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EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of February 22, 2001 (the "Effective Date"), by and between Glacier Distribution
Company, Inc., a Colorado corporation (the "Company"), and Xxxx Xxxxxxxx, (the
"Employee").
Recitals
A. Prior to the date of this Agreement, Employee has not held any
positions with the Company.
B. The Company desires to employ the Employee from the date set forth
above (the "Effective Date") until expiration of the term of this Agreement, and
Employee is willing to be employed by Company during that period, on the terms
and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, In consideration of the mutual covenants and promises
of the parties, the Company and Employee covenant and agree as follows:
1. Duties. During the term of this Agreement, Employee will be employed
by the Company to serve as Chief Information Officer. The Employee will devote
such amount of business time to the conduct of the business of the Company as
may be reasonably required to effectively discharge Employee's duties under this
Agreement and, subject to the supervision and direction of the Company's Board
of Directors (the "Board"), will perform those duties and have such authority
and powers as are customarily associated with the offices of a Chief Information
Officer of a company engaged in a business that is similar to the business of
the Company, including (without limitation) (a) the authority to direct and
manage the day-to-day operations and affairs of the Company, and (b) the
authority to hire and discharge employees of the Company. Unless the parties
agree otherwise in writing, during the term of this Agreement, Employee will not
be required to perform services under this Agreement other than at Company's
principal place of business in Denver, Colorado; provided, however, that Company
may, from time to time, require Employee to travel temporarily to other
locations on the Company's business. Notwithstanding the foregoing, nothing in
this Agreement is to be construed as prohibiting Employee from continuing to
serve as a director or member of various professional, charitable and civic
organizations in the same manner as immediately prior to the execution of this
Agreement.
2. Term of Employment
2.1 Definitions. For purposes of this Agreement the following terms
have the following meanings:
(a) "Termination for Cause" means termination by Company of
Employee's employment (i) by reason of Employee's willful dishonesty
towards,
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fraud upon, or deliberate injury or attempted injury to, the Company,
(ii) by reason of Employee's material breach of this Agreement or
(iii) by reason of Employee's gross negligence or intentional
misconduct with respect to the performance of Employee's duties under
this Agreement; provided, however, that no such termination will be
deemed to be a Termination for Cause unless the Company has provided
Employee with written notice of what it reasonably believes are the
grounds for any Termination for Cause and Employee fails to take
appropriate remedial actions during the 30th day period following
receipt of such written notice.
(b) "Termination Other than For Cause" means termination by
the Company of Employee's employment by the Company for reasons other
than those which constitute Termination for Cause.
(c) "Voluntary Termination" means termination by the Employee
of the Employee's employment with the Company, excluding termination by
reason of Employee's death or disability as described in Sections 2.5
and 2.6.
2.2 Basic Term. The term of employment of Employee by the Company will
commence on the Effective Date and will extend through the period ending no
later than thirty-six (36) months after the Effective Date, (the "Termination
Date")
2.3 Termination for Cause. Termination for Cause may be effected by
Company at any time during the term of this Agreement and may be effected by
written notification to Employee; provided, however, that no Termination for
Cause will be effective unless Employee has been provided with the prior written
notice and opportunity for remedial action described in Section 2.1. Upon
Termination for Cause, Employee is to be immediately paid all accrued salary,
incentive compensation to the extent earned, vested deferred compensation (other
than pension plan or profit sharing plan benefits, which will be paid in
accordance with the applicable plan), and accrued vacation pay, all to the date
of termination, but Employee will not be paid any severance compensation.
2.4 Termination Other Than for Cause. Notwithstanding anything else in
this Agreement, Company may effect a Termination Other Than for Cause at any
time upon giving notice to Employee of such Termination Other Than for Cause.
Upon any Termination Other Than for Cause, Employee will immediately be paid all
accrued salary, all incentive compensation to the extent earned, severance
compensation as provided in Section 4, vested deferred compensation (other than
pension plan or profit sharing plan benefits, which will be paid in accordance
with the applicable plan), and accrued vacation pay, all to the date of
termination.
2.5 Termination Due to Disability. In the event that, during the term
of this Agreement, Employee should, in the reasonable judgment of the Board,
fail to perform Employee's duties under this Agreement because of illness or
physical or mental incapacity ("Disability"), and such Disability continues for
a period of more than three
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(3) consecutive months, Company will have the right to terminate Employee's
employment under this Agreement by written notification to Employee and payment
to Employee of all accrued salary and incentive compensation to the extent
earned, severance compensation as provided in Section 4, vested deferred
compensation (other than pension plan or profit sharing plan benefits, which
will be paid in accordance with the applicable plan), and all accrued vacation
pay, all to the date of termination. Any determination by the Board with respect
to Employee's Disability must be based on a determination of competent medical
authority or authorities, a copy of which determination must be delivered to the
Employee at the time it is delivered to the Board. In the event the Employee
disagrees with the determination described in the previous sentence, Employee
will have the right to submit to the Board a determination by a competent
medical authority or authorities of Employee's own choosing to the effect that
the aforesaid determination is incorrect and that Employee is capable of
performing Employee's duties under this Agreement. If, upon receipt of such
determination, the Board wishes to continue to seek to terminate this Agreement
under the provisions of this section, the parties will submit the issue of
Employee's Disability to arbitration in accordance with the provisions of this
Agreement.
2.6 Death. In the event of Employee's death during the term of this
Agreement, Employee's employment is to be deemed to have terminated as of the
last day of the month during which Employee's death occurred, and Company will
pay to Employee's estate accrued salary, incentive compensation to the extent
earned, vested deferred compensation (other than pension plan or profit sharing
plan benefits, which will be paid in accordance with the applicable plan), and
accrued vacation pay, all to the date of termination.
2.7 Voluntary Termination. In the event of a Voluntary Termination,
Company will immediately pay to Employee all accrued salary, all incentive
compensation to the extent earned, vested deferred compensation (other than
pension plan or profit sharing plan benefits, which will be paid in accordance
with the applicable plan), and accrued vacation pay, all to the date of
termination, but Employee will not be paid any severance compensation.
2.8 Effect of Termination on Option Agreement. Notwithstanding anything
to the contrary contained in this Agreement, any termination of Employee's
employment by the Company will have no effect on Employee's rights under that
certain Stock Option Agreement granted to Employee pursuant to the Company's
Employee-Shareholder Performance Stock Option Plan, which agreement was entered
into between the Employee and the Company as of the Effective Date.
3. Salary, Benefits and Other Compensation.
3.1 Base Salary. As payment for the services to be rendered by Employee
as provided in Section 1 and subject to the terms and conditions of Section 2,
Company agrees to pay to Employee a "Base Salary," payable in equal installments
consistent with
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Company payroll policies. The Base Salary payable to Employee under this Section
will be $85,000.00.
3.2 Incentive Bonus Plans. During the term of his employment under this
Agreement, the Employee will be eligible to participate in all bonus and
incentive plans established by the Board including, without limitation, the
Company's 2001 Management Bonus Plan.
3.3 Incentive Options Plan. During the term of employment under this
Agreement, Employee will participate in incentive option plan established by the
Board including, without limitation, the Company's 2001 Option Plan. Employee
will receive 100,000 common stock options exercisable at $1.00 per share to be
vested on the following schedule: 30% immediately, 30% in Year 1, 30% in Year 2
and 10% in Year 3.
3.4 Benefit Plans. During the term of Employee's employment under this
Agreement, the Employee is to be eligible to participate in all employee benefit
plans to the extent maintained by the Company, including (without limitation)
complete coverage for Employee and family for medical and dental programs, paid
vacations, and similar plans or programs, subject in each case to the generally
applicable terms and conditions of the plan or program in question and to the
determinations of any committee administering such plan or program. On
termination of the Employee for any reason, the Employee will retain all of
Employee's rights to benefits that have vested under such plan, but the
Employee's rights to participate in those plans will cease on the Employee's
termination unless the termination is a Termination Other Than for Cause, in
which case Employee's rights of participation will continue for a period of
three (3) months following Employee's termination.
3.5 Withholding of Taxes. The Employee understands that the services to
be rendered by Employee under this Agreement will cause the Employee to
recognize taxable income, which is considered under the Internal Revenue Code of
1986, as amended, and applicable regulations thereunder as compensation income
subject to the withholding of income tax (and Social Security or other
employment taxes). The Employee hereby consents to the withholding of such taxes
as are required by the Company.
3.6 Vacation. During the term of this Agreement, Employee will be
entitled to two (2) weeks paid vacation time per year.
3.7 Expenses. During the term of this Agreement, Company will reimburse
Employee for Employee's reasonable out-of-pocket expenses incurred in connection
with Company's business, including travel expenses, food, and lodging while away
from home, subject to such policies as Company may from time to time reasonably
establish for its employees.
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4. Severance Compensation
4.1 Termination Other Than for Cause; Payment in Lieu of Notice. In the
event Employee's employment is terminated in a Termination Other Than for Cause,
Employee will be paid as severance pay Employee's Base Salary for the period
commencing on the date that Employee's employment is terminated and ending on
the date which is six (6) months thereafter, on the dates specified in Section
3.1 for payment of Employee's Base Salary.
4.2 Termination for Disability. In the event Employee's employment is
terminated because of Employee's disability pursuant to Section 2.5, Employee
will be paid as severance pay Employee's Base Salary for the period commencing
on the date that Employee's employment is terminated and ending on the date
which is three (3) months thereafter, on the dates specified in Section 3.1 for
payment of Employee's Base Salary.
4.3 Other Termination. In the event of a Voluntary Termination,
Termination for Cause or Death, Employee or Employee's estate will not be
entitled to any severance pay.
5. Confidentiality and Noncompetition
5.1 Confidentiality. Because of Employee's employment by Company,
Employee will have access to trade secrets and confidential information about
Company, its products, its customers, and its methods of doing business (the
"Confidential Information"). During and after the termination of Employee's
employment by the Company, Employee may not directly or indirectly disclose or
use any such Confidential Information; provided, that Employee will not incur
any liability for disclosure of information which (a) is required in the course
of Employee's employment by the Company, (b) was permitted in writing by the
Board or (c) is within the public domain or comes within the public domain
without any breach of this Agreement.
5.2 Noncompetition. In consideration of Employee's access to the
Confidential Information, Employee agrees that for a period of one (1) years
after termination of Employee's employment, Employee will not, directly or
indirectly, use such Confidential Information to compete with the business of
the Company, as the business of the Company may then be constituted, within any
state, region or locality in which the Company is then doing business or
marketing its products. Employee understands and agrees that direct competition
means development, production, promotion, or sale of products or services
competitive with those of Company. Indirect competition means employment by any
competitor or third party providing products competing with Company's products,
for whom Employee will perform the same or similar function as he performs for
Company. In addition, for a period of (1) years after termination of Employee's
employment, Employee will not induce or attempt to induce any employee of the
Company to discontinue his or her employment with the Company for the purpose of
becoming employed by any competitor of Company, nor will
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Employee initiate discussions, negotiations or contacts with persons known by
Employee to be a customer or supplier of the Company at the time of Employee's
termination of employment for the purpose of competing with the Company.
6. Assignment of Inventions. All processes, inventions, patents,
copyrights, trademarks, and other intangible rights (collectively the
"Inventions") that may be conceived or developed by Employee, either alone or
with others, during the term of Employee's employment, whether or not conceived
or developed during Employee's working hours, and with respect to which the
equipment, supplies, facilities, or trade secret information of Company was
used, or that relate at the time of conception or reduction to practice of the
Invention to the business of the Company or to Company's actual or demonstrably
anticipated research and development, or that result from any work performed by
Employee for Company, will be the sole property of Company, and Employee hereby
assigns to the Company all of Employee's right, title and interest in and to
such Inventions. Employee must disclose to Company all inventions conceived
during the term of employment, whether or not the invention constitutes property
of Company under the terms of the preceding sentence, but such disclosure will
be received by Company in confidence. Employee must execute all documents,
including patent applications and assignments, required by Company to establish
Company's rights under this Section.
7. Miscellaneous.
7.1 Waiver. The waiver of any breach of any provision of this Agreement
will not operate or be construed as a waiver of any subsequent breach of the
same or other provision of this Agreement.
7.2 Entire Agreement; Modification. Except as otherwise provided in the
Agreement and in the Option Agreement, this Agreement represents the entire
understanding among the parties with respect to the subject matter of this
Agreement, and this Agreement supersedes any and all prior understandings,
agreements, plans, and negotiations, whether written or oral, with respect to
the subject matter hereof, including without limitation, any understandings,
agreements, or obligations respecting any past or future compensation,
bonuses, reimbursements, or other payments to Employee from Company. All
modifications to the Agreement must be in writing and signed by the party
against whom enforcement of such modification is sought.
7.3 Notice. All notices and other communications under this Agreement
must be in writing and must be given by personal delivery, telecopier or
telegram, or first class mail, certified or registered with return receipt
requested, and will be deemed to have been duly given upon receipt if personally
delivered, five (5) days after mailing, if mailed, or eight (8) hours after
transmission, if delivered by telecopies or telegram, to the respective persons
named below:
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If to Company: Glacier Distribution Company, Inc.
0000 00xx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 8265
If to Employee: Xxxx Xxxxxxxx
Any party may change such party's address for notices by notice duly given
pursuant to this Section.
7.4 Headings. The Section headings of this Agreement are intended for
reference and may not by themselves determine the construction or interpretation
of this Agreement.
7.5 Governing Law. This Agreement is to be governed by and construed in
accordance with the laws of the State of Colorado applicable to contracts
entered into and wholly to be performed within the State of Colorado by Colorado
residents. Any controversy or claim arising out of or relating to this
Agreement, or breach of this Agreement (except any controversy or claim with
respect to Section 5 or 6), is to be settled by arbitration in Denver, Colorado
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrators may be
entered in any court having jurisdiction. There must be three arbitrators, one
to be chosen directly by each party at will, and the third arbitrator to be
selected by the two arbitrators so chosen. Each party will pay the fees of the
arbitrator he or she selects and his or her own attorneys, and the expenses of
his or her witnesses and all other expenses connected with presenting his or her
case. Other costs of the arbitration, including the cost of any record or
transcripts of the arbitration, administrative fees, the fee of the third
arbitrator, and all other fees and costs, will be borne equally by the parties.
Notwithstanding anything in this Agreement to the contrary, if any controversy
or claim arises between the parties under Section 5 or 6 of this Agreement, the
Company will not be required to arbitrate that controversy or claim but the
Company will have the right to institute judicial proceedings in any court of
competent jurisdiction with respect to such controversy or claim. If such
judicial proceedings are instituted, the parties agree that such proceedings
will not be stayed or delayed pending the outcome of any arbitration proceeding
under this Agreement.
7.6 Successors and Assigns. This Agreement will be binding on, and
inure to the benefit of, the executors, administrators, heirs, successors, and
assigns of the parties; provided, however, that except as expressly provided in
this Agreement, this Agreement may not be assigned either by Company or by
Employee.
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7.7 Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together will constitute one and the same
Agreement.
7.8 Withholdings. All sums payable to Employee under this Agreement
will be reduced by all federal, state, local, and other withholdings and similar
taxes and payments required by applicable law.
7.9 Enforcement. If any portion of this Agreement is determined to be
invalid or unenforceable, that portion of this Agreement will be adjusted,
rather than voided, to achieve the intent of the parties under this Agreement.
7.10 Indemnification. The Company agrees that it will indemnify and
hold the Employee harmless to the fullest extent permitted by applicable law
from and against any loss, cost, expense or liability resulting from or by
reason of the fact of the Employee's employment hereunder, whether as an
officer, employee, agent, fiduciary, director or other official of the Company,
except to the extent of any expenses, costs, judgments, fines or settlement
amounts which result from conduct which is determined by a court of competent
jurisdiction to be knowingly fraudulent or deliberately dishonest or to
constitute some other type of willful misconduct.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
COMPANY:
GLACIER DISTRIBUTION COMPANY
/s/ XXXX X. XXXXXXX
-----------------------------------------
XXXX X. XXXXXXX
PRESIDENT & CHIEF OPERATING OFFICER
EMPLOYEE:
/s/ XXXX XXXXXXXX
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XXXX XXXXXXXX
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