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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into on December 31, 1996
("Employment Agreement"), by and among BEVERAGE WORKS, INC., a California
corporation ("Employer"), and FREDERIK X.X. XXXXXXXXX ("Employee"). This
Agreement shall be effective as of the date of the Employer's initial public
offering.
WHEREAS, Employer wishes to employ Employee as President and Chief
Executive Officer, with such other duties and responsibilities as Employer may
reasonably assign to Employee consistent with the nature and character of such
employment (the "Position"), and Employee wishes to accept such employment
subject to the terms and conditions of this Employment Agreement; and
WHEREAS, Employer is in the business of producing beer and other
beverages, and performs services related thereto, and markets such products and
services in the United States and in various foreign countries and has
accumulated valuable and confidential information including trade secrets and
know-how relating to technology, manufacturing procedures, formulas, machines,
marketing plans, sources of supply, business strategies, and other business
records; and
WHEREAS, the giving of the covenants contained herein is a condition
precedent to the employment of Employee in the Position and Employee
acknowledges that the execution of this Employment Agreement and the entering
into of these covenants is an express condition of his employment in the
Position and that said covenants are given in consideration for such employment
and the other benefits conferred upon him by this Employment Agreement.
NOW, THEREFORE, in consideration of such employment and other valuable
consideration, receipt of which is hereby acknowledged Employer and Employee
agree as follows:
1. DUTIES OF EMPLOYEE. Employer hereby employs Employee as its
President and Chief Executive Officer and agrees to cause Employee from time to
time to be elected or appointed to such corporate offices or positions. Employee
shall serve in such capacity at Employer's office, or at such other place as
Employer may direct provided that Employer shall not direct or cause Employee to
perform his services from an office outside of Orange County, California without
Employee's prior written consent. Employee's principal duties and
responsibilities shall consist of Employee's corporate offices and positions
which are set forth in the by-laws of Employer from time to time, over-all
responsibility for the development and implementation of Employer's business
strategy and such other duties and responsibilities consistent with Employee's
corporate offices and positions which the Board of Directors of Employer, from
time to time may assign to Employee. Employee shall perform such other services
and duties as may from time to time be assigned to Employee by Employer's Board
of Directors provided that such other services and duties are not inconsistent
with any other term of this Employment Agreement. Except during vacation periods
or in accordance with Employer's personnel policies covering executive leaves
and reasonable periods of illness or other incapacitation, Employee shall devote
full-time his services to Employer's business and
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interests in a manner consistent with Employee's title and office and Employer's
needs for his services. Employee shall perform the duties of Employee's office
and those assigned to Employee by Employer's Board of Directors with fidelity,
to the best of Employee's ability, and in the best interests of Employer.
2. TERM OF EMPLOYMENT. Employer hereby employs Employee, and Employee
hereby accepts employment with Employer, for four (4) years commencing on the
date of this Employment Agreement ("Employment Period"). Notwithstanding
anything in this Section 2 to the contrary, this Employment Agreement may be
terminated at any time in accordance with Section 6.
3. COMPENSATION OF EMPLOYEE.
3.1 Base Compensation. As compensation for Employee's services
hereunder, Employee shall receive a base salary (the "Base Salary") at an annual
amount of not less than One Hundred Fifty-Two Thousand Dollars ($152,000)
payable in bi-monthly installments of six thousand, three hundred thirty-three
($6,333) each, or a ratable portion thereof for periods of less than one-half
month. The Board or the Compensation Committee of the Board shall review the
Base Salary at least annually as of the payroll date nearest the anniversary of
this Employment Agreement; and Employer agrees to make such increases in the
Base Salary as the Board may approve from time to time. Once established at a
specific increased annual rate, the Base Salary may not be reduced by Employer
without Employee's written consent.
3.2 Car Allowance. In addition, Employee shall be entitled to a
monthly car allowance of Five Hundred Dollars ($500), which shall be paid to
Employee concurrently with the second (2nd) installment of Employee's monthly
base compensation. The monthly car allowance shall be increased by Fifty Dollars
($50) each calendar year commencing January 1, 1997.
3.3 Non-accountable T&E Allowance. In addition, Employee shall be
entitled to a monthly non-accountable travel & entertainment allowance of Six
Hundred Dollars ($600), which shall be paid to Employee concurrently with the
second (2nd) installment of Employee's monthly base compensation.
3.4 Bonuses. The Board of Directors, (or a management compensation
committee of the board of directors, if any), may award a cash bonus to
Employee at the board's or committee's discretion.
4. EXPENSE REIMBURSEMENTS. Employee shall promptly be reimbursed for
reasonable and actual out-of-pocket expenses incurred by Employee in performance
of Employee's duties and responsibilities hereunder in accordance with
Employer's established personnel policy covering executive officer expense
reimbursements, as such policy may be amended, revised or otherwise changed from
time to time. Employee shall furnish proper vouchers and expense reports and
shall be reimbursed only for those expenses which shall be reimbursable.
5. VACATION, SICK LEAVE AND OTHER FRINGE BENEFITS. Employee shall be
entitled to four (4) weeks vacation per every twelve (12) month period of
employment
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hereunder and no more than two (2) weeks vacation at a time. Employee shall also
be entitled to leaves for illness or other incapacitation as is consistent with
Employee's title and Employer's needs for Employee's services, except as
otherwise provided for in Section 6.2. Commencing with calendar year 1997,
Employee shall receive Two Thousand Five Hundred Dollars ($2,500) for 1997 Five
Thousand Dollars ($5,000) annually thereafter for life insurance, which Employee
shall have sole authority to appoint beneficiaries, and shall receive Two
Thousand Five Hundred Dollars ($2,500) for 1997 and Five Thousand Dollars
($5,000) annually thereafter for personal legal and accounting services.
Employee shall be entitled to full health and dental insurance coverage,
including covering any deductible, for Employee, Employee's spouse and minor
children. Employee shall be entitled during Employee's employment hereunder to
share or participate in such other "fringe" benefit plans or programs as shall
be made available to employees employed by Employer generally, in accordance
with Employer's established personnel policies, if any, or as established,
amended, revised or otherwise changed from time to time, covering employee
benefits.
6. TERMINATION.
6.1 Termination by Employer for Cause. Employer may terminate this
Employment Agreement and Employee's employment hereunder for Cause (as defined
herein) any time effective upon written notice to Employee. As used herein, the
term "Cause" shall mean:
6.1.1 Habitual neglect in the performance of Employee's
material duties as set forth in Section 1 which continues uncorrected for a
period of thirty (30) days after written notice thereof by Employer to Employee;
6.1.2 Employee's confession or conviction of theft, fraud,
embezzlement, or any other crime involving dishonesty with respect to Employer
or any parent, subsidiary or affiliate of Employer;
6.1.3 Gross negligence involving misfeasance or nonfeasance by
Employee in the performance of Employee's material duties as set forth in
Section 1 which continues uncorrected for a period of thirty (30) days after
written notice thereof by Employer to Employee;
6.1.4 Material violation by Employee of the provisions of
Section 8; or
6.1.5 The representations in Section 7 were materially false as
of the date of this Employment Agreement.
In no event shall the results of Employer's operations or any business agreement
made in good faith by Employee constitute an independent basis for termination
for cause of Employee's employment under this Employment Agreement. Any
termination of Employee's employment for cause must be authorized by a majority
vote of the Board taken not later than twelve (12) months after a majority of
the members of the Board (other than Employee) have actual
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knowledge of the occurrence of the event or conduct constituting the cause for
such termination. If Employee's employment under this Employment Agreement is
terminated by Employer for cause, then Employee shall be entitled to receive his
Base Salary through the effective date of such termination.
6.2 Termination Upon Death or Disability. This Employment Agreement
and Employee's employment hereunder shall terminate upon Employee's death or
Disability (as defined herein). For this purpose "Disability" means incapacity,
whether by reason of physical or mental illness or disability, which prevents
Employee from substantially performing Employee's material duties as set forth
in Section 1 for six (6) months, or for shorter periods aggregating six (6)
months in any twelve (12) successive calendar months. Upon termination for
death, and unless Employer shall have in force a disability insurance policy
providing for benefits in an amount at least equal thereto, upon termination for
Disability, Employer shall continue to pay the compensation payments pursuant to
Section 3 to the surviving spouse of Employee (or if there is none to Employee's
estate) in the case of death and to Employee or Employee's court appointed
conservator in the case of Disability until the date three (3) months
thereafter. Termination for death shall become effective upon the occurrence of
such event and termination for Disability shall become effective upon written
notice to Employee.
6.3 Events Upon Termination. The termination of this Employment
Agreement pursuant to Section 6.1 and 6.2 shall also result in the termination
of all rights and benefits of Employee under this Employment Agreement except
for any rights to compensation accrued under Section 3 prior to the date of
termination or rights to expense reimbursement under Section 4.
6.4 Payments As Liquidated Damages. In the event Employer elects to
terminate this Employment Agreement prior to the scheduled termination date for
any reason other than Cause, Employer shall continue to make the compensation
payments specified in Section 3 hereof for the entire term, through and
including the scheduled termination date, and such payments shall be deemed to
be liquidated damages for the damage done to Employee's reputation and for
having foregone the opportunity to pursue other employment opportunities while
performing services pursuant to this Employment Agreement. Employer hereby
agrees that such amount shall constitute a realistic and reasonable valuation of
the damages with respect to Employee's claims, and Employee shall not be
required to mitigate his damages by seeking other business, as the damages
resulting to him as a result of the loss of the unique business arrangement set
forth herein could not be mitigated by seeking business elsewhere, nor shall any
monies earned by Employee in any capacity after such termination, attempted
termination or breach act to reduce such damages.
7. EMPLOYEE'S REPRESENTATIONS. Employee represents and warrants that
Employee is free to enter into this Employment Agreement and to perform each of
the provisions contained herein. Employee represents and warrants that Employee
is not restricted or prohibited, contractually or otherwise, from entering into
and performing this Employment Agreement, and that Employee's execution and
performance of this Employment Agreement is
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not a violation or breach of any agreement between Employee and any other person
or entity.
8. NONDISCLOSURE OF CONFIDENTIAL INFORMATION;
OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS;
NON COMPETITION; COVENANT NOT TO COMPETE.
8.1 Nondisclosure of Confidential Information. During the term of this
Employment Agreement and at all times thereafter, Employee will keep
confidential and will not directly or indirectly divulge to anyone nor use or
otherwise appropriate for Employee's own benefit, or on behalf of any other
person, firm, partnership or corporation by whom Employee might subsequently be
employed or otherwise associated or affiliated with, any Confidential
Information (as defined herein). For this purpose, "Confidential Information"
means any and all customer lists, product formulations, arrangements with
distributors and parties for whom Employer does contract brewing, marketing
information or strategies, trade secrets or other confidential information of
any kind, nature or description concerning any matters affecting or relating to
the business of Employer or any affiliate which derives economic value, actual
or potential, from not being generally known to the public or to other persons
who can obtain economic value from its disclosure or use and which is subject to
efforts by Employer that are reasonable under the circumstances to maintain its
secrecy.
8.2 Employer Intellectual Property Rights. All intellectual property
rights, whether or not patentable or copyrightable, which (i) are made or
developed with the equipment, supplies, facilities, product formulations, trade
secrets, time or other assets of Employer; (ii) relate to the business,
including anticipated research or development, of Employer, or (iii) result from
work performed by Employee for Employer, are and shall remain the sole property
of Employer, and upon request made by Employer, Employee shall assign any and
all rights, including patents and patent rights, trade xxxx and trade dress
rights, Employee may have therein to Employer. This Section 8.2 does not apply
to any intellectual property rights which are the subject of Section 2870 of the
California Labor Code.
8.3 Employer Materials. All reports and analysis, designs, drawings,
contracts, contractual arrangements, specifications, computer software, computer
hardware and other equipment, computer printouts, computer disks, documents,
memoranda, notebooks, correspondence, files, lists and other records, and the
like, and all photocopies or other reproductions thereof, affecting or relating
to the business of Employer which Employee shall prepare, use, construct,
observe, possess or control ("Employee Materials"), shall be and remain the sole
property of Employer. Upon termination of this Employment Agreement, Employee
shall deliver promptly to Employer all such Employer Materials.
8.4 Certain Restrictions on Business Activities. During the term of
this Employment Agreement, Employee agrees that:
8.4.1 Business Activities. He will not, directly or indirectly, own
an interest in, operate, join, control or participate in, or be connected as an
officer, employee,
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agent, independent contractor, partner, shareholder or principal of any
corporation, partnership, proprietorship, firm, association, person or other
entity providing services and/or products or a combination thereof which
directly or indirectly compete with Employer's business, and he will not
undertake planning for or organization of any business activity competitive with
Employer's business or combine or conspire with other employees or
representatives of Employer's business for the purpose of organizing any such
competitive business activity, except the purchase of less than ten percent
(10%) of the stock of a publicly traded company which is not affiliated with
Employer.
8.4.2 Solicitation of Customers, Etc. He will not, directly or
indirectly, either for himself or for any other person, firm or corporation,
divert or take away or attempt to divert or take away (and after the term of
this Employment Agreement, call on or solicit or attempt to call on or solicit)
any of Employer's customers or distributors, including but not limited to, those
upon whom Employee called or whom Employee solicited or serviced or with whom
Employee became acquainted while engaged as an employee in Employer's business.
8.4.3 Solicitation of Employees, Etc. He will not, directly or
indirectly or by action in concert with others, induce or influence (or seek to
induce or influence) any person who is engaged (as an employee, agent,
independent contractor or otherwise) by Employer to terminate his or her
employment or engagement.
8.5 Covenant Not to Compete.
8.5.1 Obligations of Employee. Employee acknowledges that, as a key
management employee, Employee will be involved, on a high level, in the
development, implementation and management of the business strategies and plans
of Employer, which shall also consist of such other business, units, divisions,
subsidiaries or other entities of Employer as Employer shall determine in its
sole discretion from time to time (the "Business"). By virtue of Employee's
unique and sensitive position and special background, employment of Employee by
a competitor of Employer represents a serious competitive danger to Employer and
the Business, and the use of Employee's talent and knowledge and information
about Employer or the Business can and would constitute a valuable competitive
advantage over Employer and the Business. In view of the foregoing, Employee
covenants and agrees that, if Employee's employment with Employer is terminated
by Employee or for cause at any time, for a period of one year after the date of
such termination, but not longer than the term of this Employment Agreement
under Section 2 had employment not been terminated, Employee will not engage or
be engaged, in any capacity, directly or indirectly, including but not limited
as employee, agent, consultant, manager, executive, owner or stockholder (except
as a passive investor holding less than a 1% equity interest in any enterprise
the securities of which are publicly traded) in any business entity doing
business in the United States engaged in competition with any business conducted
by Employer on the date of termination. This Covenant Not to Compete shall
survive the termination or expiration of the other provisions of this Employment
Agreement. If any court determines that this Covenant Not to Compete, or any
part thereof, is unenforceable because of the duration or geographic scope of
such provision, such court shall have the power
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to reduce the duration or scope of such provision, as the case may be, and, in
its reduced form, such provision shall then be enforceable.
8.5.2 Continuing Obligations. Employee agrees that, for one year
following his termination of employment with Employer, Employee shall keep
Employer informed of the identification of Employee's employer and the nature of
such employment or of Employee's self-employment. Employer agrees that, within
fifteen (15) days after receiving notice pursuant to this section of the
identification of the prospective employer, the nature of the employment or
self-employment or any change therein, Employer will advise Employee as to
whether such employment constitutes a violation of Section 8.5.1 hereof.
8.5.3 Injunctive Relief. Employee acknowledges that the
violation of the covenants contained in this Section 8.5 would be detrimental
and cause irreparable injury to Employer and its affiliates which could not be
compensated by money damages. Employee agrees that an injunction from a court of
competent jurisdiction is the appropriate remedy for these provisions, and
consents to the entry of an appropriate judgment enjoining Employee from
violating these provisions in the event there is a find of their breach.
8.6 Severability. Employee agrees, in the event that any provision
of this Section 8 or any word, phrase, clause, sentence or other portion thereof
shall be held to be unenforceable or invalid for any reason, such provision or
portion thereof shall be modified or deleted in such a manner so as to make this
Section 8 as modified legal and enforceable to the fullest extent permitted
under applicable laws. The validity and enforceability of the remaining
provisions or portions thereof shall not be affected thereby and shall remain
valid and enforceable to the fullest extent permitted under applicable laws. A
waiver of any breach of the provisions of this Section 8 shall not be construed
as a waiver of any subsequent breach of the same or any other provision.
9. MERGER, ETC., OF EMPLOYER. In the event of a future disposition of
(or including) the properties and business of Employer, substantially or in its
entirety, by merger, consolidation, sale of assets, or otherwise, then Employer
may assign this Employment Agreement and all of the rights and obligations of
Employer under this Employment Agreement to the acquiring or surviving
corporation; provided, that such acquiring or surviving corporation shall assume
in writing all of the obligations of the companies under this Employment
Agreement; and provided further, that the companies (in the event and so long as
they or either of them remains in business as an independent going enterprise)
shall remain jointly and severally liable for the performance of their
obligations under this Employment Agreement in the event of an unjustified
failure of the acquiring corporation to perform its obligations under this
Employment Agreement.
10. GENERAL PROVISIONS.
10.1 Severable Provisions. The provisions of this Employment
Agreement are severable, and if any one or more provisions may be determined to
be judicially unenforceable,
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in whole or in part, the remaining provisions shall nevertheless be binding and
enforceable.
10.2 Assignment. Neither this Employment Agreement nor any of the
rights or obligations of Employee or Employer hereunder shall be assignable.
10.3 Arbitration. Any dispute arising under or in connection with
this Employment Agreement shall be subject to arbitration before the American
Arbitration Association ("AAA") at the facility nearest Employer's principal
place of business.
10.4 Attorneys' Fees. If any legal action arises under this
Employment Agreement or by reason of any asserted breach of it, the prevailing
party shall be entitled to recover all costs and expenses, including reasonable
attorneys' fees, incurred in enforcing or attempting to enforce any of the
terms, covenants or conditions, including costs incurred prior to commencement
of legal action, and all costs and expenses, including reasonable attorneys'
fees, incurred in any appeal from an action brought to enforce any of the terms,
covenants or conditions.
10.5 Notices. Any notice to be given to Employer under the terms of
this Employment Agreement shall be addressed to Employer at the address of
Employer's principal place of business, with a copy to, Xxxxx & Xxxxxxxx, P.C.,
00 Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000-0000, Attn: Xxxxx X.
Xxxxx, Esq., and any notice to be given to Employee shall be addressed to
Employee at his home address last shown on the records of Employer, or at such
other address as either party may hereafter designate in writing to the other.
Any notice required or permitted under this Employment Agreement shall be in
writing and shall be deemed effective: (i) upon receipt in the event of delivery
by hand, including delivery made by private delivery or overnight mail service
where either the recipient or delivery agent executes a written receipt or
confirmation of delivery; or (ii) 48 hours after deposited in the United States
mail, registered or certified mail, return receipt requested, postage prepaid.
10.6 Waiver. Either party's failure to enforce any provision or
provisions of this Employment Agreement shall not in any way be construed as a
waiver of any such provision or provisions, or prevent that party thereafter
from enforcing each and every other provision of this Employment Agreement.
10.7 Entire Agreement; Amendments. This Employment Agreement
supersedes any and all other agreements, either oral or in writing, between the
parties hereto with respect to the employment of Employee by Employer and
contains all of the covenants and agreements between the parties with respect to
the employment of Employee by Employer. Each party to this Employment 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 are not embodied herein, and that no other agreement, statement
or promise not contained in this Employment Agreement will be effective only if
it is in writing signed by the party to be charged.
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10.8 Titles and Headings. Titles and headings to sections of this
Employment Agreement are for the purpose of reference only and shall in no way
limit, define or otherwise affect the interpretation or construction of such
provisions.
10.9 Counterparts. This document may be executed in one or more
counterparts each of which shall be deemed to be an original and all of which
together shall constitute a single agreement.
10.10 Governing Law. This Employment Agreement shall be governed by
and construed in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement
as of the day and year first above written.
EMPLOYEE:
/s/ FREDERIK X.X. XXXXXXXXX
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FREDERIK X.X. XXXXXXXXX
EMPLOYER:
BEVERAGE WORKS, INC.
a California corporation
/s/ XXXX XXXX
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By: XXXX XXXX
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Title: COO & CFO
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