EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made this 15th day of
January, 2004 between Beverage Network of Massachusetts, Inc., a Florida
corporation with its principal place of business at 4800 N.W. 15th Avenue, Bay
1-A, Xxxx Xxxxxxxxxx, Xxxxxxx 00000 (the "Company"), and Xxxx Xxxxx, who resides
at 00, Xxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 (the "Employee").
WHEREAS, the parties hereto wish to enter into an employment agreement
to employ the Employee as the General Manager of the Company and to set forth
certain additional agreements between the Employee and the Company.
NOW, THEREFORE, in consideration of the mutual covenants and
representations contained herein, the parties hereto agree as follows:
1. Employment Period. The Company will employ the Employee, and the
Employee will serve the Company, under the terms of this Agreement for a term of
three years (the "Term") commencing as of the date first above written (the
"Commencement Date") and ending on March 31st 2007. Notwithstanding the
foregoing, the Employee's employment hereunder may be earlier terminated,
subject to Section 4 hereof.
2. Duties and Status. The Company hereby engages the Employee as the
General Manager for the Company on the terms and conditions set forth in this
Agreement. During the Term, the Employee shall exercise such authority, perform
such duties and functions and discharge such responsibilities as are reasonably
associated with the General Manager's position, commensurate with the authority
vested in the Employee by the Company's President. The Employee's duties shall
include, but are not limited to, overseeing the daily operations of the Company,
marketing, sales, managing customer service, dealing with vendors and suppliers,
building alliances and partnerships, and directing other employees as necessary.
During the Term, the Employee shall devote his full business time, skill and
efforts to the business of the Company. However, nothing shall prohibit the
Employee from engaging in charitable and civic activities and managing his
personal passive investments, provided that such passive investments are not in
a company which competes in a business similar to that of the Company's
business.
(a) Without limiting the generality of the foregoing, the
Employee covenants to perform the employment duties called for hereby in good
faith, devoting substantially all business time, energies and abilities thereto
and will not engage in any other business or commercial activities for any
person or entity without the prior written consent of the Company.
(b) The Employee shall not take any action which would in any
way adversely affect the reputation, standing or prospects of the Company or its
parent, XSBG (as defined below) or which would cause the Company to be in
violation of applicable laws.
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3. Compensation; Benefits and Expenses.
(a) Salary. During the Term, the Company shall pay to the
Employee, as compensation for the performance of his duties and obligations
under this Agreement, a base salary at the rate of $80,000 per annum ("Base
Salary"), payable in arrears not less frequently than twice monthly in
accordance with the normal payroll practices of the Company. Such Base Salary
shall be subject to review each year by the Company's Board of Directors in
their sole discretion but in no event shall the Base Salary be subject to
reduction.
(b) Bonus. In addition to the Base Salary payable to the
Employee hereunder, the Employee also shall be entitled to receive additional
compensation, at such times and in such amounts, as shall be determined by the
Company's Board of Directors ("the Bonus"). Currently, the Employee's Bonus
program is set forth on Exhibit A, attached hereto and made a part hereof.
Notwithstanding the prior sentence, the Employee acknowledges that this Bonus
program may be amended by the Company, in its sole discretion, from time to time
but in no event shall the target dollar value of the Bonus be subject to
reduction.
(c) Other Benefits. During the Term, the Employee shall be
entitled to participate in all of the employee benefit plans, programs and
arrangements of the Company in effect during the Term which are generally
available to Employees of the Company (including, without limitation, pension,
profit sharing, group life insurance and group medical insurance plans), subject
to and on a basis consistent with the terms, conditions and overall
administration of such plans, programs and arrangements. From the date of
execution of this Agreement until such time as it is either (a) terminated or
(b) that the Company provides medical and dental insurance to the Employee
through the Company's medical and dental benefits program, then the Company
shall pay the monthly premiums for the medical and dental insurance plan in
which Employee and his dependents are participating at the date of execution of
this Agreement, a summary of which plan is set forth in Exhibit B attached
hereto and made a part hereof.
(d) Expenses. In addition to any amounts payable to the
Employee pursuant to this Section 3, the Company shall reimburse the Employee
upon production of accounts and vouchers or other reasonable evidence of payment
by the Employee, all in accordance with the Company's regular procedures in
effect from time to time, all reasonable, ordinary and necessary expenses as
shall have been be incurred by him in the performance of his duties hereunder.
(e) Withholding of Taxes. All payments required to be made by
the Company to the Employee under this Agreement shall be subject to the
withholding of such amounts, if any, relating to tax, excise tax and other
payroll deductions as the Company may reasonably determine it should withhold
pursuant to any applicable law or regulation.
(f) Vacation. The Employee shall be entitled to three (3)
weeks paid vacation annually, to be take at such time(s) as shall not, in the
reasonable judgment of the Company's President, interfere with the fulfillment
of the Employee's duties under this Agreement. The Employee shall be entitled to
as many holidays, sick days and personal days in accordance with the Company's
policies in effect from time to time.
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(g) Automobile Allowance. The Employee shall be entitled to
receive an automobile allowance in an amount of $500 per month.
(h) XSBG Restricted Stock. As long as this Agreement has not
been terminated for any reason, the Employee shall be entitled to receive an
issue of 15,000 shares of XStream Beverage Group, Inc. ("XSBG") restricted stock
upon the completion of the first and the second anniversary of this Agreement
and an additional 30,000 shares of XSBG restricted stock on completion of the
third anniversary of this Agreement. The shares to be received by the Employee
will be subject to Rule 144 of the Securities Act of 1933, as amended.
4. Termination of Employment.
(a) Termination for Cause. The Company may terminate this
Agreement and its obligations to the Employee hereunder at any time for "cause",
which shall mean: (i) any willful and continued breach by the Employee of the
performance of his duties pursuant to this Agreement or of the written policies
of the Company, (ii) any material breach by the Employee of this Agreement,
(iii) the continued failure by the Employee to devote a substantial amount of
his working time to the affairs of the Company or (iv) the active engagement by
the Employee in any business which interferes with the performance of his duties
hereunder, provided that in any such case the Employee has not cured such
failure within ten (10) days after the receipt by the Employee of written notice
thereof from the Company specifying with reasonable particularity such alleged
failure.
In addition, the following shall also constitute "cause"
hereunder for which the Company may terminate this Agreement without any cure
period: (i) the violation by the Employee of any of the provisions of Section 6
hereafter, (ii) the commission by the Employee of an act of fraud or theft
against the Company or any of its affiliates or subsidiaries, or the Employee's
willful misfeasance or willful malfeasance in the performance of his duties to
the Company, or (iii) the conviction of the Employee of (or the plea by the
Employee of nolo contenderes to) any criminal act.
(b) Termination for Good Reason. The Employee shall have the
right at any time to terminate his employment with the Company for good reason.
For purposes of this Agreement and subject to the Company's opportunity to cure
any of the following, within ten (10) days after the Employee's written notice
of any such occurrence, the Employee shall have "good reason" to terminate his
employment hereunder if such termination shall be the result of a breach by the
Company of the compensation and benefits provisions set forth in Section 3
hereof.
(c) Termination Upon Death or Disability. This Agreement and
the Employee's employment hereunder shall be terminated by the death of the
Employee. This Agreement and the Employee's employment hereunder may be
terminated by the Company if the Employee shall be rendered incapable of
performing his duties to the Company by reason of any medically determined
physical or mental impairment for a period of either (i) sixty (60) consecutive
days from the first date of the Employee's absence due to the disability or (ii)
ninety (90) days during any twelve-month
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period (a "Disability"). During such period of disability, the Company shall
continue to pay to the Employee the compensation set forth in Section 3 hereof;
provided, however, that to the extent that the Employee receives payments
pursuant to any disability insurance policy, the Company may deduct the amounts
received by the Employee pursuant to that policy from the compensation payable
to him. If this Agreement is terminated by reason of Disability of the Employee,
the Company shall give 30 days' advance written notice to that effect to the
Employee.
(d) Deterioration or Discontinuance of Business: In the event
that the Company discontinues operating its business, this Agreement shall
terminate as of the last day of the month on which it ceases operation with the
same force and effect as if such last day of the month were originally set as
the termination date hereof; provided, however, that a reorganization or merger
of the Company shall not be deemed a termination of its business.
5. Consequences of Termination.
(a) Without Cause or for Good Reason. In the event of a
termination of the Employee's employment during the Term by the Company other
than for "cause" (as provided for in Section 4(a) hereof) or by the Employee for
"good reason" (as provided for in Section 4(b) hereof) the Company shall pay the
Employee and provide him with the following:
(i) Severance. The Company shall continue to pay to
the Employee, after the termination of this Agreement, on the regular dates for
payment of Base Salary, the Employee's Base Salary for a period of time (the
"Severance Period") equal to the lesser of (A) six (6) months or (B) the
remainder of the Term of this Agreement if it had not been terminated early,
provided that the Company, in its sole discretion may pay such total amount in
one (1) lump sum payment upon the termination of this Agreement.
(ii) Earned but Unpaid Amounts. Upon termination, the
Company shall pay to the
Employee any previously earned but unpaid salary through the Employee's final
date of employment with the Company.
(b) Other Termination of Employment. In the event that the
Employee's employment with the Company is terminated during the Term by the
Company for "cause" (as provided for in Section 4(a) hereof), by the Employee
other than for "good reason" (as provided for in Section 4(b) hereof) or as a
result of the Employee's death or Disability (as provided for in Section 4(c)
hereof), (i) the Company shall pay the Employee (or his legal representative)
any earned but unpaid salary amounts through the Employee's final date of
employment with the Company, and (ii) in the case of any such termination, the
Company shall have no further obligations to the Employee.
(c) Withholding of Taxes. All payments required to be made by
the Company to the Employee under this Section 5 shall be subject to the same
withholding requirements as provided in subsection 3(e) hereof.
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(d) No Other Obligations. The benefits payable to the Employee
under this Agreement are not in lieu of any benefits payable under any employee
benefit plan, program or arrangement of the Company, except as provided
specifically herein, and upon termination the Employee will receive such
benefits or payments, if any, as he may be entitled to receive pursuant to the
terms of such plans, programs and arrangements. Except for the obligations of
the Company provided by the foregoing and this Section 5, the Company shall have
no further obligations to Employee upon his termination of employment.
(e) Final Settlement. Upon termination of this Agreement the
Employee or the Employee's representative shall execute and deliver to the
Company on a form prepared by the Company, a release of all claims except such
claims as may have been submitted pursuant to the terms of this Agreement and
which remain unpaid, and, shall forthwith tender to the Company all records,
manuals and written procedures, as may be desired by it for the continued
conduct of its business.
6. Restrictive Covenants.
(a) Restrictions On The Employee: During the period commencing
on the date hereof and ending two (2) years after the termination of the
Employee's employment by the Company for any reason, the Employee shall not
directly or indirectly induce or attempt to induce any of the employees of the
Company to leave the employ of Company.
(b) Covenant Not To Compete: During the period commencing on
the date hereof, and ending two (2) years after the termination of the
Employee's employment for any reason, the Employee shall not, except as a
passive investor in publicly held companies, engage in, or own or control any
interest in, or act as principal, director, officer or employee of, or
consultant to, any firm or corporation which is in competition with the Company
or any subsidiary or affiliate of the Company.
(c) Covenant not to Disparage. The Employee hereby irrevocably
covenants and agrees that during the term of this Agreement and after its
termination, he will refrain from making any remarks that could be construed by
anyone, under any circumstances, as disparaging, directly or indirectly,
specifically, through innuendo or by inference, whether or not true, about the
Company, its constituent members, or their officers, directors, stockholders,
employees, agent or affiliates, whether related to the business of the Company,
to other business or financial matters or to personal matters.
(d) Proprietary Information: For purposes of this Agreement,
"proprietary information" shall mean any proprietary information relating to the
business of the Company or any parent, subsidiary or affiliate of the Company
that has not previously been publicly released by duly authorized
representatives of the Company and shall include (but shall not be limited to)
information encompassed in all proposals, marketing and sales plans, financial
information, costs, pricing information, computer programs (including without
limitation source code, object code, algorithms and models), customer
information, customer lists, and all methods, concepts, know-how or ideas in or
reasonably related to the business of the Company or any subsidiary or affiliate
of the Company.
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The Employee agrees to regard and preserve as confidential all proprietary
information, whether he has such information in his memory or in writing or
other tangible or intangible form. The Employee will not, without written
authority from the Company to do so, directly or indirectly, use for his benefit
or purposes, nor disclose to others, either during the term of his employment
hereunder or thereafter, any proprietary information except as required by the
conditions of his employment hereunder or pursuant to court order (in which case
Employee shall give the Company prompt written notice so that the Company may
seek a protective order or other appropriate remedy and/or waive compliance with
the provisions of this Agreement. The Employee agrees not to remove from the
premises of the Company or any parent, subsidiary or affiliate of the Company,
except as an employee of the Company in pursuit of the business of the Company
or any of its subsidiaries, affiliates, or except as specifically permitted in
writing by the Company, any document or object containing or reflecting any
proprietary information. The Employee recognizes that all such documents and
objects, whether developed by him or by someone else, are the exclusive property
of the Company. Proprietary information shall not include information which is
presently in the public domain or which comes into the public domain through no
fault of the Employee or which is disclosed to the Employee by a third party
lawfully in possession of such information with a right to disclose same.
(e) All proprietary information and all of the Employee's
interest in trade secrets, trademarks, computer programs, customer information,
customer lists, employee lists, products, procedure, copyrights, patents and
developments hereafter to the end of the period of employment hereunder
developed by the Employee as a result of, or in connection with, his employment
hereunder, shall belong to the Company; and without further compensation, but at
the Company's expense, forthwith upon request of the Company, Employee shall
execute any and all such assignments and other documents and take any and all
such other action as Company may reasonably request in order to vest in Company
all the Employee's right, title and interest in and to all of the aforesaid
items, free and clear of liens, charges and encumbrances.
(f) Other Agreements. The Employee hereby represents that he
is not bound by the terms of any agreement with any previous employer, other
than the Company's affiliates, or other party to refrain from using or
disclosing any trade secret or confidential or proprietary information in the
course of his employment with the Company or to refrain from competing, directly
or indirectly, with the business of such previous employer or any other party.
The Employee further represents that his performance of all the terms of this
Agreement and as an employee of the Company does not and will not breach any
agreement to keep in confidence proprietary information, knowledge or data
acquired by his in confidence or in trust prior to his employment with the
Company.
(g) Limitation. The Employee expressly agrees that the
covenants set forth in this Section 6 of this Agreement are being given to the
Company in connection with the employment of the Employee by Company and that
such covenants are intended to protect Company against the competition by the
Employee, within the terms stated, to the fullest extent deemed reasonable and
permitted in law and equity. In the event that the foregoing limitations upon
the conduct of the Employee are beyond those permitted by law, such limitations,
both as to time and geographical area, shall be, and be deemed to be, reduced in
scope and effect to the maximum extent permitted by law.
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7. Injunctive Relief. The parties agree that it is impossible to
determine the monetary damages that will accrue as a result of any breach of the
provisions of Section 6 of this Agreement. Therefore, if the Company institutes
any action or proceeding in equity to enforce any of the provisions of Section 6
of this Agreement, the Employee hereby waives the claim or defense therein that
such party has an adequate remedy at law, and such person shall not urge in such
equitable action or proceeding the claim or defense that such remedy at law
exists.
8. Notice. Any notice, request, demand or other communication required
or permitted hereunder shall be deemed to be properly given when personally
served in writing or by courier, telegraphed, telexed or by facsimile
transmission or sent by express, registered or certified mail, postage prepaid,
addressed to the other party at the address provided above. Either party may, by
written notice to the other, change the address to which notices to such party
are to be delivered or mailed in accordance with this section.
9. Arbitration. Except as specifically provided herein, any dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration, conducted before a single arbitrator mutually
selected by the parties, in the State of Florida, in accordance with the rules
of the American Arbitration Association then in effect. If the parties are
unable to agree on a single arbitrator, each party shall select an arbitrator
and the two arbitrators selected by the parties shall select a third arbitrator.
If three arbitrators are selected, they shall act by majority vote. Judgment may
be entered on the arbitrator's award in any court having jurisdiction.
10. Waiver of Breach. Any waiver of any breach of this Agreement shall
not be construed to be a continuing waiver or consent to any subsequent breach
on the part either of the Employee or of the Company.
11. Non-Assignment; Successors. Neither party hereto may assign his or
its rights or delegate his or its duties under this Agreement without the prior
written consent of the other party; provided, however, that (i) this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
the Company upon any sale of all or substantially all of the Company's assets,
or upon any merger, consolidation or reorganization of the Company with or into
any other corporation, all as though such successors and assigns of the Company
and their respective successors and assigns were the Company; and (ii) this
Agreement shall inure to the benefit of and be binding upon the heirs, assigns
or designees of the Employee to the extent of any payments due to them
hereunder. As used in this Agreement, the term "Company" shall be deemed to
refer to any such successor or assign of the Company referred to in the
preceding sentence.
12. Severability. If any term or provision of this Agreement is
determined to be illegal, unenforceable, or invalid in whole or in part for any
reason, such illegal, unenforceable, or invalid provisions or part(s) thereof
shall be stricken from this Agreement and such provision shall not affect the
legality, enforceability, or validity of the remainder of this section, then the
stricken provision shall be replaced, to the extent possible, with a legal,
enforceable, and valid provision that is similar in tenor to the stricken
provision as is legally possible.
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13. 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 will constitute one and the same instrument. Execution by exchange of
facsimile transmission shall be deemed legally sufficient to bind the signatory;
however, the Parties shall, for aesthetic purposes, prepare a fully executed
original version of this Agreement, which shall be the document filed with the
Securities and Exchange Commission.
14. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Florida, without giving
effect to the choice of law principles thereof. If it becomes necessary for any
party to institute legal action to enforce the terms and conditions of this
Agreement, and such legal action results in a final judgment in favor of such
party ("Prevailing Party"), then the party or parties against whom said final
judgment is obtained shall reimburse the Prevailing Party for all direct,
indirect or incidental expenses incurred, including, but not limited to, all
attorney's fees, costs and other expenses incurred throughout all negotiations,
arbitrations or appeals undertaken in order to enforce the Prevailing Party's
rights hereunder.
15. Entire Agreement. This Agreement constitutes the entire agreement
by the Company and the Employee with respect to the subject matter hereof and
except as specifically provided herein, supersedes any and all prior agreements
or understandings between the Employee and the Company with respect to the
subject matter hereof, whether written or oral. This Agreement may be amended or
modified only by a written instrument executed by the Employee and the Company.
16. Captions. The captions in this Agreement are for convenience and
reference only and in no way define, describe, extend or limit the scope of this
Agreement or the intent of any provisions hereof.
17. Number and Gender. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the Party or Parties, or their personal representatives, successors
and assigns may require.
18. Further Assurances. The Parties hereby agree to do, execute,
acknowledge and deliver or cause to be done, executed or acknowledged or
delivered and to perform all such acts and deliver all such deeds, assignments,
transfers, conveyances, powers of attorney, assurances, recipes, records and
other documents, as may, from time to time, be required herein to effect the
intent and purposes of this Agreement.
19. Advice of Counsel. EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS
AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT
LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF
THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY
REASON OF THE DRAFTING OR PREPARATION THEREOF.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
-------------------------------------
Xxxx Xxxxx
Beverage Network of Massachusetts, Inc.
By:
-------------------------------------
Xxxxx Xxxxxxx
Its: Secretary
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EXHIBIT A
EMPLOYEE BONUS PROGRAM
Employee shall be entitled to participate in the following bonus payment program
commencing upon the execution of his Employment Agreement until further notice
from Beverage Network of Massachusetts, Inc. (the "Company"):
For the purposes of this Exhibit A, Gross Profit shall be defined as the monthly
reported sales revenues generated by the Company from the sale of goods less the
cost of those goods sold during the sales month in question ("Gross Profit").
Prior to the commencement of each calendar quarter that this Agreement is in
effect and until further notice from the Company, the Company shall advise the
Employee in writing of the target Gross Profit amount for Beverage Network of
Massachusetts, Inc. for the coming sales quarter ("Profit Target").
The Employee shall receive a quarterly bonus equal to two percent (2%) of the
Company's quarterly Gross Profit for that quarter if the Company's Gross Profit
is within ten percent (10%) of the Profit Target for that quarter.
The Employee shall receive a quarterly bonus equal to three percent (3%) of the
Company's quarterly Gross Profit for that quarter if the Company's Gross Profit
meets or exceeds the Profit Target for that quarter.
The Employee shall not receive a quarterly bonus if the Company's quarterly
Gross Profit for that quarter is less than ninety percent (90%) of the Profit
Target.
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EXHIBIT B
SUMMARY OF EMPLOYEE HEALTH BENEFITS
For the purposes of this Employment Agreement and specifically Section 3 (c).
The Medical and Dental programs to which Employee and Employee's dependents are
enrolled at the execution of this Agreement are as follows:
Health care provider Tufts
Account # 47-05501
Monthly premium $761
Dental plan provider Altus Dental
Account# 7900-008
Quarterly premium $321
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