XXXX EMPLOYMENT AGREEMENT
This Agreement, made and entered on this 18th day of September, 2001 by
and between RED XXXX BREWING COMPANY, a corporation organized and existing under
the laws of the Commonwealth of Pennsylvania (hereinafter referred to as the
"COMPANY") party of the first part, and XXXXX X. XXXX, an adult individual
resident of Pennsylvania with an address of 0000 Xxxxxxxx Xxx., Xxxxxxxxxxxx, XX
(hereinafter referred to as "Employee"), party of the second part.
WHEREAS, Company desires to secure from Employee an employment
agreement and Employee desires to provide Company with such agreement for
consideration.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto, intending to be legally bound, agree as follows:
1. POSITION
A. Position Description: Employee agrees to be employed by
Company as its President. Employee agrees to provide the below
described services to Company:
B. Employee's Efforts and Availability: Employee agrees to be
employed by the Company as its President on a full-time basis
and to devote not less than 90% of his business time,
attention and efforts to carrying out the business of the
Company and promoting and furthering the business of the
Company.
2. TERM
This Agreement shall be effective when signed by the parties hereto and
shall remain effective for a term of five (5) years or unless sooner terminated
by Employee or by Company for good cause as defined in paragraph 5.
3. COMPENSATION
Company shall compensate Employee for his services (as described in
Paragraph 1 above entitled POSITION) as follows:
A. Salary: Company shall pay to Employee $89,500 per anum in
Salary. This amount shall be paid by check or cash to Employee
in equal increments every two weeks. Further, this amount will
be reviewed at the beginning of each calender year by the
Board of Directors of the Company to determine the amount of
any increase or bonus to be added to this figure.
B. Stock: Company shall issue to Employee, on the first business
day of each calendar year, registered options for Company
stock with a strike price of 10 cents. On January 1, 2002,
Employee shall receive 637,500 warrants with a strike
price of 10 cents.
C. The Employee shall also receive 212,500 warrants with a strike
price of 10 cents on the date of this Agreement (or one third
of 637,500) in order to compensate Employee for the period of
September 2001 through December 31, 2001.
D. In order to provide an incentive in the Employee to enhance
the price of the stock, the number of warrants received by
Employee pursuant to this paragraph shall decrease by half
each succeeding year. Thus, on January 1, 2003, Employee shall
receive 318, 750 warrants. On January 1, 2004, Employee shall
receive 159,375 warrants. On January 1, 2005, Employee shall
receive 79, 687 warrants. Finally, on January 1, 2006,
Employee shall receive 39,843 warrants.
E. In the event that the Employee terminates this agreement in
the middle of a Calendar year, the Employee shall only be
entitled to a prorated number of warrants for the portion of
the year actually worked. The Employee shall reimburse Company
the remainder of any options not earned by Employee under a
prorated calculation. If Employee cannot reimburse the
warrants for any reason, he shall, within 30 days of the
Company's demand, repay the cash equivalent of such warrants
based upon the then-prevailing share price, less the 10 cent
strike price.
F. Stock
In addition to the warrants described above, upon the
execution of this Agreement, Employee shall be issued and shall on that date
possess 750,000 additional warrants for Company stock. The first 150,000
warrants shall vest and be exercisable immediately. An additional 150,000
warrants shall vest and be free to exercise one year from the execution of this
Agreement. Anadditional 150,000 warrants shall vest and be free to exercise on
the second anniversary of the execution of this Agreement. An additional 150,000
options shall vest and be free to exercise on the third anniversary of the
execution of this Agreement. The final 150,000 warrants shall vest on the fourth
anniversary of this Agreement. All of the 750,000 warrants will vest as
delineated above even in the event this agreement is terminated. Consequently,
on the fourth anniversary of the date of this Agreement, all 750,000 of
Employee's options shall have vested whether Employee remains employed at the
Company or not. The strike price for the first 300,000 warrants to vest shall be
10 cents. The strike price for the second 300,000 warrants to vest shall be 15
cents. The strike price for the final 150,000 warrants to vest shall be 20
cents.
H. Acceleration
In the event that the ownership or control of the Company
shall change such that a controlling interest in the Company
is acquired by a third party, or in the event an offer is made
to the shareholders of the Company for the purchase of the
Company stock in order for a party to obtain a controlling
interest in the Company or if the Employee is terminated by
the Company, then, the vesting of all of Employee's warrants
shall be accelerated and all of the warrants described in this
paragraph 3 shall vest immediately and be made free to trade
by the Company as soon as possible but not later than 30 days
from the event triggering the provisions of this paragraph.
I. The Company will provide Employee with reimbursement for
health benefits no less favorable than those formerly provided
to him by Company.
4. GUARANTEE OF COMPANY REGARDING SUCCESSOR COMPANY
A. In addition to the corporation's ongoing obligation to
continue to cause the options of the employee to vest even
after the termination of Employee's employment, the
Corporation hereby represents to and covenants with the
Employee that it shall guarantee that the terms of this
Agreement shall survive any transfer of ownership or control
of the Company such that this Agreement shall also apply to
and bind each and every successor entity of the Company.
5. DEFAULT/REMEDIES
A. In the event of any breach of this Agreement, the Employee
shall have full rights to injunctive relief and an equitable
accounting of all diminution of salary, stock or benefits
arising out of such a violation, in addition to any other
existing rights, including the right to attorneys' fees and
costs expended to enforce the terms of this Agreement and
interest thereon, without requirement of posting bond. The
occurrence of any of the following events shall constitute a
breach and shall therefore permit the non-breaching party, at
its option and without prejudice to any other rights or
remedies provided for hereunder, or by law or equity, to
terminate this Agreement:
1. If Employee violates any law, ordinance, rule or
regulation of a governmental agency in connection
with the performance of his employment
responsibilities hereunder (misdemeanors and traffic
violations excepted);
2. Gross breach of any of Employee's obligations of
employment and/or failure to carry out the duties
assigned to him. Mere negligence shall not suffice;
3. Breach of any of Company's obligations hereunder;
4. Arrest or conviction of Employee for Theft;
5. Use by Employee of any prohibited substances;
6. Conviction by Employee of any felony;
7. If either party violates any other term or condition
of this Agreement and fails to cure such violation
within thirty (30) days after written notice from the
non-breaching party requiring the allegedly violating
party to cure same.
6. TERMINATION
This Agreement may be terminated at any time upon one month's notice
by the Employee. It may only be terminated by the Company for good cause. In the
event that the Company terminates the Employee prior to the expiration of this
Agreement, but for good cause, the Employee shall continue to receive Salary for
a period of 180 days and shall be entitled to all of the warrants described in
Paragraph 3, even those which had not yet been received or earned based upon the
prorata calculation in that paragraph. Said warrants will immediately be
registered and made free to trade by the Company on an accelerated basis
pursuant to paragraph 3(H).
If the Company shall terminate the Employee and it is judicially
determined that said termination does not meet the standard of "good cause" then
the Company shall, in addition to every other right and remedy of Employee,
reimburse the Employee all fees, including attorney's fees, and costs incurred
by the Employee in any suit brought by Employee to redress said termination.
7. AGREEMENT NOT TO COMPETE
If the Employee shall terminate his employment, then he shall be
prohibited from competing with the Company within the industry or similar type
in a radius of 75 Miles from the nearest Company property following such
termination for a period of one year.
8. APPLICABLE LAW
The terms and provisions of this contract shall be construed in
accordance with the substantive law of the Commonwealth of Pennsylvania.
9. ASSIGNMENT
Neither this Agreement nor the rights or obligations of a party hereto
may be assigned or alienated in whole or in part without the express written
consent of all parties. This Agreement shall be binding and shall inure to the
benefit of the parties hereto and their successors and assigns.
10. WAIVER
The failure of either party to insist on performance of any provision
of this Agreement shall not be construed as a waiver of that provision in any
later instance.
11. MODIFICATION
This Agreement may not be modified or terminated orally. No claimed
modification, termination or waiver of any of its provisions shall be valid
UNLESS in writing signed by a duly authorized representative of Company.
12. NOTICES
Unless otherwise specifically provided hereunder, any notice, consent
or other communication required or permitted to be given by any provision of
this Agreement shall be in writing and shall be deemed to have been duly and
properly given or served for any purpose only if delivered personally with
receipt acknowledged or sent by registered or certified mail, return receipt
requested, postage and charges prepaid and addressed to the appropriate party,
or via facsimile, with the sending facsimile machine printing a journal
evidencing receipt by the receiving facsimile, as follows:
If to COMPANY:
Red Xxxx Brewing Company
0000 Xxxxxxxxx Xx.
Xxxxxxxxxxxx, XX 00000
If to EMPLOYEE:
Xxxxx X. Xxxx
0000 Xxxxxxxx Xxx.
Xxxxxxxxxxxx, XX
The above-designated address for each party may be changed by written
notification to the other party.
13. CAPTIONS
The captions of the Paragraphs and Subparagraphs of this Agreement are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement or any of the provisions hereof.
14. SEVERABILITY
If any term, condition, clause or provision of this Agreement shall be
determined or declared to be void or invalid in law or otherwise, then only that
term, condition, clause or provision shall be stricken from this Agreement and
in all other respects this Agreement shall be valid and continue in full force,
effect and operation. Likewise, the failure of any party to meet its obligations
under any one or more of the Paragraphs herein, with the exception of the
satisfaction of the conditions precedent, shall in no way avoid or alter the
remaining obligations of the parties.
15. INTEGRATION
This document is intended by the parties as the final written
expression of the terms included herein and is the complete and exclusive
statement of their Agreement on the subjects governed hereby. There are no
representations or warranties other than those expressly set forth herein. These
terms may not be contradicted by evidence of any prior Agreement or of a
contemporaneous oral Agreement and may only be explained or supplemented by a
writing signed by an authorized representative of both parties.
IN WITNESS WHEREOF, each of the parties has executed this Agreement and
caused its respective seal to be affixed the day and year first above written.
EMPLOYEE:
WITNESS:
/s/ Xxxxxxx Xxxxxxx /s/ Xxxxx X. Xxxx
------------------------- ----------------------------------
Name: Name: Xxxxx X. Xxxx
Address:
WITNESS: Red Xxxx Brewing Company
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------- ----------------------------------
Name: Name:
Title: Title:
