6.11 EMPLOYMENT AGREEMENT BY AND BETWEEN AWG, LTD. AND XXXX XXXXXXXX
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), by and between AWG,
Ltd. ("Company") and Xxxx X. Xxxxxxxx ("Employee") is hereby entered into and
to be effective as of the 1st day of January, 1997.
RECITALS
WHEREAS, the Company is engaged primarily in the business of
producing marketing and selling wine and wine-related products;
WHEREAS, Company desires to retain Employee as a principal executive
officer of Company;
NOW, THEREFORE, in consideration of the mutual promises, terms,
covenants and conditions set forth herein and the performance of each, it is
hereby agreed as follows:
A G R E E M E N T S
1. Employment and Duties.
(a) The Company hereby employs Employee as its President and
Chief Executive Officer. As such, Employee shall have responsibilities,
duties and authority commensurate with such position and will report to the
Board of Directors of the Company through its Chairman. Employee hereby
accepts this employment upon the terms and conditions herein contained and
agrees to devote Employee's time, attention and efforts to promote and
further the business of the Company.
(b) Employee shall faithfully adhere to, execute and fulfill
all policies established by the Company.
(c) Employee shall not, during the term of Employee's
employment hereunder, be engaged in any other business activity pursued for
gain, profit or other pecuniary advantage if such activity interferes with
Employee's duties and responsibilities hereunder. However, the foregoing
limitations shall not be construed as prohibiting Employee from making
personal investments in such form or manner as will neither require
Employee's services in the operation or affairs of the companies or
enterprises in which such investments are made nor violate the terms of
Paragraph 3 hereof.
(d) Subject to the By-Laws of the Company, Employee shall be
offered a seat on the Company's Board of Directors. Unless otherwise agreed
by the Board of Directors, the Directors
shall receive no further compensation for participation as a Director.
2. Compensation. For all services rendered by Employee, the Company
shall compensate Employee as follows:
(a) Base Salary. Beginning on the date of the execution hereof,
the base salary payable to Employee shall be Sixty-Five Thousand and 00/100
Dollars ($65,000.00), payable on a regular basis in accordance with the
Company's standard payroll procedures. Except for the first year of this
Agreement during which an initial review of the base salary payable to
Employee will be conducted after six (6) months, Employee's performance will
be reviewed on at least an annual basis and increases to such base salary may
be recommended if, in the discretion of the Compensation Committee of the
Company based upon Company and Employee's performance, any such increase is
warranted.
(b) Incentive Bonus Plan. For 1997 and subsequent years, it is
the Company's intent to develop a written Incentive Bonus Plan setting forth
the criteria under which Employee and other officers and key employees will
be eligible to receive year-end bonus awards.
(c) Perquisites, Benefits and Other Compensation. Employee
shall be entitled to receive additional benefits and compensation in such
form and to such extent as specified below:
(1) In the event that the Company commences a health,
hospitalization, disability, dental or other insurance
plan or plans, Employee will be permitted to
participate in said plan or plans.
(2) Employee will be reimbursed for all business travel and
other out-of-pocket expenses reasonably incurred by
Employee in the performance of Employee's services
pursuant to this Agreement. All reimbursable expenses
shall be appropriately documented in reasonable detail
by Employee upon submission to the Company's Chairman
of any request for reimbursement, and in a format and
manner consistent with the Company's expense reporting
policy.
(3) Employee shall be entitled to take one (1) week of
vacation in the first year of his employment, two (2)
weeks of vacation per year in the second through fifth
years of his employment and three (3) weeks of vacation
per year for each year of his employment thereafter.
(4) Company will issue to Employee a total of One Hundred
Thousand (100,000) shares of Company's restricted
stock, par value $.001 per share ("Company Stock").
Pursuant to the Company's Stock Issuance Policy to be
determined by the Company's Board of Directors, these
shares will become vested and will be issued in lots of
1/3 (33,333 shares) each on the anniversary date of
this Agreement.
3. Non-Competition Agreement.
(a) In consideration of the employment of Employee by the
Company and the
issuance to Employee of the Company Stock, Employee agrees
that he will not, during the period of Employee's employment by or with the
Company, and for a period of six (6) months immediately following the
termination of Employee's employment under this Agreement, for any reason
whatsoever, directly or indirectly, or on behalf of or in conjunction with
any other person, persons, company, partnership, corporation or business of
whatever nature:
(i) engage, as an officer, director, shareholder, owner,
partner, joint venture, or in a managerial capacity,
whether as an employee, independent contractor,
consultant or advisor, or as a sales representative, in
any business selling any products or services in direct
competition with Company or any of Company's
subsidiaries, within thirty (30) miles of Company or
where any of Company's subsidiaries conducts business,
including any territory serviced by Company or any of
such subsidiaries (the "Territory");
(ii) call upon any person who is, at that time, within the
Territory, an employee of Company (including its
subsidiaries) in a managerial capacity for the purpose
or with the intent of enticing such employee away from
or out of the employ of Company (including its
subsidiaries), provided that, after Employee has ceased
employment hereunder, Employee shall be permitted to
call upon and hire any member of Employee's immediate
family;
(iii) call upon any person or entity which is, at that time,
or which has been, within one (1) year prior to that
time, a customer of Company (including its subsidiaries)
within the Territory for the purpose of soliciting or
selling products or services in direct competition with
Company within the Territory.
Notwithstanding the above, the foregoing covenant shall not be
deemed to prohibit Employee from acquiring as an investment not more than one
percent (1%) of the capital stock of a competing business, whose stock is
traded on a national securities exchange or over-the-counter.
(b) Because of the difficulty of measuring economic losses to
Company as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to Company for which it
would have no other adequate remedy, Employee agrees that the foregoing
covenant may be enforced by Company in the event of breach by employee, by
injunctions and restraining orders.
(c) It is agreed by the parties that the foregoing covenants in
this Paragraph 3 impose a reasonable restraint on Employee in light of the
activities and business of Company (including Company's other subsidiaries)
on the date of the execution of this Agreement and the current plans of
Company; but it is also the intent of Company and Employee that such
covenants be construed and enforced in accordance with the changing
activities and business of Company (including its subsidiaries) throughout
the term of this covenant, whether before or after the date of termination of
the employment of Employee. For example, if, during the term of this
Agreement, Company enters a new and different business in addition to that
enumerated under the Recitals above, then Employee will be precluded from
soliciting the customers or employees of such new business and from directly
competing with such new business within thirty (30) miles of its operating
location(s) through the term of this covenant.
(d) The covenants in this Paragraph 3 are severable and
separate, and the unenforceability of any specific covenant shall not affect
the provisions of any other covenant. Moreover, in the event any court of
competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the
parties that such restrictions be enforced to the fullest extent which the
court deems reasonable, and this Agreement shall thereby be reformed.
(e) All of the covenants in this Paragraph 3 shall be construed
as an agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is
specifically agreed that the period of two (2) years stated at the beginning
of this Paragraph 3, during which the agreements and covenants of Employee
made in this Paragraph 3 shall be effective, shall be computed by excluding
from such computation any time during which Employee is in violation of any
provision of this Paragraph 3.
4. Term; Termination; Rights on Termination. The term of this
Agreement shall begin on the date hereof and continue for one (1) year (the
"Initial Term"), and, unless terminated sooner as herein provided, shall
continue thereafter on a year-to-year basis on the same terms and conditions
contained herein. This Agreement and Employee's employment may be terminated
in any one of the following ways;
(a) Death. The death of Employee shall immediately terminate
this Agreement with no severance compensation due to Employee's estate.
(b) Disability. If, as a result of incapacity due to physical
or mental illness or injury, Employee shall have been absent from full-time
duties hereunder for three (3) consecutive months, then thirty (30) days
after receiving written notice (which notice may occur before or after the
end of such three (3) month period, but which shall not be effective earlier
than the last day of such three (3) month period), the Company may terminate
Employee's employment hereunder provided Employee is unable to resume
full-time duties at the conclusion of such notice period. Also, Company may
terminate Employee's employment hereunder if Employee's health should become
impaired to an extent that makes the continued performance of Employee's
duties hereunder hazardous to Employee's physical or mental health or
Employee's life, provided that Employee shall have furnished the Company with
a written statement from a qualified doctor to such effect and provided,
further, that, at the Company's request made within thirty (30) days of the
date of such written statement, Employee shall submit to an examination by a
doctor selected by Company who is reasonably acceptable to Employee or
Employee's doctor and such doctor shall have concurred in the conclusion of
Employee's doctor. In the event this Agreement is terminated as a result of
Employee's disability, Employee shall receive from the Company, in a lump-sum
payment due within ten (10) days of the effective date of termination, the
base salary at the rate then in effect for whatever time period is remaining
under the Initial Term of this Agreement or for six (6) months, whichever
amount is greater.
(c) Good Cause. The Company may terminate this Agreement ten
(10) days after written notice to Employee for good cause, which shall be:
(1) Employee's willful, material and
irreparable breach of this Agreement; (2) Employee's gross negligence in the
performance or intentional nonperformance (continuing for ten (10) days after
receipt of written notice of need to cure) of any of Employee's material
duties and responsibilities hereunder; (3) Employee's willful dishonesty,
fraud or misconduct with respect to the business or affairs of the Company
which materially and adversely affects the operations or reputation of the
Company; (4) Employee's conviction of a felony crime; or (5) chronic alcohol
abuse or illegal drug abuse by Employee. In the event of a termination for
good cause, as enumerated above, Employee shall have no right to any
severance compensation.
(d) Without Cause. At any time after the commencement of
employment, the Company or Employee may, without cause, terminate this
Agreement and Employee's employment, effective thirty (30) days after written
notice is provided to the Company. Should Employee be terminated by the
Company without cause during the Initial Term, Employee shall receive from
the Company, in a lump-sum payment due on the effective date of termination,
the base salary at the rate then in effect for whatever time period is
remaining under the Initial Term of this Agreement or for six (6) months,
whichever amount is greater. If Employee resigns or otherwise terminated
Employee's employment without cause pursuant to this Paragraph 4(d), Employee
shall receive no severance compensation.
(e) Effect of Termination. Upon termination of this Agreement
for any reason provided above, Employee shall be entitled to receive all
compensation earned and all benefits and reimbursements due through the
effective date of termination. Additional compensation subsequent to
termination, if any, will be due and payable to Employee only to the extent
and in the manner expressly provided above. All other rights and obligations
of the Company and Employee under this Agreement shall cease as of the
effective date of termination, except that Employee's obligations under
Paragraphs 3, 5, 6, 7 and 8 herein shall survive such termination in
accordance with their terms.
If termination of Employee's employment arises out of the Company's
failure to pay Employee on a timely basis the amounts to which employee is
entitled under this Agreement or as a result of any other breach of this
Agreement by the Company, as determined by a court of competent jurisdiction
or pursuant to the provisions of Paragraph 13 below, the Company shall pay
all amounts and damages to which Employee may be entitled as a result of such
breach, including interest thereon and all reasonable legal fees and expenses
and other costs incurred by Employee to enforce Employee's rights hereunder.
Further, none of the provisions of Paragraph 3 shall apply in the event this
Agreement is terminated as a result of a breach by the Company.
5. Return of Company Property. All records, designs, patents,
business plans, financial statements, manuals, memoranda, lists and other
property delivered to or compiled by Employee by or on behalf of the Company
or the representatives, vendors or customers thereof which pertain to the
business of Company shall be and remain the property of Company and be
subject at all times to the discretion and control thereof. Likewise, all
correspondence, reports, records, charts, advertising materials and other
similar data pertaining to the business, activities or future plans of
Company which is collected by Employee shall be delivered promptly to Company
without request by it upon termination of Employee's employment.
6. Inventions. Employee shall disclose promptly to Company any and
all significant
conceptions and ideas for inventions, improvements and valuable discoveries,
whether patentable or not, which are conceived or made by Employee, solely or
jointly with another, during the period of employment or within one (1) year
thereafter, and which are directly related to the business or activities of
Company and which Employee conceives as a result of Employee's employment by
Company. Employee hereby assigns and agrees to assign all Employee's
interests therein to Company or its nominee. Whenever requested to do so by
Company, Employee shall execute any and all applications, assignments or
other instruments that Company shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect Company's interest therein.
7. Trade Secrets. Employee agrees that Employee will not, during or
after the term of this Agreement with the Company, disclose the specific
terms of Company relationships or agreements with its significant vendors or
customer or any other significant and material trade secret of Company,
whether in existence or proposed, to any person, firm, partnership,
corporation or business for any reason or purpose whatsoever.
8. No Prior Agreements. Employee hereby represents and warrants o
the Company that the execution of this Agreement by Employee and Employee's
employment by the Company and the performance of Employee's duties hereunder
will not violate or constitute a breach of any agreement with a former
employer, client or any other person or entity. Further, Employee agrees to
indemnify the Company for any claim, including, but not limited to,
attorneys' fees and expenses of investigation, by any such third party that
such third party may now have or may hereafter come to have against the
Company based upon or arising out of any non-competition agreement, invention
or secrecy agreement between Employee and such third party which was in
existence as of the date of this Agreement.
9. Assignment; Binding Effect. Employee understands that Employee
has been selected for employment by the Company on the basis of Employee's
personal qualifications, experience and skills. Employee agrees, therefore,
Employee cannot assign all or any portion of Employee's performance under
this Agreement. Subject to the preceding two (2) sentences, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the
parties hereto and their respective heirs, legal representatives, successors
and assigns.
10. Complete Agreement. Except as expressly provided herein, this
Agreement is not a promise of future employment. Employee has no oral
representations, understandings or agreements with the Company or any of
their officers, directors or representatives covering the same subject matter
as is covered by this Agreement. This Agreement is the final, complete and
exclusive statement and expression of the agreement between the Company and
Employee and of all the terms of such agreement, and it cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral
or written agreements. This Agreement may not be later modified except by a
further writing signed by a duly authorized officer of the Company and
Employee, and no term of this Agreement may be waived except by writing
signed by the party waiving the benefit of such term.
11. Notice. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:
To the Company: AWG, Ltd.
C/o Xxx Xxxxxxxx
Chairman
0000 Xxxx Xxxxx Xxxx
Xxxx, Xxxxxxxx 00000
(000) 000-0000
(000) 000-0000 (facsimile)
To the Employee: Xxxx X. Xxxxxxxx
00 Xxxxxxxxxx Xxxxx
Xxxx, Xxxxxxxxxx 00000
(000) 000-0000
(000) 000-0000 (facsimile)
Notice shall be deemed given and effective three (3) days after the deposit
in the United States mail of a writing addressed as above and sent first
class mail, certified, return receipt requested, or when actually received.
Either party may change the address for notice by notifying the other party
of such change in accordance with this Paragraph 11.
12. Severability; Headings. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall
be given to the intent manifested by the portion held invalid or inoperative.
The paragraph headings herein are for reference purposes only and are not
intended in any way to describe, interpret, define or limit the extent or
intent of the Agreement or of any party hereof.
13. Arbitration. Any unresolved dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by
arbitration, conducted before a panel of three (3) arbitrators in Napa,
California, in accordance with the rules of the American Arbitration
Association then in effect. The arbitrators shall not have the authority to
add to, detract from, or modify any provision hereof nor to award punitive
damages to any injured party. The arbitrators shall have the authority to
order back-pay, severance compensation, vesting of options (or cash
compensation in lieu of vesting of options), reimbursement of costs,
including those incurred to enforce this Agreement, and interest thereon in
the event the arbitrators determine that Employee was terminated without
disability or good cause, as defined in Paragraphs 4(b) and 4(C),
respectively, or that Company has otherwise materially breached this
Agreement. A decision by a majority of the arbitration panel shall be final
and binding. Judgment may be entered on the arbitrators' award in any court
having jurisdiction. The direct expense of any arbitration proceeding shall
be borne by Company.
14. Relocation. Employee shall not be required by the Company to
relocate his principal residence from the Napa, California area.
15. Governing Law. This Agreement shall in all respects be construed
according to the laws of the State of California.
AWG, LTD. EMPLOYEE:
By: _____________________________ ____________________________________
Xxx Xxxxxxxx Xxxx X. Xxxxxxxx
ITS: Chairman
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