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EXHIBIT 10.24
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as
of June 29, 1998 by and between XXXXXXXX COFFEE INC., a Delaware corporation
(the "Employer") and Xxxxxx X. Xxxxxxxx ("Employee").
R E C I T A L S:
Employer and Employee desire to enter into this Agreement to establish
the terms and conditions of the Employee's employment by Employer during the
term hereof.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the foregoing recital, and subject
to the conditions and covenants set forth herein, the parties agree as follows:
1. Employment and Term.
(a) Employer hereby employs the Employee as its Chief
Coffee Officer and Employee hereby accepts such employment upon the terms and
subject to the conditions set forth in this Agreement. Unless earlier terminated
as provided in this Agreement, the term of Employee's employment under this
Agreement shall commence on the date hereof and shall continue for a period of
three (3) years from the date hereof (the "Term").
(b) Employee shall perform such duties and functions
consistent with his role as Chief Coffee Officer of Employer as may from time
to time be assigned to him by the Chief Executive Officer or the Board of
Directors of the Employer (the "Board") which duties and functions are intended
to include oversight of all material aspects of the following matters as they
relate to the Employer's business and products sold or otherwise distributed by
Employer: (i) product quality control, (ii) new product development, (iii)
logos, trade names, and imagery, and (iv) selection of additional spokespersons
for Employer. Employee agrees that during the course of the Employer's business
hours throughout the Term, he will devote the whole of his time, attention and
efforts to the performance of his duties and obligations hereunder. Employee
shall not, during the Term, without the written approval of the Board first had
and obtained in each instance, directly or indirectly (A) accept employment or
receive any compensation for the performance of services from any business
enterprise other than Employer or (B) enter into or be concerned or interested
in any trade or business or public or private work (whether for profit or
otherwise and whether as partner, principal, shareholder or otherwise), which
may, in the absolute discretion of the Board, hinder or otherwise interfere with
the performance by the Employee of his duties and obligations hereunder, except
as a holder of not more than five percent (5%) of any class of stock or other
securities in any company which is listed and/or traded on any securities
market.
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2. Compensation. Employee shall be paid a salary (the "Base Salary")
in an amount that initially shall be equal to One Hundred Twenty
Thousand Dollars ($120,000)per year during the first year of this
Agreement. Commencing on the conclusion of the first year of this
Agreement and during the second year of this Agreement,
Employee's base salary will be increased to One Hundred Forty
Thousand ($140,000) per year. Commencing on the conclusion of the
second year of this Agreement, and during the third year of this
Agreement, Employee's base salary will be increased to One
Hundred Sixty Thousand ($160,000) per year. Employee's base
salary will be paid in semi monthly installments less all amounts
required by law to be held or deducted. The Board, in its sole
and absolute discretion from time to time, may increase (but not
decrease without Employee's written consent)Employee's base
salary. The Board, in its sole and absolute discretion also may
pay Employee performance bonuses based on Employer's performance
and Employee's contribution thereto in such amounts and at such
times as the Board may determine.
3. Employee Benefits. During the Term of the Employee's employment
hereunder:
(a) Employee shall be entitled to vacation leave consistent with
the Employer's policies for other senior executives of Employer.
(b) Employer shall pay or reimburse Employee for all reasonable
and necessary travel and other business expenses incurred or paid by Employee in
connection with the performance of his services under this Agreement consistent
with Employer's policies for other senior executives of Employer.
(c) Employer shall provide and pay for the annual cost of
premiums for health, dental and medical insurance coverage for Employee and
Employee's dependents consistent with the coverage generally made available by
Employer to senior executives of Employer and providing benefits at least as
favorable to Employee as the coverage that is in effect at the date of this
Agreement.
(d) In addition to the benefits set forth above, Employee shall
be entitled to participate in any other policies, programs and benefits which
Employer may, in its sole and absolute discretion, make generally available to
its other senior executives from time to time including, but not limited to,
life insurance, disability insurance, pension and retirement plans, stock plans
and other similar programs.
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4. Termination of Employment.
(a) Notwithstanding any other provision of this Agreement,
Employee's employment under this Agreement may be terminated as follows:
(i) Upon the death of Employee, this Agreement and
Employee's employment hereunder shall terminate immediately and without
notice by Employer; or
(ii) In the event of the inability of Employee to perform
his duties or responsibilities hereunder, as a result of mental or
physical ailment or incapacity, for an aggregate of ninety (90) calendar
days during any calendar year (whether or not consecutive) (a
"Disability") during which period of Disability the Employee shall be
entitled to his compensation pursuant to this Agreement, this Agreement
and Employee's employment hereunder shall terminate upon delivery of
written notice to Employee; or
(iii) By Employer for Cause (as defined below) in
accordance with the provisions of Section 4(b) hereof.
(b) The parties agree that for purposes of this Agreement, the
term "Cause" shall mean the following:
(i) Employee's willful or repeated failure to
satisfactorily perform his job duties under this Agreement;
(ii) Failure by the Employee to comply with all material
applicable laws in performing his job duties or in directing the conduct
of Employer's business; and
(iii) Commission by the Employee of any felony,
intentional fraud, gross negligence, or other act against Employer, or
its employees, agents or customers which demonstrates Employee's
untrustworthiness or lack of integrity.
With respect to events described in subparagraphs 4(b)(i) and (ii)
above, Employer shall give written notice to Employee of any such event and
Employee shall have thirty (30) days beginning on the date of delivery of such
written notice to cure same, or if such event cannot be cured within said thirty
(30) day period, Employee shall commence his efforts to cure the event within
the thirty (30) day period and diligently work to cure such event within a
reasonable time period. If Employee within said thirty (30) day period or within
a reasonable time period, as applicable, does not cure the event for which
notice has been provided under subparagraphs 4(b)(i) or (ii) above, then
Employee's employment under this Agreement may be terminated by Employer by
delivery to Employee of written notice of termination and such termination will
be effective as of the date of delivery of such written notice. With respect to
events described in subparagraph 4(b)(iii) above, no thirty (30) day notice
period to Employee is required by Employer.
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5. Relocation; Travel. In connection with the performance of his
employment duties under the terms of this Agreement, Employee shall not be
required to relocate to an office of Employer outside of the Orange County,
California area.
6. Confidential Information and Nonsolicitation.
(a) The Employee acknowledges and agrees that the Company has developed
and uses certain proprietary and confidential information, data, processes,
business methods, computer software, data bases, customer lists and know-how
("Confidential Information"). The Employee agrees that the Confidential
Information is a trade secret of the Company which shall remain the sole
property of the Company notwithstanding that the Employee, as an employee of the
Company, may participate in the development of the Confidential Information.
During the term of this Agreement and at all times thereafter the Employee shall
not disclose any Confidential Information to any person or entity for any reason
or purpose whatsoever, nor shall the Employee make use of any Confidential
Information for the Employee's own benefit or for the benefit of any other
person or entity. Upon termination of this Agreement for any reason, the
Employee will promptly surrender to the Company all Confidential Information in
the Employee's possession or under the Employee's control, whether prepared by
the Employee or by others.
7. Arbitration. Any controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance or breach of
this Agreement or otherwise arising out of the execution hereof, including any
claim based on contract, tort or statute, shall be resolved, at the request of
any party, by submission to binding arbitration at the Orange County, California
offices of Judicial Arbitration & Mediation Services, Inc. ("JAMS"), and any
judgement or award rendered by JAMS shall be final, binding and unappealable,
and judgement may be entered by any state or federal court having jurisdiction
thereof. Any Party can initiate arbitration by sending written notice of
intention to arbitrate (the "Demand") by registered or certified mail to all
parties and to JAMS. The Demand shall contain a description of the dispute, the
amount involved, and the remedy sought. The arbitrator shall be a retired or
former judge agreed to between the parties from the JAMS' panel. If the parties
are unable to agree, JAMS shall provide a list of three available judges and
each party may strike one. The remaining judge shall serve as the arbitrator.
Each party hereto intends that the provisions to arbitrate set forth herein be
valid, enforceable and irrevocable. In his award, the arbitrator shall allocate,
in his discretion, among the parties to the arbitration all costs of the
arbitration, including the fees of the arbitrator and reasonable attorney's
fees, costs and expert witness expenses of the parties. The parties hereto agree
to comply with any award made in any such arbitration proceedings that has
become final and agree to the entry of a judgement in any jurisdiction upon any
award rendered in such proceeding becoming final.
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8. Notices. All notices, requests, demands and other communications
under this Agreement must be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given, or on the date indicated on the return receipt as the date of
receipt or refusal if mailed to the party to whom notice is to be given by first
class mail, registered or certified, postage prepaid, return receipt requested,
and properly addressed as follows:
To the Employer: Xxxxxxxx Coffee, Inc.
0000 Xxxxxxxxx Xx.
Xxxxxx XX 00000
Attention: President
To the Employee: Xxxxxx X. Xxxxxxxx
000 Xxxxxxxx
Xxxxx Xxxx, XX 00000
Any party may change its address for the purpose of this Paragraph 8 by
giving the other party written notice of the new address in the manner set forth
above.
9. Enforceability. If any of the covenants contained in this Agreement,
for any reason and to any extent, are construed to be invalid or unenforceable,
the remainder of this Agreement, and the application of the remaining covenants
to other persons or circumstances shall not be affected thereby, but rather
shall be enforced to the greatest extent permitted by law.
10. Assignment; Binding Effect. This Agreement shall inure to the
benefit of, and be enforceable by, the Employer and its successors and assigns;
however, this Agreement is personal to Employee and may not be assigned by
Employee in whole or in part. In the event of the sale of all or substantially
all of the assets of Employer or other transaction in which Employer will not
continue as a surviving corporate entity engaged in a substantially similar
business as it is engaged in prior to such transaction, Employer will use
commercially reasonable efforts to obtain from the acquiring person or entity,
before the succession takes place, an agreement to assume and perform all of the
terms and conditions of this Agreement.
11. Entire Agreement; Amendment. This Agreement contains the entire
agreement between Employer and Employee with respect to the subject matters
hereof and supersedes all prior or contemporaneous agreements, arrangements or
understandings written or oral, with respect to the subject matters hereof. This
Agreement may no be amended, waived, changed, modified or discharged except by
an instrument in writing executed by or on behalf of the party or parties
against whom any amendment, waiver, change, modification or discharge is sought
to be enforced.
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Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
13. Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"EMPLOYER" XXXXXXXX COFFEE, INC. a Delaware corporation
By: /s/ XXXXXXX X. XXXX
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Name: Xxxxxxx X. Xxxx
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Title: President and Chief Executive Officer
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"EMPLOYEE" /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
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