1
Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into on _________________ 1996
("Employment Agreement"), by and among BEVERAGE WORKS, INC., a California
corporation ("Employer"), and JOHN STONER ("Employee"). This Agreement shall
be effective as of the close of the Employer's initial public offering.
WHEREAS, Employer wishes to employ Employee as Vice President of New
Breweries, with such other duties and responsibilities as Employer may
reasonably assign to Employee consistent with the nature and character of such
employment (the "Position"), and Employee wishes to accept such employment
subject to the terms and conditions of this Employment Agreement; and
WHEREAS, Employer is in the business of producing beer and other
beverages, and performs services related thereto, and markets such products and
services in the United States and in various foreign countries and has
accumulated valuable and confidential information including trade secrets and
know-how relating to technology, manufacturing procedures, formulas, machines,
marketing plans, sources of supply, business strategies, and other business
records; and
WHEREAS, the giving of the covenants contained herein is a condition
precedent to the employment of Employee in the Position and Employee
acknowledges that the execution of this Employment Agreement and the entering
into of these covenants is an express condition of his employment in the
Position and that said covenants are given in consideration for such employment
and the other benefits conferred upon him by this Employment Agreement.
NOW, THEREFORE, in consideration of such employment and other valuable
consideration, receipt of which is hereby acknowledged Employer and Employee
agree as follows:
1. DUTIES OF EMPLOYEE. Employer hereby employs Employee as its
Vice President of New Breweries and agrees to cause Employee from time to time
to be elected or appointed to such corporate offices or positions. Employee
shall serve in such capacity at Employer's office, or at such other place as
Employer may direct. Employee's principal duties and responsibilities shall
consist of establishing and implementing a policy of brewery and production
integration, and establishing and implementing a policy for new brewery
acquisition and construction, and such other duties and responsibilities which
the Chief Executive Officer, or such other person as designated by the Chief
Executive Officer, from time to time may assign to Employee. Employee shall
perform such other services and duties as may from time to time be assigned to
Employee by Employer's Chief Executive Officer, or such other person as
designated by the Chief Executive Officer, provided that such other services
and duties are not inconsistent with any other term of this Employment
Agreement. Except during vacation periods or in accordance with Employer's
personnel policies covering executive leaves and reasonable periods of illness
or other incapacitation, Employee shall devote full-time his services to
Employer's business and interests in a manner consistent with Employee's title
and office and
2
Employer's needs for his services. Employee shall perform his duties with
fidelity, to the best of Employee's ability, and in the best interests of
Employer.
2. TERM OF EMPLOYMENT. Employer hereby employs Employee, and
Employee hereby accepts employment with Employer, for three years, commencing
on the effective date ("Employment Period"). Notwithstanding anything in this
Section 2 to the contrary, this Employment Agreement may be terminated at any
time in accordance with Section 6.
3. COMPENSATION OF EMPLOYEE.
3.1 Base Compensation. As compensation for Employee's
services hereunder, Employee shall receive a base salary (the "Base Salary") at
an annual amount of not less than Seventy Five Thousand Dollars ($75,000)
payable in bi-monthly installments of Three Thousand One Hundred Twenty-Five
Dollars ($3,125) each, or a ratable portion thereof for periods of less than
one-half month. The Board or the Compensation Committee of the Board shall
review the Base Salary at least annually as of the payroll date nearest the
anniversary of this Employment Agreement; and Employer agrees to make such
increases in the Base Salary as the Board may approve from time to time. Once
established at a specific increased annual rate, the Base Salary may not be
reduced by Employer without Employee's written consent.
3.2 Car Allowance. In addition, Employee shall be
entitled to a monthly car allowance of Five Hundred Dollars ($500), which shall
be paid to Employee concurrently with the second (2nd) installment of
Employee's monthly base compensation.
4. EXPENSE REIMBURSEMENTS. Employee shall promptly be reimbursed
for reasonable and actual out-of-pocket expenses incurred by Employee in
performance of Employee's duties and responsibilities hereunder in accordance
with Employer's established personnel policy covering executive officer expense
reimbursements, as such policy may be amended, revised or otherwise changed
from time to time. Employee shall furnish proper vouchers and expense reports
and shall be reimbursed only for those expenses which shall be reimbursable.
5. VACATION, SICK LEAVE AND OTHER FRINGE BENEFITS. Employee
shall be entitled to three (3) weeks vacation per every twelve (12) month
period of employment hereunder and no more than two (2) weeks vacation at a
time. Employee shall also be entitled to leaves for illness or other
incapacitation as is consistent with Employee's title and Employer's needs for
Employee's services, except as otherwise provided for in Section 6.2. Employee
shall be entitled during Employee's employment hereunder to share or
participate in such medical insurance programs or other "fringe" benefit plans
or programs as shall be made available to employees employed by Employer
generally, in accordance with Employer's established personnel policies, if
any, or as established, amended, revised or otherwise changed from time to
time, covering employee benefits.
2 of 9
3
6. TERMINATION.
6.1 Termination by Employer for Cause. Employer may
terminate this Employment Agreement and Employee's employment hereunder for
Cause (as defined herein) any time effective upon written notice to Employee.
As used herein, the term "Cause" shall mean:
6.1.1 Habitual neglect in the performance of
Employee's material duties as set forth in Section 1 which continues
uncorrected for a period of thirty (30) days after written notice thereof by
Employer to Employee;
6.1.2 Employee's confession or conviction of theft,
fraud, embezzlement, or any other crime involving dishonesty with respect to
Employer or any parent, subsidiary or affiliate of Employer;
6.1.3 Gross negligence involving misfeasance or
nonfeasance by Employee in the performance of Employee's material duties as set
forth in Section 1 which continues uncorrected for a period of thirty (30) days
after written notice thereof by Employer to Employee;
6.1.4 Material violation by Employee of the
provisions of Section 8; or
6.1.5 The representations in Section 7 were
materially false as of the date of this Employment Agreement.
In no event shall the results of Employer's operations or any business
agreement made in good faith by Employee constitute an independent basis for
termination for cause of Employee's employment under this Employment Agreement.
Any termination of Employee's employment for cause must be authorized by a
majority vote of the Board taken not later than twelve (12) months after a
majority of the members of the Board (other than Employee) have actual
knowledge of the occurrence of the event or conduct constituting the cause for
such termination. If Employee's employment under this Employment Agreement is
terminated by Employer for cause, then Employee shall be entitled to receive
his Base Salary through the effective date of such termination.
6.2 Termination Upon Death or Disability. This
Employment Agreement and Employee's employment hereunder shall terminate upon
Employee's death or Disability (as defined herein). For this purpose
"Disability" means incapacity, whether by reason of physical or mental illness
or disability, which prevents Employee from substantially performing Employee's
material duties as set forth in Section 1 for six (6) months, or for shorter
periods aggregating six (6) months in any twelve (12) successive calendar
months. Upon termination for death, and unless Employer shall have in force a
disability insurance policy providing for benefits in an amount at least equal
thereto, upon termination for Disability, Employer shall continue to pay the
compensation payments pursuant to Section 3 to the surviving spouse of Employee
(or if there is none to Employee's estate) in the case of death and to Employee
or
3 of 9
4
Employee's court appointed conservator in the case of Disability until the date
three (3) months thereafter. Termination for death shall become effective upon
the occurrence of such event and termination for Disability shall become
effective upon written notice to Employee.
6.3 Events Upon Termination. The termination of this
Employment Agreement pursuant to Section 6.1 and 6.2 shall also result in the
termination of all rights and benefits of Employee under this Employment
Agreement except for any rights to compensation accrued under Section 3 prior
to the date of termination or rights to expense reimbursement under Section 4.
6.4 Payments As Liquidated Damages. In the event
Employer elects to terminate this Employment Agreement prior to the scheduled
termination date for any reason other than Cause, Employer shall continue to
make the compensation payments specified in Section 3 hereof for the entire
term, through and including the scheduled termination date, and such payments
shall be deemed to be liquidated damages for the damage done to Employee's
reputation and for having foregone the opportunity to pursue other employment
opportunities while performing services pursuant to this Employment Agreement.
Employer hereby agrees that such amount shall constitute a realistic and
reasonable valuation of the damages with respect to Employee's claims, and
Employee shall not be required to mitigate his damages by seeking other
business, as the damages resulting to him as a result of the loss of the unique
business arrangement set forth herein could not be mitigated by seeking
business elsewhere, nor shall any monies earned by Employee in any capacity
after such termination, attempted termination or breach act to reduce such
damages.
7. EMPLOYEE'S REPRESENTATIONS. Employee represents and warrants
that Employee is free to enter into this Employment Agreement and to perform
each of the provisions contained herein. Employee represents and warrants that
Employee is not restricted or prohibited, contractually or otherwise, from
entering into and performing this Employment Agreement, and that Employee's
execution and performance of this Employment Agreement is not a violation or
breach of any agreement between Employee and any other person or entity.
8. NONDISCLOSURE OF CONFIDENTIAL INFORMATION;
OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS;
NON COMPETITION; COVENANT NOT TO COMPETE.
8.1 Nondisclosure of Confidential Information. During the
term of this Employment Agreement and at all times thereafter, Employee will
keep confidential and will not directly or indirectly divulge to anyone nor use
or otherwise appropriate for Employee's own benefit, or on behalf of any other
person, firm, partnership or corporation by whom Employee might subsequently be
employed or otherwise associated or affiliated with, any Confidential
Information (as defined herein). For this purpose, "Confidential Information"
means any and all customer lists, product formulations, arrangements with
distributors and parties for whom Employer does contract brewing, marketing
information or strategies, trade secrets or other confidential information of
any kind, nature or description concerning any matters affecting or
4 of 9
5
relating to the business of Employer or any affiliate which derives economic
value, actual or potential, from not being generally known to the public or to
other persons who can obtain economic value from its disclosure or use and
which is subject to efforts by Employer that are reasonable under the
circumstances to maintain its secrecy.
8.2 Employer Intellectual Property Rights. All
intellectual property rights, whether or not patentable or copyrightable, which
(i) are made or developed with the equipment, supplies, facilities, product
formulations, trade secrets, time or other assets of Employer; (ii) relate to
the business, including anticipated research or development, of Employer, or
(iii) result from work performed by Employee for Employer, are and shall remain
the sole property of Employer, and upon request made by Employer, Employee
shall assign any and all rights, including patents and patent rights, trade
mark and trade dress rights, Employee may have therein to Employer. This
Section 8.2 does not apply to any intellectual property rights which are
specifically enumerated in Schedule 8.2 or are the subject of Section 2870 of
the California Labor Code.
8.3 Employer Materials. All reports and analysis,
designs, drawings, contracts, contractual arrangements, specifications,
computer software, computer hardware and other equipment, computer printouts,
computer disks, documents, memoranda, notebooks, correspondence, files, lists
and other records, and the like, and all photocopies or other reproductions
thereof, affecting or relating to the business of Employer which Employee shall
prepare, use, construct, observe, possess or control ("Employee Materials"),
shall be and remain the sole property of Employer. Upon termination of this
Employment Agreement, Employee shall deliver promptly to Employer all such
Employer Materials.
8.4 Certain Restrictions on Business Activities. During
the term of this Employment Agreement, Employee agrees that:
8.4.1 Business Activities. He will not, directly
or indirectly, own an interest in, operate, join, control or participate in, or
be connected as an officer, employee, agent, independent contractor, partner,
shareholder or principal of any corporation, partnership, proprietorship, firm,
association, person or other entity providing services and/or products or a
combination thereof which directly or indirectly compete with Employer's
business, and he will not undertake planning for or organization of any
business activity competitive with Employer's business or combine or conspire
with other employees or representatives of Employer's business for the purpose
of organizing any such competitive business activity, except the purchase of
less than ten percent (10%) of the stock of a publicly traded company which is
not affiliated with Employer.
8.4.2 Solicitation of Customers, Etc. He will not,
directly or indirectly, either for himself or for any other person, firm or
corporation, divert or take away or attempt to divert or take away (and after
the term of this Employment Agreement, call on or solicit or attempt to call on
or solicit) any of Employer's customers or distributors, including but not
limited to, those upon whom Employee called or whom Employee solicited or
serviced or with
5 of 9
6
whom Employee became acquainted while engaged as an employee in Employer's
business.
8.4.3 Solicitation of Employees, Etc. He will not,
directly or indirectly or by action in concert with others, induce or influence
(or seek to induce or influence) any person who is engaged (as an employee,
agent, independent contractor or otherwise) by Employer to terminate his or her
employment or engagement.
8.5 Covenant Not to Compete.
8.5.1 Obligations of Employee. Employee
acknowledges that, as a key management employee, Employee will be involved, on
a high level, in the development, implementation and management of the business
strategies and plans of Employer, which shall also consist of such other
business, units, divisions, subsidiaries or other entities of Employer as
Employer shall determine in its sole discretion from time to time (the
"Business"). By virtue of Employee's unique and sensitive position and special
background, employment of Employee by a competitor of Employer represents a
serious competitive danger to Employer and the Business, and the use of
Employee's talent and knowledge and information about Employer or the Business
can and would constitute a valuable competitive advantage over Employer and the
Business. In view of the foregoing, Employee covenants and agrees that, if
Employee's employment with Employer is terminated by Employee or for cause at
any time, for a period of one year after the date of such termination, but not
longer than the term of this Employment Agreement under Section 2 had
employment not been terminated, Employee will not engage or be engaged, in any
capacity, directly or indirectly, including but not limited as employee, agent,
consultant, manager, executive, owner or stockholder (except as a passive
investor holding less than a 1% equity interest in any enterprise the
securities of which are publicly traded) in any business entity doing business
in the United States engaged in competition with any business conducted by
Employer on the date of termination. This Covenant Not to Compete shall
survive the termination or expiration of the other provisions of this
Employment Agreement. If any court determines that this Covenant Not to
Compete, or any part thereof, is unenforceable because of the duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its
reduced form, such provision shall then be enforceable.
8.5.2 Continuing Obligations. Employee agrees
that, for one year following his termination of employment with Employer,
Employee shall keep Employer informed of the identification of Employee's
employer and the nature of such employment or of Employee's self-employment.
Employer agrees that, within fifteen (15) days after receiving notice pursuant
to this section of the identification of the prospective employer, the nature
of the employment or self-employment or any change therein, Employer will
advise Employee as to whether such employment constitutes a violation of
Section 8.5.1 hereof.
8.5.3 Injunctive Relief. Employee acknowledges
that the violation of the covenants contained in this Section 8.5 would be
detrimental and cause irreparable injury to Employer and its affiliates which
could not be compensated by money damages. Employee
6 of 9
7
agrees that an injunction from a court of competent jurisdiction is the
appropriate remedy for these provisions, and consents to the entry of an
appropriate judgment enjoining Employee from violating these provisions in the
event there is a find of their breach.
8.6 Severability. Employee agrees, in the event that any
provision of this Section 8 or any word, phrase, clause, sentence or other
portion thereof shall be held to be unenforceable or invalid for any reason,
such provision or portion thereof shall be modified or deleted in such a manner
so as to make this Section 8 as modified legal and enforceable to the fullest
extent permitted under applicable laws. The validity and enforceability of the
remaining provisions or portions thereof shall not be affected thereby and
shall remain valid and enforceable to the fullest extent permitted under
applicable laws. A waiver of any breach of the provisions of this Section 8
shall not be construed as a waiver of any subsequent breach of the same or any
other provision.
9. MERGER, ETC., OF EMPLOYER. In the event of a future
disposition of (or including) the properties and business of Employer,
substantially or in its entirety, by merger, consolidation, sale of assets, or
otherwise, then Employer may assign this Employment Agreement and all of the
rights and obligations of Employer under this Employment Agreement to the
acquiring or surviving corporation; provided, that such acquiring or surviving
corporation shall assume in writing all of the obligations of the companies
under this Employment Agreement; and provided further, that the companies (in
the event and so long as they or either of them remains in business as an
independent going enterprise) shall remain jointly and severally liable for the
performance of their obligations under this Employment Agreement in the event
of an unjustified failure of the acquiring corporation to perform its
obligations under this Employment Agreement.
10. GENERAL PROVISIONS.
10.1 Severable Provisions. The provisions of this
Employment Agreement are severable, and if any one or more provisions may be
determined to be judicially unenforceable, in whole or in part, the remaining
provisions shall nevertheless be binding and enforceable.
10.2 Assignment. Neither this Employment Agreement nor
any of the rights or obligations of Employee or Employer hereunder shall be
assignable.
10.3 Arbitration. Any dispute arising under or in
connection with this Employment Agreement shall be subject to arbitration
before the American Arbitration Association ("AAA") at the facility nearest
Employer's principal place of business.
10.4 Attorneys' Fees. If any legal action arises under
this Employment Agreement or by reason of any asserted breach of it, the
prevailing party shall be entitled to recover all costs and expenses, including
reasonable attorneys' fees, incurred in enforcing or attempting to enforce any
of the terms, covenants or conditions, including costs incurred prior to
commencement of legal action, and all costs and expenses, including reasonable
attorneys'
7 of 9
8
fees, incurred in any appeal from an action brought to enforce any of the
terms, covenants or conditions.
10.5 Notices. Any notice to be given to Employer under
the terms of this Employment Agreement shall be addressed to Employer at the
address of Employer's principal place of business, with a copy to Hecht &
Steckman, P.C., 60 East 42nd Street, Suite 5101, New York, New York 10165-5101,
Attn: James G. Smith, Esq., and any notice to be given to Employee shall be
addressed to Employee at his home address last shown on the records of
Employer, or at such other address as either party may hereafter designate in
writing to the other. Any notice required or permitted under this Employment
Agreement shall be in writing and shall be deemed effective: (i) upon receipt
in the event of delivery by hand, including delivery made by private delivery
or overnight mail service where either the recipient or delivery agent executes
a written receipt or confirmation of delivery; or (ii) 48 hours after deposited
in the United States mail, registered or certified mail, return receipt
requested, postage prepaid.
10.6 Waiver. Either party's failure to enforce any
provision or provisions of this Employment Agreement shall not in any way be
construed as a waiver of any such provision or provisions, or prevent that
party thereafter from enforcing each and every other provision of this
Employment Agreement.
10.7 Entire Agreement; Amendments. This Employment
Agreement supersedes any and all other agreements, either oral or in writing,
between the parties hereto with respect to the employment of Employee by
Employer and contains all of the covenants and agreements between the parties
with respect to the employment of Employee by Employer. Each party to this
Employment Agreement acknowledges that no representations, inducements,
promises or agreements, orally or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not embodied herein, and that
no other agreement, statement or promise not contained in this Employment
Agreement will be effective only if it is in writing signed by the party to be
charged.
10.8 Titles and Headings. Titles and headings to sections
of this Employment Agreement are for the purpose of reference only and shall in
no way limit, define or otherwise affect the interpretation or construction of
such provisions.
10.9 Counterparts. This document may be executed in one
or more counterparts each of which shall be deemed to be an original and all of
which together shall constitute a single agreement.
10.10 Governing Law. This Employment Agreement shall be
governed by and construed in accordance with the laws of the State of
California.
8 of 9
9
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the day and year first above written.
EMPLOYEE:
___________________________________
JOHN STONER
EMPLOYER:
BEVERAGE WORKS, INC.
a California corporation
___________________________________
By:________________________________
Title:_____________________________
9 of 9