b) The expiration of twelve (12) months from the date on which Executive's
employment, as defined in paragraph 5.02, above, is terminated due to permanent
and total disability as defined in United States Internal Revenue Code Section
22, subd. (e)(3); or,
(c) . On December 31st of the ninth year after this .Agreement is executed,
which is December 31, 2006.
Rights as Shareholder
5.08 Executive will not be deemed to be a. holder of any shares pursuant to
the exercise of this option until he pays the: option price and a stock
certificate is delivered to him for those shares, No adjustment shall be made
for dividends or other rights for which the record date is prior to the date the
stock certificate is delivered.
ARTICLE 6. BENEFITS
Annual Vacation
6.01 Executive shall be entitled to fifteen (15) days vacation time each
year with pay. Executive may be absent from his employment for vacation only at
such times as mutually agreed upon between Executive and Company's President. In
the event that Executive is unable for any reason to take the total amount of
vacation time authorized herein during any year, he may accrue that time and add
it to vacation time for any following year, or at Executives option, may instead
receive a cash payment in an amount equal to the amount of annual salary
attributable to that. period of time.
Paid Holidays
6.02 Executive shall be entitled to eight paid holidays per year, as
follows: New Year's Day, Memorial Day, July 4th, Labor Day, Thanksgiving Day and
the day after Thanksgiving, Christmas Day, and one floating day.
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Use of Company-Supplied Automobile
6.03 (a) During the term of employment hereunder, Executive shall be
entitled to the full use of an automobile of Company's choice at Company's
expense.
(b) The Company also agrees to pay all operating expenses of any nature
whatsoever with regard to the aforementioned automobile, and to procure and
maintain in force an automobile liability insurance policy on the automobile,
with coverage including Executive, for bodily injury or death, and for property
damage.
Group Medical Insurance
6.04 The Company agrees to include Executive and his spouse under Company's
group medical insurance coverage at Company's cost.
Moving Expenses
6.05 The Company will reimburse Executive for all reasonable expenses
incurred for the following:
(a) Moving the household goods and personal effects of Executive and
Executive's spouse from Executive's then residence to the new place of residence
selected by Executive.
(b) Traveling, including lodging, for a single one-way trip by Executive
and Executive's spouse from Executive's prior residence to the new place of
residence selected by Executive.
(c) Temporary housing for Executive and Executive's spouse in the Solana
Beach, California, area for a period not to exceed sixty (60) days from the date
of this Agreement.
(d) As an advance on moving expenses, immediately following execution of
this Agreement, Company shall pay to Employee the sum of fifteen thousand and
no/100 dollars ($15.000.00) to cover moving expenses incurred by Employee in
moving from St. Louis., Missouri to Solana Beach, California. Within thirty (30)
days following the move, Executive shall submit detailed documentation to
Company substantiating the actual expenses incurred. If Executive's actual
moving expenses are less than the $15,000.00 advance, the difference shall be
deemed an advance to Executive against future travel expenses. and deducted
accordingly, If Executive's actual moving expenses are greater than the
$15,000.00 advance, the Company shall reimburse Executive within fifteen (15)
after receipt of documentation of the expenses incurred.
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ARTICLE 7. BUSINESS EXPENSES
7.01 (a) Company shall promptly reimburse Executive for all reasonable
business expenses incurred by Executive in promoting the business of Company,
including expenditures for entertainment, gift, and travel.
(b) Each expenditure shall reimbursable only if it is of a nature
qualifying it as a proper deduction on the federal and state income tax return
of Company.
(c) Each such expenditure shall be reimbursable only if Executive furnishes
to Company adequate records and other documentary evidence required by federal
and state statutes and regulations issued by the appropriate taxing authorities
for the substantiation of that expenditure as an income tax deduction.
ARTICLE 8. TERMINATION OF EMPLOYMENT
Termination for Cause
8.01 (a) Company reserves the right to terminate this Agreement if
Executive: (1) willfully breaches or habitually neglects the duties which he is
required to perform under the terms of this Agreement, or, (2) Commits acts of
dishonesty, fraud, misrepresentation, or other acts of moral turpitude that
would prevent the effective performance of his duties.
(b) Company may, at its option, terminate this Agreement for the reasons
stated in this section by giving written notice of termination to Executive
without prejudice to any other remedy to which Company may be entitled either at
law, in equity, or under this Agreement.
(c) Termination under this section shall be considered "for cause" for the
purposes of this Agreement
Termination Upon Stated Events
8.02 (a) This Agreement shall be terminated upon the death of the
Executive.,
(b) Company reserves the right to terminate this Agreement not less than
sixty (60) days after Executive suffers any physical or mental disability that
would prevent the performance of his duties under this Agreement. Such a
termination shall be affected by giving ten (10) days written notice of
termination to Executive.
(c) Termination under this section shall not be considered "without cause"
for the purposes of this Agreement.
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Termination Without Cause
8.03 (a) Company reserves the right to terminate this Agreement immediately
upon the occurrence of circumstances which make it impossible or impracticable
for the business of Company to be continued.
(b) Executive renders services which are unsatisfactory to Company, and
Company shall be the sole judge as to whether the services of Executive are
satisfactory.
(d) Termination under this section shall not be considered "for cause" but
shall be considered "without cause" for the purposes of this Agreement.
Severance Pay Upon Termination Without Cause
8.04 (a) In the event Executive is terminated by the Company without cause
during the first three (3) years of employment under this Agreement, Company
shall pay Executive severance pay equal to three (3) months of Executive's
monthly base salary in effect at the time of termination.
(b) In the event Executive is terminated by the Company without cause after
the first three (3) years of employment under this Agreement Company shall pay
Executive severance pay equal to six (6) months of Executive's monthly base
salary in effect at the time of termination.
Effect of Merger, Transfer of Assets or Dissolution
8.05 (a) This Agreement shall be. terminated by any voluntary or
involuntary dissolution of Company resulting from either a merger or
consolidation in which Company is not the consolidated or surviving corporation,
or a transfer of all, or substantially all, of the assets of Company.
(b) Termination under this section shall not be considered "for cause" but
shall be considered "without cause" for the purposes of this Agreement.
Termination by Executive
8.06 Executive may terminate his obligations under this Agreement by giving
Company at least sixty (60) days prior written notice.
Effect an Compensation
8.07 In the event this; Agreement is terminated prior to the completion of
the term of employment specified herein, Executive shall be entitled to the
compensation earned by and. vested in him prior to the date of termination as
provided for in this Agreement, computed pro rata up to, and including, that
date. Executive shall be entitled to no further compensation as of the date of
termination.
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ARTICLE 9. GENERAL PROVISIONS
9.01 Any notices to be given by either party to the other shall be in
writing and maybe transmitted either by personal delivery or by mail, registered
or certified, postage prepaid with return receipt requested. Mailed notices
shall be addressed to the parties at the address appearing in the introductory
paragraph of this Agreement, but each party may change that address by written
notice in accordance with this section. Notices delivered personally shall be
deemed communicated as of the date of actual receipt, mailed notices shall be
deemed communicated as of five (5) days after the date of mailing.
Attorneys' Fees and Costs
9.02 If this Agreement gives rise to a lawsuit or other legal proceeding
between any of the parties hereto, the prevailing party shall be entitled to
recover court costs, necessary disbursements (including experts' fees) and
actual attorneys' fees, in addition to any other relief such party may be
entitled. This provision shall be construed as applicable to the entire
contract.
Entire Agreement
9.03 This Agreement supersedes any and all other agreements, either oral or
in writing, between the parties hereto with respect to the employment of
Executive by Company, and contains all of the covenants and agreements between
the parties with respect to that employment in any manner whatsoever. Each party
to this Agreement acknowledges that no representations, inducements promises, or
agreements, orally or otherwise, have been made by any party, or anyone acting
on behalf of any party, which arc not embodied herein, and that no other
argument, statement, or promise not contained in this Agreement shall be valid
or binding.
Modifications
9.04 Any modification of this Agreement will be effective only if it is in
writing signed by the party to be charged,
Effect of Waiver
9.05 The failure of either party to insist on strict compliance with any of
the terms, covenants, or conditions of this Agreement by the other party shall
not be deemed a waiver of that term, covenant, or condition, nor shall any
waiver or relinquishment of any right or power at one time or times be deemed a
waiver or relinquishment of that right or power for all or any other times.
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Partial Invalidity
9.06 If any provision in this Agreement is hold by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining provisions
shall nevertheless continue in full force without being impaired or invalidated
in any way.
Law Governing Agreement/Jurisdiction
9.07 This Agreement shall be governed by and construed in accordance with
the. laws of the State of California. Jurisdiction and venue for any suit
arising out of this Agreement shall lie exclusively in a competent court in the
County of San Diego, State of California.
Sums Due When Deceased
9.08 If Executive dies prior to the expiration of the term of his
employment any sums that may be due him from Company under this Agreement as of
the date of death shall be paid to Executive's executors, administrators, heirs,
personal representatives, successors, and assigns
COMPANY
BEST WAY, INC.,
a Nevada corporation
By: /s/
Xxxxxx Xxxxxx
Chief Executive Officer
EXECUTIVE
/s/
Xxxxx X. Xxxxxxx
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