Exhibit 10.15
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of this 29th day of
June 2001, by and between Xxxxx Xxxxxxxxxxx ("Xxxxxxxxxxx" and/or "Executive"),
and Capital Beverage Corporation, a Delaware corporation ("Capital" and/or
"Company"). Executive's address is 000 Xxxx Xxxxxx Xxxx, Xxxxx Xxxx, Xxx Xxxxxx
00000. Capital's address is 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxx, Xxx Xxxx.
W I T N E S S E T H :
WHEREAS, Capital wishes to enter into an employment agreement with
Executive for a period of three (3) years from June 29, 2001 through June 28,
2004 with options in favor of Executive to continue this Employment Agreement
for an additional two (2) years; and
WHEREAS, Capital agrees to employ Executive as its Director of Sales and
Marketing in accordance with the terms and conditions set forth below:
1. TERM: Executive will be employed by Capital as the Director of Sales and
Marketing for a period of three (3) years from the date of this Agreement
("Effective Date") with options in favor of the Executive to continue this
Employment Agreement for an additional two (2) years, as provided in Section 16.
2. DUTIES AND RESPONSIBILITIES OF EMPLOYEE: The Executive shall serve as
the Director of Sales and Marketing of the Company and shall have such
authority, duties and responsibilities that are consistent with those commonly
given to an executive of the Company (which duties are executive in nature) and
such additional authority, duties and responsibilities as may from time to time
be conferred upon or assigned to the Executive by or pursuant to authority
delegated by the President of the Company which duties may include the
performance of services for subsidiaries of the Company. The Executive shall
devote all of his working time and efforts to the business and affairs of the
Company and/or its subsidiaries. Reasonable travel outside the State of New York
may be required in order to perform Executive's duties hereunder.
Notwithstanding the foregoing, Executive shall be entitled to maintain other
passive business interests or holdings that do not interfere with his ability to
provide the services required hereunder.
3. BASE SALARY: Capital will pay to Executive the base salary of One
Hundred and Ninety Two Thousand ($192,000) Dollars per year, less such
deductions as shall be required to be withheld by applicable law, payable in
equal weekly installments over a period of three (3) years from the Effective
Date, plus any extension of the agreement (as provided in Section 16).
3.1 ADDITIONAL COMPENSATION: In addition to the base salary, Executive will
receive the following additional compensation from the Company:
a. Executive will participate in any stock option plan, 401(k) plan
and other pension and benefit plans made available to other executive
officers of the Company, as determined by the Board of Directors;
b. Executive will receive reimbursement with respect to leased or
owned vehicle payments, gas, tolls, parking, mileage and other automobile
related expenses not to exceed $1,000 per month and subject to appropriate
receipts being presented by Executive to the appropriate financial officer
of Capital;
x.Xxxxxxx will continue to maintain in full force and effect the
health and welfare coverage for the Executive and his family providing such
benefits as were previously maintained by Prospect and/or Capital or any
equivalent coverage through a different carrier;
d. Capital will pay up to Five Hundred ($500) Dollars per month for
Executive to lease and use a mobile or cellular telephone to be used in the
course of the business of Capital and subject to appropriate receipts being
presented by Executive to the appropriate financial officer of Capital; and
e. Capital will reimburse Executive for up to $833 per month in travel
and entertainment expenses incurred in the course of the business of
Capital and subject to the Executive presenting to Capital's financial
staff the proper and necessary receipts and documentation, as required by
Capital.
3.2 INCENTIVE BONUS. The Executive will be paid by the Company a cash
incentive bonus, subject to the following terms and conditions:
a. In addition to his other compensation set forth above, the
Executive will receive a bonus payable on or before April 30, 2002 with
respect to calendar year 2001, if and only if, for the calendar year 2001,
Capital makes a net after tax profit of Five Hundred Thousand ($500,000)
Dollars or more in the calendar year 2001 in connection with Capital's
operations and sales conducted in the State of New York ("New York Area"),
excluding, inter alia, all operations and sales in all other states. The
bonus for the Executive will be calculated by paying the Executive 6.6666%
of the net after-tax profit of the Company and its subsidiaries on a
consolidated basis from operations and sales in the New York Area above
Five Hundred Thousand ($500,000) Dollars net after tax profit. The
Executive must remain in the employment of Capital through December 31,
2001 to be eligible to receive the bonus for the year 2001.
b. In addition to his other compensation set forth above, the
Executive will receive a bonus payable on or before April 30, 2003 with
respect to calendar year 2002, if and only if, for the calendar year 2002,
Capital makes a net after tax profit of Five Hundred Thousand ($500,000)
Dollars or more in the calendar year 2002 in connection with Capital's
operations and sales conducted in the New York Area, excluding, inter alia,
all operations and sales in all other states. The bonus for the Executive
will be calculated by paying the Executive 6.6666% of the net after -tax
profit of the Company and its subsidiaries on a consolidated basis from
operations and sales in the New York Area above Five Hundred Thousand
($500,000) Dollars net after tax profit. The Executive must remain in the
employment of Capital through December 31, 2002 to be eligible to receive
the bonus for the year 2002.
c. In addition to his other compensation set forth above, the
Executive will receive a bonus payable on or before April 30, 2004 with
respect to calendar year 2003, if and only if, for the calendar year 2003,
Capital makes a net after tax profit of Five Hundred Thousand ($500,000)
Dollars or more in the calendar year 2003 in connection with Capital's
operations and sales conducted in the New York Area, excluding, inter alia,
all operations and sales in all other states. The bonus for the Executive
will be calculated by paying the Executive 6.6666% of the net after-tax
profit of the Company and its subsidiaries on a consolidated basis from
operations and sales in the New York Area above Five Hundred Thousand
($500,000) Dollars net after tax profit. The Executive must remain in the
employment of Capital through December 31, 2003 to be eligible to receive
the bonus for the year 2003.
d. In calculating the bonuses provided in(a), (b) and (c) above, the
following shall apply:
(i) The $500,000 thresholdshall be prorated during any calendar
year in which Executive has not been employed for the complete
calendar year (ie., $250,000 of net after tax profits if Executive is
employed from July 1, 2001 through December 31, 2001 in calendar year
2001), other than in the case of termination of this Agreement for
"cause" (as defined in Section 9(c) below);
(ii) Sales and selling, general and administrative expenses of
Capital attributable to the business conducted outside of the New York
Area, shall be excluded from the calculation of the bonus;
(iii) There shall be no reduction in computing net after tax
profits with respect to the bonuses being paid to Xxxxxxx Xxxxxxxxxxx
and Xxxxxx Xxxxxxxxxxx;
(iv) The phone card business (Sales and all expenses) shall be
excluded from the calculation of the bonus;
(v) The calculations shall be determined by the Company auditor's
in accordance with generally accepted accounting principles, unless
otherwise specifically provided to the contrary in this Section
3.2(d);
(vi) In computing the after tax profits herein, Capital shall
apply the maximum amount of its net operating loss carry forwards as
permitted pursuant to the rules and regulations of the Internal
Revenue Code;
(vii) All expenses (including extraordinary expenses) incurred as
a result of the operations outside of the New York Area shall be
excluded from the calculation of the bonus; and (viii) In computing
the after tax profits herein, Capital shall not apply any amortization
or depreciation expenses. (e) If this Agreement is extended pursuant
to the provisions of Section 16, Executive shall be entitled to the
cash incentive bonus provided in this Section 3 during such periods.
4. BUSINESS EXPENSES: In the event that the Executive is required to expend
money for travel or for any extraordinary expense relating to the business of
Capital in excess of $833 per month (as provided in 3(e) above), the Executive
must procure prior written authorization from Xxxxxxx X. Xxxxxx, President or
Xxxxx Xxxxxxx, Secretary/Treasurer of Capital.
5. VACATION POLICY: Executive shall be entitled to paid vacation of four
(4) weeks per calendar year, pro rated as applicable for any partial year of
employment. If Executive does not use his allotted vacation, he may carry any
unused vacation over to the following years. Upon termination of employment,
Executive shall not be paid for any unused vacation days.
6. PERSONAL DAYS AND HOLIDAYS: Executive shall be entitled to be reimbursed
for six (6) personal leave days per year (earned at the rate of 1 personal day
for every 2 months of employment) and sick days in keeping with Capital's policy
regarding executives. Executive shall be entitled to holidays in accordance with
Capital's company policy.
7.BEREAVEMENT LEAVE: Executive shall be afforded five (5) days bereavement
leave in the event of the death of any member of his immediate family.
8. SEVERANCE: If Executive ceases to be employed by Capital for any reason,
Executive will receive four (4) weeks base salary for each year of service with
Capital, which salary shall be paid within 1 week of termination of employment.
Such payment will be pro-rated for the portion of Executive's first and final
year of service, if any year is a partial year. Executive will receive severance
pay only if Executive releases Capital of all claims. Notwithstanding the
foregoing, nothing contained herein will waive the Executive's right to contest
any termination and seek damages pursuant to the "Disputes and Arbitration
Provision" in Paragraph 15, in which case the severance pay will not be paid
until the matter has been resolved.
9. TERMINATION: The Executive's employment hereunder may be terminated upon
the following circumstances:
(a) Death. The Executive's employment hereunder shall be terminated
upon his death. Executive's base salary and other compensation shall cease
on such date, but Executive's estate shall be entitled to payment of base
salary and other compensation through the date of death plus the pro rated
amount (as calculated in 3.2(d)(i) above) of his bonus provided under
Section 3, if any.
(b) Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been absent from his
duties hereunder for ninety (90) consecutive days or for an aggregate
period of one-hundred-eighty (180) days during a consecutive period of
twelve (12) months, the Company may terminate the Executive's employment
hereunder. Upon termination for disability, Executive's base salary and
other compensation shall cease on such date but Executive shall be entitled
to payment of base salary and other compensation through the date of
termination plus a pro rated amount (as calculated in 3.2(d)(i) above) of
his bonus provided under Section 3, if any.
(c) Cause. The Company (upon majority vote of the Board) may terminate
the Executive's employment hereunder for "Cause". For purposes of this
Agreement, "Cause" shall mean: (i) repeated violations by the Executive of
the Executive's assigned duties (other than any such violations resulting
from the Executive's incapacity due to physical or mental illness) and
which are not remedied within ten (10) days after receipt of notice from
the Company specifying such violations; or (ii) immediately, after any such
actual violations after the issuance of a "Notice of Termination" (as
defined in Section 9 (d) hereof which specifies the same violation in (i)
above); (iii) a material breach by the Executive of any provision of this
Agreement if such material breach has not been cured within ten (10) days
after receipt of notice from the Company specifying such breach or (iv) any
illegal act or acts of the Executive involving moral turpitude,
embezzlement, misappropriation of property of the Company or any subsidiary
thereof or any other act involving dishonesty or fraud with respect to the
Company or any subsidiary thereof.
(d) Any termination of the Executive's employment by the Company
(other than termination pursuant to Section 9(a) hereof) shall be
communicated by written Notice of Termination to the Executive in
accordance with Section 19 hereof. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated.
(e) "Date of Termination" shall mean the following: (i) if the
Executive's employment is terminated by his death, the date of his death;
(ii) if the Executive's employment is terminated pursuant to Section 9(b)
hereof, ten (10) days after the Notice of Termination is given; (iii) if
the Executive's employment is terminated pursuant to Section 9(c) hereof,
the later of the date that the Notice of Termination is given and the date
specified in the Notice of Termination.
(f) If any third party shall bring an action against the Company, its
subsidiaries, agents, servants, shareholders, directors, officers or
employees due to an alleged breach of an employment agreement or violation
of a non-compete agreement by Executive, the Company may give a Notice of
Termination to the Executive terminating his employment on ten (10) days
notice if Executive is ultimately found, by a court or tribunal of
competent jurisdiction, to have violated such provisions. Executive hereby
represents that he is not a party to any agreement of employment or
agreement that restricts him from competition in any matter whatsoever.
(g) If the Executive wishes to contest the right of the Company to
terminate the Executive, the Executive may do so pursuant to the provisions
of Paragraph 15, "Disputes and Arbitration."
(h) Capital may not terminate Executive's employment without "cause"
prior to the next annual meeting of shareholders of Capital.
10. CONFIDENTIALITY: During the period of his employment and for a period
of six (6) months from the Date of Termination hereunder, the Executive shall
keep confidential and shall not divulge to any other party or use for the
Executive's benefit, directly or indirectly, any and all private, secret and
confidential information relating to such matters as the finances, methods of
operation and competition, pricing, marketing plans and strategies, equipment
and operational requirements and information of the Company, other than such
information which (a) is or becomes generally available to the public other than
as a result of a disclosure by Executive or (b) is required to be disclosed by
law or by a judicial, administrative or regulatory authority.
11. NON SOLICITATION OF EMPLOYEES: During the period of his employment and
for a period of six (6) months from the Date of Termination hereunder, Executive
shall not, either for his own account or for any person firm or company,
solicit, interfere with or endeavor to cause any employee of the Company or any
subsidiary of the Company to leave his or her employment or induce or attempt to
induce any such employee to terminate or breach his or her employment agreement
with the Company or any subsidiary of the Company. Executive shall not be bound
by the provisions of this Section if either (a) Capital ceases operations, (b)
Capital sells its business to a third party and Executive's employment is
terminated prior to the expiration of the term, (c) Capital merges with another
entity, is not the surviving entity and Executive's employment is terminated
prior to the expiration of the term or (d) if Executive is terminated by Capital
without "cause".
12. NONSOLICITATION OF CLIENTS: During the period of his employment and for
a period of six (6) months from the Date of Termination hereunder, Executive
shall not solicit, induce or attempt to induce any past, current or future
client of the Company or any subsidiary of the Company located within the New
York Area, to cease or refrain from doing business in whole or in part with the
Company or any subsidiary of the Company. Executive shall not be bound by the
provisions of this Section if either (a) Capital ceases operation, (b) Capital
sells its business to a third party and Executive's employment is terminated by
such third party prior to the expiration of the term, (c) Capital merges with
another entity, is not the surviving entity and Executive's employment is
terminated by such other entity prior to the expiration of the term or (d) if
Executive is terminated by Capital without "cause".
13. INJUNCTIVE RELIEF: The remedy at law for any breach of this Agreement
is and will be inadequate. In the event of a breach or threatened breach by
Executive of the provisions of this Agreement, the Company shall be entitled to
an injunction restraining Executive from soliciting employees or clients of the
Company or any subsidiary or from disclosing, in whole or in part, the private,
secret and confidential information described herein. Executive will be enjoined
from rendering any services to any person, firm, corporation, association or
other entity to whom such information has been disclosed or is threatened to be
disclosed to any business described in Section 10 or from otherwise being
connected with any business described in Sections 10, 11 or 12 or from otherwise
violating the provisions of this Agreement. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies available for such
breach or threatened breach including the recovery of damages from Executive.
14. SEPARATE COVENANTS: This Agreement shall be deemed to consist of a
series of separate covenants. Executive expressly agrees that the character,
duration and geographical scope of this Agreement are reasonable in light of the
circumstances as they exist on the date upon which this Agreement are reasonable
in light of the circumstances as they exist on the date upon which this
Agreement has been executed. However, should a determination nonetheless be made
by a court of competent jurisdiction at a later date, that character, duration
or geographical scope of this Agreement is unreasonable, then it is the
intention and the such a manner as to impose only restrictions on the conduct of
Executive which are reasonable in light of the circumstances as they then exist
and as necessary to assure the Company or Executive of the intended benefit of
this Agreement, enforced in such proceeding shall, for the purpose of such
proceeding, be deemed eliminated from this Agreement.
15. DISPUTES AND ARBITRATION: In the event that a dispute arises, including
an alleged breach of this Agreement, and the parties are not able to resolve
such dispute, then they shall submit their dispute to arbitration in the County
and City of New York in accordance with the prevailing Labor Arbitration Rules
of the American Arbitration Association. Additionally, any party may seek
injunctive relief from any Court of competent jurisdiction in the City of New
York or Long Island. Any party may enter any award made by the arbitrator as a
judgment in any Court of competent jurisdiction, including State and/or Federal
Courts located in the City of New York or Long Island. In the event that either
party has to seek injunctive relief or any provisional remedy, the parties to
this Agreement consent to jurisdiction in the Federal and/or State Courts
located in the City of New York or Long Island. Nothing contained herein shall
limit the right of the Company to seek immediate relief if injunctive relief is
necessary to protect the Company's rights.
16. OPTIONS:
A. This Employment Agreement shall be automatically extended for one
year from June 29, 2004 through June 28, 2005 unless Executive gives
Capital at least thirty (30) days written notice pursuant to the Notice
provision contained in Paragraph 19(B) of his intention to terminate this
Employment Agreement on June 28, 2004.
B. If this Employment Agreement is extended for the fourth year
pursuant to Paragraph 16(A) above, this Employment Agreement shall be
automatically extended for a second year from June 29, 2005 through June
28, 2006 unless Executive gives Capital at least thirty (30) days written
notice pursuant to the Notice provision contained in Paragraph 19(B) of his
intention to terminate this Employment Agreement on June 28, 2005.
17. RELOCATION OF CAPITAL: In the event that Capital moves its
principal offices more than fifty miles from New York City, Long Island and
Westchester, the Executive may at his election, upon twenty (20) days
written notice, terminate this Employment Agreement. In such event, the
Executive will continue to receive twenty-six (26) weeks of severance pay
(base salary only) provided that the Executive executes full and complete
General Releases to Capital in the form acceptable to Capital.
18. RIGHT TO SET-OFF: Executive acknowledges that if it is adjudicated that
Capital is entitled to payment due to its rights of indemnification from
Executive pursuant to the terms of that certain Asset Purchase Agreement, dated
as of May 4, 2001, between Capital, Prospect Beverage Inc. ("Prospect") and the
shareholders of Prospect, that Capital may off-set and withhold any bonus
payment payable to Executive hereunder. Capital may apply all of any bonuses
towards repayment of Executive's indemnification obligations. Any of such
bonuses that would otherwise be paid to Executive, shall be deposited into an
escrow account (with a third party to be mutually agreed upon between Capital
and Executive) pending the resolution of the matter.
19. MISCELLANEOUS:
A. Advice of Counsel. The parties acknowledge and confirm that they
have been advised by counsel as to the consequences of this Agreement and
that they fully intend to be bound by these provisions and that their
respective counsel have advised them that they believe that this Agreement
is valid and binding on all parties.
B. Notices. All notices made pursuant to the terms of this Agreement,
shall be made in writing, sent by Express Mail or by Federal Express, or by
personal delivery, to the parties at the following addresses:
a. If to Prospect or to any or all of the Matriscianis, or to the
Prospect Shareholders, notices to be sent to:
(i) Xxxxx Xxxxxxxxxxx
000 Xxxx Xxxxxx Xxxx
Xxxxx Xxxx, Xxx Xxxxxx 00000
-and-
(ii) Xxxxx Xxxxxx, Esq. at
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
b. If to Capital, notices to be sent to:
(i) Xx. Xxxxxxx Xxxxxx
Capital Beverage Corp.
000 Xxxxxxxx Xxxxxx
Xxxx Basin, Building 302
Brooklyn, New York 11231-1919
-and-
(ii) Xxxxxxx X. Xxxxx, Esq.
Xxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
C. Construction. This Agreement is made in the State of New York and shall
be governed by and construed in accordance with the laws of the State of New
York;
i. The parties agree that the language of this Agreement shall not be
interpreted against the drafter; and
ii. Should any provision of this Agreement be held to be illegal, void or
unenforceable, such provision shall be of no force and effect. However, the
illegality or unenforceability of any such provision shall have no effect upon,
and shall not impair the enforceability of, any other provision of this
Agreement.
D. Headings. The headings in this Agreement are solely for convenience and
shall be given no effect in the interpretation of this Agreement.
E. Waiver. Waiver by any party of any breach or its failure to exercise any
right under this Agreement shall not be deemed a continuing waiver or a waiver
of any subsequent breach or right. The failure of any party to take action at
the earliest possible time to redress any such breach or to exercise any such
right shall not deprive such party of the right to take action at any subsequent
time while such breach or condition giving rise to such right continues.
F. Severability. If any provision of this Agreement shall be held invalid
or unlawful, such invalidity shall not affect the other provisions hereof, and
to this extent the provisions of this Agreement are intended to be and shall be
deemed severable.
G. Binding. This Agreement shall be binding upon and inure to the benefit
of the respective successors and assigns of the parties.
H. Entire Agreement. This Agreement contains the full agreement of the
parties hereto concerning the subject matter hereof. This Agreement shall not be
modified, amended, altered, discharged or terminated, except pursuant to a
writing signed by the party(ies) charged hereof all prior representations,
promises or discussions are merged and superseded by this written contract.
CAPITAL BEVERAGE CORP.
BY: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
President
EXECUTIVE:
BY: /s/ Xxxxx Xxxxxxxxxxx
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Xxxxx Xxxxxxxxxxx
