Exhibit 10.4
FORM OF 1991 SUPERIOR PERFORMANCE INCENTIVE BONUS AGREEMENT
This Agreement is entered into this ______ day of _____________ _____, by
and between Delta Beverage Group, Inc. ("Company"), a Delaware corporation,
and ________________ ("Employee").
I.PURPOSE
The purpose of this Superior Performance Incentive Bonus Agreement
("Agreement") is to advance the interest of the Company by strengthening,
through the payment of incentive bonuses, the ability of the Company to
attract and retain valued key employees. In addition, it is intended to
provide a direct financial incentive for striving continually for more
effective operation of the business of the Company and to accomplish this
purpose with full regard to the protection of the stockholders' investment
and the furtherance of the Company's earning power.
II.EFFECTIVE DATE OF PLAN
The effective date of this Agreement shall be January 1, 1991.
III.ADMINISTRATION
This Agreement shall be administered by the Executive Committee of the
Board of Directors of the Company in its sole discretion, and in applying and
interpreting the provisions of the Plan, the decisions of the Executive
Committee shall be final.
IV.TIME AND METHOD OF PAYMENTS
Payments of the amounts determined under Paragraph V shall be made by
check on or before December 31 of the third year following the year to which
a grant of an incentive bonus relates. Employee must be employed by the
Company on such payment date in order to receive payment of a vested
incentive bonus. Employee shall not have any right to any incentive bonus
hereunder until such incentive bonus has been paid to him. In the event of a
Change in Control, all incentive bonuses that have been granted to Employee
pursuant to Paragraph V shall become immediately vested and shall be paid to
Employee upon the effective date of the Change of Control. If Employee's
employment terminates for any reason upon a Change of Control, Employee shall
not be entitled to a further grant or payment of any incentive bonus. In the
event Employee remains in the employ of the Company after a Change in
Control, grant of any additional incentive bonus shall be made pursuant to
the terms of Paragraph V. Payments in all events shall be paid in a lump sum.
A "Change in Control" shall be deemed to have occurred if:
Page 1 Exhibit 10.4
1. any "person" (including a "group" as determined in accordance
with Section 13(d)(3) of the Securities Exchange Act of 1934), other than
the Excluded Group, becomes the owner after the effective date of this
Agreement, directly or indirectly by purchase, merger, exchange offer,
tender offer, or other business combination (but excluding any conversion
of debt or equity securities by any shareholder other than Equity Beverage,
Inc.), of voting securities of the Company representing 50% or more of the
then outstanding voting securities of the Company; or
2. the Company transfers substantially all of its assets to another
person which is not a wholly-owned subsidiary or parent of the Company or
which is not within the Excluded Group.
For purposes of this Agreement, the "Excluded Group" shall include the
following shareholders of the Company: Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx,
Xxxxxxx X. Xxxxxx, Dakota Beverage Company, Inc. and any "affiliate" of any
such shareholder as defined in Rule 144(a)(1) under the Securities Act of
1933.
V.AMOUNT OF ANNUAL INCENTIVE BONUS
X. XXXXX OF INCENTIVE BONUS IF ANNUAL GOALS MET
Employee shall be entitled to an annual grant of an incentive bonus if
the annual goal of the Company, as set out in Exhibit A (attached hereto and
made a part hereof) is achieved each year. The annual amount of the
incentive bonus for Employee shall be as follows:
Amount of
Year Ending Grant
------------------- -------------
December 31, 1991 $ 75,000
December 31, 1992 90,000
December 31, 1993 110,000
December 31, 1994 125,000
The last grant made under this Plan shall be made on December 31, 1995,
provided the annual goal for 1995 is achieved. The annual grants shall be
credited to a bookkeeping account on the books of the Company.
X. XXXXX OF INCENTIVE BONUS IF ANNUAL GOAL MET ON A CUMULATIVE BASIS OVER TWO
OR MORE YEARS
If an annual goal as set out in Exhibit A is not met, no annual incentive
bonus shall be granted to Employee. If, however, the annual goal for two or
more consecutive years are met on a cumulative basis, an annual incentive
bonus relating to the years in question shall be granted. Grants of
incentive bonuses on a cumulative basis shall only be made if there
Page 2 Exhibit 10.4
is an increase in the Company's annual goals in each succeeding year. A
decrease in the annual goals will disqualify Employee from receiving an
annual grant.
Example 1:
Assume the annual goals are as follows:
Goal for 1991 10% increase in operating income over 1990
operating income
Goal for 1992 10% increase over 1991 operating income goal
Goal for 1993 10% increase over 1992 operating income goal
Goal for 1994 10% increase over 1993 operating income goal
Assume further that the 1991 operating income is only a 5 percent
increase over 1990's operating income. No incentive bonus will be granted.
If, however, the operating income in 1992 increases by 15 percent over the
1991 operating income goal, an incentive bonus for 1991 and 1992 will be
awarded on December 31, 1992, based on the schedule in A, above.
Example 2:
Assume the same facts as in Example 1, except that the 1991 operating
income exceeds the goal by 5 percent. An annual incentive bonus will be
granted to Employee for 1991. Assume the 1992 operating income falls short
of its goal by 5 percent. The 5 percent excess in 1991 will not be carried
over to 1992 and no annual incentive bonus will be granted for 1992.
C. RETAINING INCENTIVE BONUS IF OPERATING INCOME GOAL MET DURING VESTING
PERIOD
In order for an Employee to retain an Incentive Bonus granted under
Paragraphs A, or B, above, the Company must achieve an operating income goal
as set out in Exhibit A-1 (attached hereto and made a part hereof) during
each year of the Vesting Period (as defined in Article VI). If the Company
does not meet the annual operating income goal for a particular year during
the Vesting Period, the payment provided for in Article IV shall be reduced
by one-third for each year the Company did not meet the annual operating
income goal.
VI.VESTING
Subject to Paragraph IV regarding a Change in Control, the grant of an
annual incentive bonus shall vest at the end of the third year following the
December 31st the grant relates to ("Vesting Period"), regardless of when the
grant was actually made.
Page 3 Exhibit 10.4
VII.SEPARATIONS
In case of separation from the Company for any reason (including death
and retirement) before the date an incentive bonus vests, Employee shall not
be entitled to any payments for unvested grants.
VIII.REVISION OR DISCONTINUANCE OF AGREEMENT
This Agreement shall not create any right to future participation therein
of Employee nor limit in any way the right of the Board of Directors to
modify or to rescind the Agreement in whole or in part. No amendment shall
operate to reduce the Employee's incentive bonuses which have been granted
prior to the amendment. Employee shall not have any right to pledge, assign
or otherwise dispose of any unpaid portion of such payments.
IX.RIGHTS AND DUTIES OF SUCCESSORS AND ASSIGNEES
This Agreement shall be assignable and transferable by Company to any
subsidiary or affiliate of Company and shall inure to the benefit of and be
binding upon Employee and his heirs and personal representatives and Company
and its successors and assigns.
X.MISCELLANEOUS
A. APPLICABLE LAW
This Agreement shall be governed by the laws of the State of Minnesota.
B. WITHHOLDING OF TAXES
Company may withhold from any benefits payable under this Agreement all
federal, city or other taxes as may be required pursuant to any law,
governmental regulation, or ruling.
C. NOT AN EMPLOYMENT AGREEMENT
Nothing in this Agreement shall give Employee any right (or impose any
obligation) to continued employment by the Company or any subsidiary or
successor of the Company.
NO TRUST
No trust shall be created to fund this Agreement. The Employee shall
have no greater rights than a general creditor of the Company and all amounts
due under the terms of this Agreement shall be paid from the general assets
of the Company.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and the year first written above.
COMPANY:
DELTA BEVERAGE GROUP, INC.
By
---------------------------------
Xxxxxxx Xxxxxx, President
EMPLOYEE:
---------------------------------
Page 5 Exhibit 10.4
EXHIBIT A
INCENTIVE BONUS ANNUAL GOALS
GENERATE OPERATING INCOME OF:
1991 $12,000,000
1992 16% over 1991
1993 16% over 1992
1994 16% over 1993
Page 6 Exhibit 10.4
EXHIBIT A-1
OPERATING INCOME GOAL
1992 5% over 1991
1993 5% over 1992
1994 5% over 1993
1995 5% over 1994
1996 5% over 1995
1997 5% over 1996
1998 5% over 1997
Page 7 Exhibit 10.4
