EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Employment Agreement") made and entered into effective the
1st day of February, 1990, by and between Delta Beverage Group, Inc., a Delaware
corporation ("Employer") and Xxxxxxx Xxxxxx ("Executive").
WITNESSETH:
WHEREAS, Employer desires to employ Executive in the capacity and on the
terms and conditions hereinafter set forth, and Executive has agreed to accept
such employment;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT RELATIONSHIP. Employer hereby employs Executive as
President and Chief Operating Officer of Employer, subject to the direction
of the Board of Directors of Employer. Executive accepts such employment and
agrees to devote his loyalty, skills and substantially his full-time efforts
to the conduct of the Employer's business operations.
2. INITIAL TERM OF EMPLOYMENT. The "Term" of this Employment Agreement
and the performance of Executive's services shall commence as of the date of
this Employment Agreement and shall continue for three (3) years from the
date of this Agreement. Upon expiration of the initial Term of this
Agreement, this Agreement shall be renewable for one-year Terms, subject to
the mutual agreement of the parties.
3. COMPENSATION. For all services rendered by Executive to Employer as
President and Chief Executive officer, Executive shall be compensated by
Employer in accordance with the terms and conditions set forth herein:
3.1 BASE SALARY. The base salary of Executive shall be $155,000 on
an annualized basis during the Executive's term of employment ("Base
Salary"). The salary shall be payable at $12,916.66 per month. Such
salary may be increased pursuant to periodic reviews to be held by the
Board of Directors. Such salary shall be increased only upon the
unanimous action of the Board of Directors.
3.2 BONUS. Executive shall be eligible to receive, as additional
compensation, an incentive bonus as set out in the Delta Beverage Group
Incentive Bonus Agreement adopted effective February 1, 1990 and a Stock
Award Plan adopted effective February 1, 1990. Executive shall be one
hundred percent (100%) vested in the Stock Award Plan on December 31,
1993.
3.3 FRINGE BENEFITS. Executive shall be entitled to those employee
benefits as are available to other employees of Employer or as
determined by the unanimous action of the Board of Directors.
Page 1 Exhibit 10.3
3.4 EXPENSE REIMBURSEMENTS. Executive is authorized to incur
reasonable expenses in connection with the business of the Employer.
Employer will reimburse Executive for all such reasonable expenses.
3.5 ANNUAL TRANSPORTATION ALLOWANCE. Executive shall receive an
annual transportation allowance of $10,000. The amount of the allowance
will be grossed-up to reflect all federal and state taxes payable with
respect to the Allowance. For determining the amount of the tax
gross-up it shall be assumed that the tax rate will be the individual
federal and state income tax rate applicable to the highest income
bracket for that year for the Executive.
4. TERMINATION. This Agreement shall continue for the period set forth
in Section 2 hereof, subject to the following:
4.1 TERMINATION FOR CAUSE. Employer may terminate this Agreement
for cause, effective upon notice in writing to the Executive.
"Cause," for purposes of this Agreement, is defined as the
conviction or admission in writing by Employee of a felony, fraud
against Employer, misappropriation of Employer's assets or
embezzlement. Upon the giving of such notice, this Agreement shall
immediately terminate and Employer shall have no further obligation
to Executive under this Agreement.
4.2 TERMINATION WITHOUT CAUSE. During the Term this Agreement may
be terminated without cause by Employer upon written notice to
Executive, which notice shall be effective on the last business day of
the month in which such notice is given. In the event Employer
terminates this Agreement without cause, Executive's Base Salary, as
provided in Section 3.1 hereof, shall be continued for the remaining
Term of this Agreement from such date of termination of employment and
Executive's health benefits, as may be provided in Section 3.3 hereof,
shall be continued for the remaining Term of this Agreement from such
date of termination of employment unless Executive becomes covered by
another employer's group health plan as a result of his employment with
such other employer.
4.3 RESIGNATION. Executive may resign from his position and
terminate his employment at any time upon 180 days written notice to
Employer. In the event Executive ceases to be employed by Employer in
accordance with this provision, Employer shall have no obligation to pay
Executive pursuant to Section 3 of this Agreement except as required by
law.
4.4 DISABILITY. This Agreement shall terminate upon the total
disability of Executive. In the event this Agreement is terminated
because of Executive's disability, Executive's compensation, as provided
in Section 3 hereof, shall be continued for the two year period from
such termination; provided that in such event, Executive shall not
thereafter be entitled to the continuation of fringe benefits as
provided in Section 3 hereof, except as required by law, and except for
continuation of health, dental, disability and life insurance benefits
as provided under the terms
Page 2 Exhibit 10.3
of Executive's fringe benefit plan in effect on the date of such
termination of employment.
The determination of total disability shall be made in accordance with
the provisions of any applicable disability plan owned by Employer and
covering Executive. If there is no such plan or such plan does not specify
a definition of total disability, such determination shall be made by the
Board of Directors.
4.5 DEATH. If Executive's employment is terminated by his death
prior to the end of the Term of this Agreement, Employer shall pay to
Executive's estate, for the period commencing on the first day of the
month following Executive's death and continuing to the termination of
the Agreement, the Base Salary that Executive would be entitled to
receive if living.
4.6 INSURANCE. Employer agrees to obtain, in its name, life
insurance on the life of Executive and disability insurance relating to
Executive with respect to the obligations of Employer under Sections 4.4
and 4.5, respectively.
COVENANT NOT TO COMPETE. In the event employment with the Employer is
terminated for any reason, it is agreed that:
(a) Employee will inform any new employer, before accepting employment,
of the existence of this Agreement and give such employer a copy
thereof; and
(b) Employee will not, for the remainder of the Term after termination
of employment, render services directly or indirectly, to any person
or organization in connection with the development, manufacture,
marketing, sale, merchandising, leasing, servicing or promotion of a
Competitive Product that is sold or intended for sale in any
geographic area in which Employer or its Pepsi-Cola franchisees
actively markets or intends to actively market a product of the same
general type or function. Employee may accept employment with a
competitor of Employer; provided that before Employee accepts such
employment, he provides Employer with separate written assurances,
satisfactory to Employer, from such competitor and from Employee
that Employee will not render services, directly or indirectly, in
connection with any Competitive Product during the remainder of the
Term; and
(c) Employee will not, directly or indirectly: (i) influence or advise
any person who is or shall be in the service of Employer to leave
such service to compete with Employer or to enter into the service
of any competitor of or anyone intending to compete with Employer;
or (ii) influence or advise any competitor of or anyone intending to
compete with Employer to engage the services of any person who is or
shall be in the service of Employer.
For purposes of this Agreement Competitive Product means any product,
process, system or service of any person or organization other than
Employer, in existence or
Page 3 Exhibit 10.3
under development, that is the same as, similar to or competes with, or has
a usage allied to, a product, process, system or service (i) upon which
Employee worked (in either a sales or nonsales capacity) during the Term
of his employment with the Employer, or (ii) about which Employee acquired
or had access to confidential information or trade secrets through
Employee's work with Employer.
The term of this Covenant Not to Compete shall be suspended during any
period in which (i) Employee has violated any restriction contained in the
Covenant Not to Compete; or (ii) any legal process enjoins or limits
enforcement of this Covenant Not to Compete. This Covenant Not to Compete
shall be prospectively and specifically enforceable from the date of
Employee's last violation of any restriction contained herein, or from the
date of a Final Court Decision relating to the subject matter hereof.
5. NOTICES. All notices given hereunder shall be in writing and shall
be personally served or sent by registered or certified mail, return receipt
requested, addressed as follows:
To Employer:
Delta Beverage Group, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
To Executive:
Xxxxxxx Xxxxxx
Delta Beverage Group, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
6. MISCELLANEOUS.
A. COMPLETE AGREEMENT. This Employment Agreement is the entire Employment
Agreement between the parties concerning the subject matter hereof and
supersedes and replaces any existing arrangement between the parties
hereto relating to Executive's employment. Employer and Executive
hereby acknowledge that there are no agreements or understandings of
any nature, oral or written, regarding Executive's employment, apart
from this Employment Agreement.
B. NO WAIVER. No failure on the part of Employer or Employee to exercise,
and no delay in exercising any right hereunder will operate as a waiver
thereof, nor will any single or partial exercise of any right hereunder
by Employer or Employee preclude any other or further exercise thereof
or the exercise of any other right.
Page 4 Exhibit 10.3
C. SEVERABILITY. It is further agreed and understood by the parties
hereto that if any part, term or provision of this contract should be
held unenforceable in the jurisdiction in which either party seeks
enforcement of the contract, it shall be construed as if not containing
the invalid provision or provisions, and the remaining portions or
provisions shall govern the rights and obligations of the parties.
D. GOVERNING LAW. This Employment Agreement shall be construed and
enforced in accordance with the internal laws of the State of
Minnesota, without regard to conflicts of law provisions.
F. ASSIGNMENT. This Employment Agreement is personal in nature and cannot
be assigned by Executive. The terms, conditions and covenants herein
shall be binding upon the heirs and personal representatives of
Executive, and the successors, assigns of Employer and any subsidiary
or "affiliate" of Employer.
G. REMEDIES NOT EXCLUSIVE. No remedy conferred hereunder is intended to
be exclusive, and each shall be cumulative and shall be in addition
to every other remedy. The election of any one or more remedies shall
not constitute a waiver of any other remedy.
F. SURVIVAL OF OBLIGATIONS. Employee's obligations under Section 6 shall
survive the termination of Employee's employment with Employer.
H. CAPTIONS. Captions and section headings used herein are for
convenience only and are not a part of this Employment Agreement, and
shall not be used in construing it.
Page 5 Exhibit 10.3
IN WITNESS WHEREOF, the parties have duly executed this Employment
Agreement as of the day and year first above written.
EMPLOYER
DELTA BEVERAGE GROUP
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
By Xxxxxx X. Xxxxxx
Its Chief Executive Officer
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx Xxxxxx
Page 6 Exhibit 10.3
