Exhibit 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (THE "AGREEMENT") is made as of this 1st day of
March, 2000, by and between Xxxxxx.xxx, Inc., a Delaware corporation (the
"COMPANY"), and Xxxx Xxxxxxxx (the "EXECUTIVE").
RECITALS:
A. The Company is actively engaged in operating an e-commerce site
(Xxxxxx.xxx) which facilitates both the purchase and sending of liquor, wine,
and other alcoholic or non-alcoholic beverage by businesses and individuals, for
gift delivery and personal consumption.
B. The Company is currently expanding its business by further utilizing its
existing network of affiliates in the alcoholic beverage industry to reduce the
cost and increase the efficiency at each tier of the alcoholic beverage
distribution system.
C. Executive is a founding shareholder and executive of the Company and has
obtained certain unique and particular talents and abilities in managing and
developing the Company's business.
D. The Company is undergoing certain fundamental changes to its business
plan, capitalization and management structure pursuant to which Executive is
relinquishing control of the Company.
E. The Company desires to assure itself of the continued availability of
Executive's talents and abilities and Executive desires to secure continued
employment with the Company, subject to the terms, conditions and covenants
hereinafter set forth;
F. The Executive has previously executed and delivered the
Confidentiality/Proprietary Information Agreement dated January 7, 2000 attached
hereto as EXHIBIT A (the "CONFIDENTIALITY AGREEMENT").
NOW, THEREFORE, in consideration of the foregoing and the agreements,
covenants and conditions set forth herein, the Executive and the Company hereby
agree as follows:
ARTICLE I
EMPLOYMENT
1.1 EMPLOYMENT. The Company hereby employs, engages and hires Executive,
and Executive hereby accepts employment, upon the terms and conditions set forth
in this Agreement. The Executive shall serve as the Founder, Chairman of the
Board and as Chief Sales Officer. Executive shall have and fully perform such
duties and responsibilities that are commensurate with her position, as may be,
from time to time, assigned to her by the Board of Directors of the
Company and/or the Chief Executive Officer of the Company. Executive shall
report directly to the Chief Executive Officer of the Company.
1.2 ACTIVITIES AND DUTIES DURING EMPLOYMENT. Executive represents and
warrants to the Company that she is free to accept employment with the Company,
and that she has no prior or other commitments or obligations of any kind to
anyone else which would hinder or interfere with her acceptance of her
obligations under this Agreement, or the exercise of her best efforts as an
officer and employee of the Company. During the Employment Term (as defined
below), Executive agrees:
(a) to devote substantially all of her business, time, attention and
efforts to the faithful and diligent performance of her services to the
Company;
(b) to faithfully serve and further the interests of the Company in
every lawful way, giving honest, diligent, loyal and cooperative service to
the Company; and
(c) to comply with all rules and policies which, from time to time,
may be adopted by the Company.
ARTICLE II
TERM
2.1 TERM. The term of employment under this Agreement shall be three (3)
years (the "INITIAL TERM"), commencing on the date of the Agreement, which
Employment Term shall automatically renew for one year periods unless
terminated by either party by written notice not less than sixty (60) days prior
to expiration of the then-current term (such term of employment, as it may be
extended or terminated, is herein referred to as the "EMPLOYMENT TERM").
2.2 TERMINATION. The employment of Executive may be terminated as
follows:
(a) After the Initial Term, by either party upon at least sixty (60)
days notice to the other party, in which event such termination shall be
effective upon expiration of the notice period. If Executive terminates her
employment pursuant to this SECTION 2.2(a), such termination is hereinafter
referred to as a "VOLUNTARY TERMINATION".
(b) By the Company immediately for "CAUSE." For the purpose of this
Agreement, "CAUSE" shall mean (i) conduct amounting to fraud, embezzlement,
or willful or illegal misconduct in connection with Executive's duties
under this Agreement; (ii) the indictment or conviction of Executive by a
court of proper jurisdiction of (or her written, voluntary and freely given
confession to) a crime which constitutes a felony and/or results in
material injury to the Company's property, operation or reputation; (iii)
breach of the Confidentiality Agreement; or (iv) substantial and continued
failure to perform duties
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reasonably directed by the Board of Directors or Chief Executive Officer
after written notice from the Company and a ten (10) day opportunity to
cure.
(c) Upon the death of Executive.
(d) By either party upon the Total Disability of the Executive. The
Executive shall be considered to have a Total Disability for purposes of
this Agreement if she is unable by reason of accident or illness to
substantially perform her employment duties, and is expected to be in such
condition for periods totaling six (6) months (whether or not consecutive)
during any consecutive period of twelve (12) months. During a period of
disability prior to termination hereunder, Executive shall continue to
receive her base salary.
(e) By the Executive upon five (5) business days notice to the Company
for Good Reason, which notice shall state the reason for termination. For
the purpose of this agreement, "GOOD REASON" shall mean:
(i) the assignment to the Executive of any duties inconsistent
with the Executive's position (including status, offices and titles,
office facilities, staff support and reporting requirements),
authority, duties or responsibilities as contemplated by ARTICLE I of
this Agreement, or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities
without prior written consent of the Executive, excluding for this
purpose an isolated action not taken in bad faith and which is
remedied by the Company within five (5) business days after receipt
of written notice thereof given by the Executive;
(ii) any material failure by the Company to comply with any of
the provisions of this Agreement, other than an isolated failure not
occurring in bad faith and which is remedied by the Company within
five (5) business days after receipt of written notice thereof given
by the Executive;
(iii) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(iv) any action taken by the Company, including a proxy
solicitation, failure to nominate and/or recommend Executive as a
director of the corporation, that results in or is intended to result
in the removal of Executive from the Board of Directors.
If there is any dispute between the parties as to whether Cause, Good Reason, or
Total Disability exists, either party may submit the dispute to binding
arbitration. Any such arbitration proceeding will be conducted in Chicago,
Illinois and except as otherwise provided in this Agreement, will be conducted
under the auspices of JAMS/Endispute, in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association. The
arbitrator(s) shall allow such discovery as the arbitrator(s) determines
appropriate under the circumstances. The arbitrator(s) shall
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determine which party, if either, prevailed and shall award the prevailing
party its costs and attorneys fees. The award and decision of the arbitrator
shall be conclusive and binding on all parties to this Agreement and judgment
on the award may be entered in any court of competent jurisdiction. The
parties acknowledge and agree that any arbitration award may be enforced
against either or both of them in a court of competent jurisdiction and each
waives any right to contest the validity or enforceability of such award. The
parties further agree to be bound by the provisions of any statute of
limitations which would be applicable in a court of law to the controversy or
claim which is the subject of any arbitration proceeding initiated under this
Agreement. The parties further agree that they are entitled in any
arbitration proceeding to the entry of an order, by a court of competent
jurisdiction pursuant to an opinion of the arbitrator, for specific
performance of any of the requirements of this Agreement.
2.3 CESSATION OF RIGHTS AND OBLIGATIONS: SURVIVAL OF CERTAIN PROVISIONS. On
the date of expiration or earlier termination of the Employment Term for any
reason, all of the respective rights, duties, obligations and covenants of the
parties, as set forth herein, shall, except as specifically provided herein to
the contrary, cease and become of no further force or effect as of the date of
said termination, and shall only survive as expressly provided for herein.
2.4 TREATMENT OF EXECUTIVE UPON TERMINATION OF EMPLOYMENT. In lieu of any
severance under any severance plan that the Company may then have in effect, and
subject to any set-offs for any damages suffered by the Company or other amounts
owed by the Executive to the Company, the Company shall pay to the Executive,
and the Executive shall be entitled to receive in one lump sum payment, the
following amounts within thirty (30) days of the date of a termination of the
Employment Term:
(a) VOLUNTARY TERMINATION OR FOR CAUSE. Upon a Voluntary Termination
of the Employment Term by the Executive, the expiration of the Employment
Term because the Executive elects not to extend the Employment Term, or a
termination of the Employment Term for Cause by the Company, the Executive
shall be entitled to receive her current Base Salary (as defined herein)
and expense reimbursement through the date of termination and pro rata
portion of the prior year's Performance Bonus (as defined herein).
(b) DEATH OR TOTAL DISABILITY. Upon the termination of the Employment
Term by either party by reason of the Death or Total Disability of the
Executive, the Executive shall be entitled to receive (i) Base Salary and
expense reimbursement through the date of termination, (ii) an amount equal
to the prior year's Performance Bonus, and (iii) an amount equal to one
year of her current Base Salary.
(c) GOOD REASON; INVOLUNTARY PRIOR TO MARCH 1, 2002. Upon the
termination of the Employment Term by the Executive for Good Reason, or by
the Company in breach of this Agreement in either case at any time before
March 1, 2002, the Executive shall be entitled to receive (i) the Base
Salary and expense reimbursement through the date of termination, (ii) the
balance of her current Base Salary due through the end of the Initial
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Term, and (iii) an amount equal to the number of years remaining (including
the year of termination) in the Initial Term multiplied by the prior year's
Performance Bonus.
(d) GOOD REASON; INVOLUNTARY AFTER INITIAL TERM. Upon the expiration
of the Employment Term by the Company by not electing to extend the
Employment Term, by the Company pursuant to SECTION 2.2 (a), by the Company
in breach of this Agreement after March 1, 2002, or by Executive for Good
Reason after March 1, 2002, the Executive shall be entitled to receive (i)
her Base Salary and expense reimbursement through the date of termination,
(ii) one year's Base Salary, and (iii) an amount equal to the prior year's
Performance Bonus.
In addition, the Executive shall be entitled to continue to receive, at the
Company's sole expense, all health and disability benefits for a period of one
year after the termination date. If the Executive's employment is terminated in
the first year of the Initial Term, her prior year "Performance Bonus" shall be
deemed to be $50,000.
2.5 NO MITIGATION OF DAMAGES DEFENSE. The Company shall not be entitled to
interpose in any forum or proceedings whatsoever the defense of "mitigation of
damages," notwithstanding that the Executive shall have entered into or could
have entered into any other employment.
ARTICLE III
COMPENSATION OF BENEFITS
3.1 COMPENSATION.
(a) During the Employment Term, the Company shall pay Executive a base
salary ("BASE SALARY") of One Hundred Fifty Thousand Dollars ($150,000)
per year. The Base Salary will be reviewed annually by the Board of
Directors with a view to increasing it. The Company shall not be permitted
to reduce the Base Salary.
(b) The Company shall, in addition to Executive's Base Salary, pay
Executive an annual performance bonus (the "PERFORMANCE BONUS") based on
the Company obtaining certain targeted financial goals, as established by
the Board of Directors of the Company, after consultation with the
Executive.
(c) The Company may pay such additional bonuses as the Board of
Directors of the Company may deem appropriate.
(d) The Company shall pay Executive a bonus of $50,000 within thirty
days of the closing of an initial public offering or other significant
financing event for the Company.
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3.2 PAYMENT. All compensation shall be payable in intervals in accordance
with the general payroll payment practice of the Company. The compensation shall
be subject to such withholdings and deductions by the Company as are required by
law.
3.3 BUSINESS EXPENSES.
(a) REIMBURSEMENT. The Company shall reimburse the Executive for all
reasonable, ordinary, and necessary business expenses incurred by her in
connection with the performance of her duties hereunder, including, but not
limited to, ordinary and necessary travel expenses and entertainment
expenses.
(b) ACCOUNTING. The Executive shall provide the Company with an
accounting of her expenses, which accounting shall clearly reflect which
expenses are reimbursable by the Company. The Executive shall provide the
Company with such other supporting documentation and other substantiation
of reimbursable expenses as will conform to Internal Revenue Service or
other requirements. All such reimbursements shall be payable by the Company
to the Executive within a reasonable time after receipt by the Company of
appropriate documentation therefor.
3.4 OTHER BENEFITS. Executive shall be entitled to participate in any
retirement, pension, profit-sharing, stock option, health plan, incentive
compensation and welfare or any other benefit plan or plans of the Company which
may now or hereafter be in effect for executive officers of the Company. The
Company shall pay to Executive a car allowance of $500 per month.
ARTICLE IV
MISCELLANEOUS
4.1 NOTICES. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given, delivered and received
(a) when delivered, if delivered personally, (b) four days after mailing, when
sent by registered or certified mail, return receipt requested and postage
prepaid, (c) one business day after delivery to a private courier service, when
delivered to a private courier service providing documented overnight service,
and (d) on the date of delivery if delivered by telescope, receipt confirmed,
provided that a confirmation copy is sent on the next business day by first
class mail, postage prepaid, in each case addressed as follows:
To Executive at her home address.
To Company at: Xxxxxx.xxx, Inc.
0000 X. Xxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
Ph: 000-000-0000
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Fax: 000-000-0000
With a copy to: Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Any party may change its address for purposes of this paragraph by giving the
other party written notice of the new address in the manner set forth above.
4.2 ENTIRE AGREEMENT; AMENDMENTS, ETC. This Agreement contains the entire
agreement and understanding of the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter thereof. No
modification, amendment, waiver or alteration of this Agreement or any provision
or term hereof shall in any event be effective unless the same shall be in
writing, executed by both parties hereto, and any waiver so given shall be
effective only in the specific instance and for the specific purpose for which
given.
4.3 BENEFIT. This Agreement shall be binding upon, and inure to the benefit
of, and shall be enforceable by, the heirs, successors, legal representatives
and permitted assignees of Executive and the successors, assignees and
transferees of the Company. This Agreement or any right or interest hereunder
may not be assigned by Executive without the prior written consent of the
Company.
4.4 NO WAIVER. No failure or delay on the part of any party hereto in
exercising any right, power or remedy hereunder or pursuant hereto shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder or pursuant thereto.
4.5 SEVERABILITY. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law
but, if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement. If any part of any covenant or
other provision in this Agreement is determined by a court of law to be overly
broad thereby making the covenant unenforceable, the parties hereto agree, and
it is their desire, that the court shall substitute a judicially enforceable
limitation in its place, and that as so modified the covenant shall be binding
upon the parties as if originally set forth herein.
4.6 COMPLIANCE AND HEADINGS. Time is of the essence of this Agreement. The
headings in this Agreement are intended to be for convenience and reference
only, and shall not define or limit the scope, extent or intent or otherwise
affect the meaning of any portion hereof.
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4.7 GOVERNING LAW. The parties agree that this Agreement shall be governed
by, interpreted and construed in accordance with the laws of the State of
Illinois, and the parties agree that any suit, action or proceeding with respect
to this Agreement shall be brought in the courts of Xxxx County in the State of
Illinois or in the U.S. District Court for the Northern District of Illinois.
The parties hereto hereby accept the exclusive jurisdiction of those courts for
the purpose of any such suit, action or proceeding. Venue for any such action,
in addition to any other venue permitted by statute, will be Xxxx County,
Illinois.
4.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
4.9 RECITALS. The Recitals set forth above are hereby incorporated in and
made a part of this Agreement by this reference.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed and delivered as of the day and year first above written.
XXXXXX.XXX, INC.,
a Delaware corporation
By: /s/ XXXXX X. XXXXXX
-------------------------------------
EXECUTIVE:
/s/ XXXX X. XXXXXXXX
-----------------------------------------
Xxxx Xxxxxxxx
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