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EXHIBIT 10.6
EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT dated as of March 23, 2005, by and between Vintage
Wine Trust Inc., with its principal place
of business at 1101 Fifth Avenue,
Suite 310 San Rafael, California 94901 (the
"Company") and Richard N. Shell,
residing at the address set forth on the
signature page hereof (the
"Executive").
WHEREAS, the
Company wishes to employ the Executive, and the Executive
wishes to accept such offer, on the terms
set forth below:
Accordingly, the
parties hereto agree as follows:
1. Term. The
Company hereby employs the Executive, and the Executive hereby
accepts such employment, for an initial
term commencing as of the date hereof
and continuing for a three-year period
following such date, unless sooner
terminated in accordance with the
provisions of Section 4 or Section 5; with
such employment to continue for successive
one-year periods in accordance with
the terms of this Agreement (subject to
termination as aforesaid) unless either
party notifies the other party of
non-renewal in writing prior to three months
before the expiration of the initial term
and each annual renewal, as applicable
(the period during which the Executive is
employed hereunder being hereinafter
referred to as the "Term").
2. Duties.
During the Term, the Executive shall be employed by the Company
as Chief Operating Officer of the Company,
and, as such, the Executive shall
faithfully perform for the Company the
duties of said offices and shall perform
such other duties of an executive,
managerial or administrative nature as shall
be specified and designated from time to
time by the board of directors of the
Company (the "Board") or the Chief
Executive Officer of the Company. The
Executive shall devote substantially all of
his business time and effort to the
performance of his duties hereunder.
3.
Compensation.
3.1 Salary. The
Company shall pay the Executive during the Term a salary at
a minimum rate of $270,000 per annum (the
"Annual Salary"), in accordance with
the customary payroll practices of the
Company applicable to senior executives.
The Board periodically shall review the
Executive's Annual
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Salary and may provide for such increases
therein as it may in its discretion
deem appropriate. (Any such increased
salary shall constitute the "Annual
Salary" as of the time of the
increase.)
3.2 Bonus.
During the Term, in addition to the Annual Salary, for each
fiscal year of the Company ending during
the Term, the Executive shall have the
opportunity to receive an annual bonus in
an amount and on such terms to be
determined by the Company, but which Bonus
shall not be less than 40% and shall
not be more than 80% of the Annual Salary.
The forgoing shall not limit the
Executive's eligibility to receive any
other bonus under any other bonus plan,
stock option or equity-based plan, or other
policy or program of the Company.
3.3 Benefits-In
General. The Executive shall be permitted during the Term
to participate in any group life,
hospitalization or disability insurance plans,
health programs, retirement plans, fringe
benefit programs and other benefits
that may be available to other senior
executives of the Company generally, in
each case to the extent that the Executive
is eligible under the terms of such
plans or programs.
3.4 Vacation.
The Executive shall be entitled to vacation of no less than
20 business days per year, to be credited
in accordance with ordinary Company
policies.
3.5 Expenses-In
General. The Company shall pay or reimburse the Executive
for all ordinary and reasonable
out-of-pocket expenses actually incurred (and,
in the case of reimbursement, paid) by the
Executive during the Term in the
performance of the Executive's services
under this Agreement, in accordance with
the Company's policies regarding such
reimbursements.
3.6 Automobile.
The Company shall provide the Executive with an automobile
allowance of $1200 per month.
4. Termination
upon Death or Disability. If the Executive dies during the
Term, the Term shall terminate as of the
date of death, and the obligations of
the Company to or with respect to the
Executive shall terminate in their
entirety upon such date except as otherwise
provided under this Section 4. If
the Executive is unable to perform
substantially and continuously the duties
assigned to him due to a disability as
defined for purposes of the Company's
long-term disability plan then in effect,
or, if no such plan is in effect, by
virtue of ill health or other disability
for more than 180 consecutive or
non-
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consecutive days out of any consecutive
12-month period, the Company shall have
the right, to the extent permitted by law,
to terminate the employment of the
Executive upon notice in writing to the
Executive. Upon termination of
employment due to death or disability, (i)
the Executive (or the Executive's
estate or beneficiaries in the case of the
death of the Executive) shall be
entitled to receive any Annual Salary and
other benefits earned and accrued
under this Agreement prior to the date of
termination (and reimbursement under
this Agreement for expenses incurred prior
to the date of termination); (ii)
without duplication of any amounts due
under clause (i), the Executive (or the
Executive's estate or beneficiaries in the
case of the death of the Executive)
shall receive an amount equal to the annual
bonus that, in the absence of such
termination, would have been payable for
the fiscal year in which termination
occurs, payable at such time as would have
applied in the absence of such
termination, with such amount to be
multiplied by a fraction (x) the numerator
of which is the number of days in the
fiscal year preceding the termination and
(y) the denominator of which is 365; (iii)
all outstanding unvested equity-based
awards (including, without limitation,
stock options and restricted stock) held
by the Executive shall fully vest and
become immediately exercisable, as
applicable, and subject to the terms of
such awards; and (iv) the Executive (or
the Executive's estate or beneficiaries in
the case of the death of the
Executive) shall have no further rights to
any other compensation or benefits
hereunder, or any other rights hereunder
(but, for the avoidance of doubt, shall
receive such disability and death benefits
as may be provided under the
Company's plans and arrangements in
accordance with their terms).
5. Certain
Terminations of Employment; Certain Benefits.
5.1 Termination
by the Company for Cause; Termination by the Executive
without Good Reason.
(a) For purposes of this Agreement, "Cause" shall mean the
Executive's:
(i) commission of, and
indictment for or formal admission to a
felony, or any crime of moral turpitude, dishonesty, breach
of trust or unethical business conduct, or any crime
involving the Company;
(ii) continued engagement in the performance of his duties
hereunder in willful misconduct, willful or gross neglect,
fraud, misappropriation or embezzlement, and then only after
appropriate notice of Executive's misconduct or neglect and
an appropriate period, as determined by the Board, to remedy
such misconduct or neglect;
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(iii) continued failure to materially adhere to the clear
directions of the Board or the Chief Executive Officer, to
adhere to the Company's policies and practices or to devote
substantially all of his business time and efforts to the
Company and its subsidiaries;
(iv) continued failure to substantially perform his duties
properly assigned to the Executive by the Board of Directors
or the Chief Executive Officer of the Company in writing
(other than any such failure resulting from his Disability);
(v) material breach of
any of the provisions of Section 6; or
(vi) material and willful breach of the terms and provisions of
this Agreement and failure to cure such breach within 15
days following written notice from the Company specifying
such breach;
provided that the Company shall not be
permitted to terminate the Executive for
Cause except on written notice given to the
Executive at any time not more than
30 days following the occurrence of any of
the events described in clause (ii)
through (vi) above (or, if later, the
Company's knowledge thereof). No
termination for Cause under clause (i)
through (vi) shall be effective unless
the Board makes a determination that Cause
exists after notice to the Executive,
and the Executive has been provided with an
opportunity (with counsel of his
choice) to contest the determination at a
meeting of the Board.
(b) The Company may terminate this Agreement and the
Executive's
employment hereunder for Cause, and the
Executive may terminate his employment
on at least 30 days' written notice given
to the Company. If the Company
terminates the Executive for Cause, or the
Executive terminates his employment
and the termination by the Executive is not
for Good Reason in accordance with
Section 5.2, (i) the Executive shall
receive Annual Salary and other benefits
(including any bonus for a fiscal year
completed before termination and awarded
but not yet paid, or in the event of a
partial fiscal year, a pro rata bonus
earned through the date of such
termination, which is to be calculated based on
the bonus earned in the prior fiscal year)
earned and accrued under this
Agreement prior to the termination of
employment (and reimbursement under this
Agreement for expenses incurred prior to
the termination of employment); and
(ii) the Executive shall have no further
rights to any other compensation or
benefits under this Agreement on or after
the termination of employment.
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5.2 Termination
by the Company without Cause; Termination by the Executive
for Good Reason.
(a) For purposes of this Agreement, "Good Reason" shall mean,
unless
otherwise consented to by the
Executive,
(i) the material
reduction of the Executive's title, authority,
duties and responsibilities or the assignment to the
Executive of duties materially inconsistent with the
Executive's position or positions with the Company;
(ii) a reduction in Annual Salary of the Executive;
(iii) the relocation
of the Executive's office to more than 50
miles from San Rafael, California; or
(iv) the Company's material and willful breach of this
Agreement.
Notwithstanding the foregoing, (i) Good
Reason shall not be deemed to exist
unless notice of termination on account
thereof (specifying a termination date
no later than 30 days from the date of such
notice) is given no later than 30
days after the time at which the event or
condition purportedly giving rise to
Good Reason first occurs or arises and (ii)
if there exists (without regard to
this clause (ii)) an event or condition
that constitutes Good Reason, the
Company shall have 15 days from the date
notice of such a termination is given
to cure such event or condition and, if the
Company does so, such event or
condition shall not constitute Good Reason
hereunder. In the event of any notice
of non-renewal of this Agreement by the
Company, as described in Section 1, then
(i) the Executive shall receive Annual
Salary and other benefits (including any
bonus for a fiscal year completed before
termination) earned and accrued under
this Agreement prior to the non-renewal of
this Agreement (and reimbursement
under this Agreement for expenses incurred
prior to the termination of
employment), (ii) the Executive shall
receive a single-sum cash payment equal to
the sum of (x) the Executive's Annual
Salary as in effect immediately before
such non-renewal, and (y) the Executive's
bonus payable in accordance with the
last sentence of Section 3.2 for the fiscal
year in which such non-renewal
occurs, payable upon the expiration of the
Term, and (iii) all outstanding
unvested equity-based awards (including
without limitation stock options and
restricted stock) held by the Executive
shall fully vest and shall become
immediately exercisable, as applicable.
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(b) The Company may terminate the Executive's employment and
the
Executive may terminate the Executive's
employment with the Company at any time
for any reason or no reason. If the Company
terminates the Executive's
employment and the termination is not
covered by Section 4 or 5.1, or the
Executive terminates his employment for
Good Reason:
(i) the Executive
shall receive Annual Salary and other benefits
(including any bonus for a fiscal year completed before
termination) earned and accrued under this Agreement prior
to the termination of employment (and reimbursement under
this Agreement for expenses incurred prior to the
termination of employment);
(ii) the Executive shall receive a single-sum cash payment
equal
to two times the sum of (x) the Executive's Annual Salary as
in effect immediately before such termination as calculated
for a period of 12 months, and (y) the Executive's bonus
payable in accordance with Section 3.2 for the fiscal year
in which such termination occurs, payable no later than ten
days after such termination;
(iii) for a period of one year after terminati
