EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of September 1, 1992, by and between
LUIGINO'S, INC., a Minnesota corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇, an
individual resident of the State of Minnesota ("Executive").
WHEREAS, the Company wishes to continue the employment of Executive on
the terms and conditions set forth in this agreement, and Executive wishes to be
retained and employed by the Company on such terms and conditions.
NOW, THEREFORE, in consideration of the premises and the respective
undertakings of the Company and Executive set forth below, the Company and
Executive agree as follows:
1. Employment. The Company hereby employs Executive, and Executive
accepts such employment and agrees to perform services for the Company for the
period and upon the other terms and conditions set forth in this agreement.
2. Term. Unless terminated at an earlier date in accordance with
section 7 of this agreement, the term of Executive's employment hereunder shall
be until December 31, 1996 commencing on the date of this agreement.
3. Position and Duties.
3.01 Service with Company. During the term of this agreement,
Executive agrees to perform such reasonable employment duties as the Board of
Directors of the Company shall assign to him from time to time, including, the
current assignment of, and no assignment less than, Executive Vice President of
Operations of the Company.
3.02 Performance of Duties. Executive agrees to serve the
Company faithfully and to the best of his ability and to devote his full time,
attention and efforts to the business and affairs of the Company during the term
of this agreement. Executive hereby confirms that he is under no contractual
commitments inconsistent with his obligations set forth in this agreement, and
that during the term of this agreement, he will not render or perform services
for any other corporation, firm, entity or person which are inconsistent with
the provisions of this agreement.
4. Compensation.
4.01 Base Salary. As compensation in full for all services to
be rendered by the Executive under this agreement during the period commencing
on the date of this agreement and ending on December 31, 1993, the Company shall
pay to Executive a base salary at the rate of $125,000 per annum, which salary
shall be paid on a periodic basis in accordance with the Company's normal
payroll procedures and policies. The base salary payable to Executive during
each subsequent calendar year during the term of this Agreement shall be
reviewed annually by
the Board of Directors of the Company, but shall in no event be less than
$125,000; provided, however, that increases in such base salary shall be subject
to the sole and absolute discretion of the Board of Directors. In no event shall
the salary be less than the previous year's salary.
4.02 Bonus Compensation. In addition to the base salary
described in section 4.01 the Company shall pay to Executive for each calendar
year beginning 1992 a bonus equal in amount to 75% of base salary. In the event
the Marketing Department reaches 100% Plan Goal for 1992 as provided in Exhibit
A hereto, the amount of the bonus shall be 100% of base salary.
This same agreement will prevail each year of the contract.
4.03 Participation in Benefit Plans. Executive shall also be
entitled to participate in all employee benefit plans or programs (including
vacation time) of the Company to the extent that his position, title, tender,
salary, age, health and other qualifications make him eligible to participate.
The Company does not guarantee the adoption or continuance of any particular
employee benefit plan or program during the term of this agreement, and
Executive's participation in any such plan or program shall be subject to the
provisions, rules and regulations applicable thereto.
5. Confidentiality. The Company and Executive agree that this agreement
shall be kept absolutely confidential between Executive, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Company, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President of Sales and
Marketing, and counsel.
6. Noncompetition Covenant. Executive agrees that, during the term of
his employment by the Company and for a period of eighteen (18) months after the
termination of such employment (whether such termination is with or without
cause, or whether such termination is occasioned by Executive or the Company),
he shall not, directly or indirectly, engage in competition with the Company in
any manner or capacity (e.g., as an advisor, principal, agent, partner, officer,
director, stockholder, employee, member of any association, or otherwise) in any
phase of the business which the Company is conducting during the term of this
agreement, including the design, development, manufacture, distribution,
marketing, leasing or selling of accessories, devices, or systems related to the
products or services being sold by the Company; provided, that the geographical
scope of this covenant not to compete shall be limited to those geographical
areas in which the Company has engaged in business during the term of this
agreement.
7. Termination.
7.01 Grounds for Termination. This agreement shall terminate
prior to the expiration of the term set forth in section 2 in the event that at
any time during such term:
(a) Executive shall die or shall have become disabled,
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(b) Executive's employment shall be terminated by the
Company for "cause" (as defined in Section 7.05
hereof),
(c) Executive shall terminate his employment for "Good
Reason" (as defined in Section 7.06 hereof),
(d) Executive's employment shall be terminated by the
Company without cause" on ninety (90) days written
notice given by the Company to Executive,
(e) Executive's employment shall be terminated by
Executive without "Good Reason" on ninety (90) days
written notice given by the Executive to the Company
or
(f) The parties shall mutually agree in writing to such
termination.
7.02 Payments to Employee. Upon any termination pursuant to
Section 7.01(a), (b), (c), (d) or (e), the Company shall pay to Executive (or
his heirs and representatives) W the base salary provided for in Section 4.01
hereof through the date of termination, (ii) except in the case of termination
of employment pursuant to Section 7.01(b) or (e), the amount of bonus
compensation referred to in Section 4.02 hereof for the calendar year in which
such termination occurs multiplied by a fraction, the numerator of which is
number of calendar months (including any partial month) during which the
Executive was employed by the Company during such calendar year and the
denominator of which is twelve (12), and (iii) any amounts payable pursuant to
that certain Luigino's, Inc. Phantom Stock Plan Bonus Award and Agreement
("Phantom Stock Agreement") in accordance with the terms and conditions therein.
In the case of termination of employment pursuant to Section 7.01(c), the amount
payable pursuant to clause (iii) hereof shall constitute payment in full of any
and all claims by Executive arising from such termination of employment. The
proportionate share of bonus compensation referred to in Section 4.02 shall be
payable within one hundred eighty (180) business days from and after the date
the amount thereof is determined.
7.03 Continuing Obligation of Employee. Notwithstanding any
termination of this agreement, Executive, in consideration of his employment
hereunder to the date of such termination, shall remain bound by the provisions
of this agreement which specifically relate to periods, activities or
obligations upon or subsequent to the termination of Executive's employment.
7.04 "Disability" Defined. The Executive shall have become
disabled, for the purpose of this agreement, in the event that Executive shall
fail, because of illness or incapacity, to render services of the character
contemplated by this agreement over a period of ninety (90) days during any
three hundred sixty-five (365) day period.
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7.05 "Cause" Defined. For purposes of this agreement, "cause"
shall mean:
(a) An act or acts of personal dishonesty taken by
Executive which result in material loss to the
Company,
(b) Executive's refusal to comply with or implement
reasonable policies established by the Company's
Board of Directors,
(c) Executive's engaging in illegal or fraudulent conduct
that is materially injurious to the Company,
(d) The misappropriation or wrongful disclosure of the
Company's trade secrets or confidential information,
or
(e) The failure by Executive to meet "industry standards"
in performing his duties and obligations under this
agreement. For this purpose, "industry standards"
shall be determined with reference to executives who
perform comparable duties and functions for companies
comparable, in size and other respects, to the
Company for compensation and incentives comparable to
that provided by the Company to Executive.
7.06 Termination by Executive for Good Reason. Executive may
terminate his employment under this agreement for good reason ("Good Reason") in
accordance with the provisions of this Section 7.06. Termination by Executive
for "Good Reason" shall mean termination of employment based on the failure by
the Company to comply with any material provision of this agreement which has
not been cured within a reasonable period of time after written notice of such
noncompliance has been given by Executive to the Company. Good Reason shall
include, but not be limited to, the following:
(a) A material, adverse change in Executive's status or
position as an executive officer of the Company,
which is not remedied within a reasonable period of
time after the Company's receipt of written notice of
such adverse change from the Executive; or
(b) The Company's requiring Executive to be based
anywhere other than wherever the Company's offices
may be located at anytime during the term of this
agreement, except for required travel on the
Company's business to an extent substantially
consistent with the business travel obligations which
Executive undertook on behalf of the Company prior to
the date of this agreement.
7.07 Surrender of Records and Property. Upon termination of
his employment with the Company, Executive shall deliver promptly to the Company
all records, manuals, books,
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blank forms, documents, letters, memoranda, notes, notebooks, reports, data,
tables, calculations or copies thereof, which are the property of the Company or
which relate in any way to the business, products, practices or techniques of
the Company, and all other property, trade secrets and confidential information
of the Company, including, but not limited to, all documents which in whole or
in part contain any trade secrets or confidential information of the Company,
which in any of these cases are in his possession or under his control.
8. Miscellaneous.
8.01 Governing Law. This agreement is made under and shall be
governed by and construed in accordance with the laws of the State of Minnesota.
8.02 Complete Agreement. This agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
all prior agreements and understandings with respect to such subject matter,
including without limitation that certain employment agreement dated as of
January 1, 1992 between the Company and the Executive, and the parties hereto
have made no agreements, representations or warranties relating to the subject
matter of this agreement which are not set forth herein. Without limiting the
generality of the foregoing, Executive specifically acknowledges and agrees that
the Company shall have no obligation to provide Executive with any salary, bonus
or other form of compensation or benefit whatsoever which is not specifically
provided for in this agreement or in the Phantom Stock Agreement referred to in
Section 7.02 hereof and the provision of any such salary, bonus or other form of
compensation or benefit not so specifically provided for shall be at the sole
and absolute discretion of the Company.
8.03 Withholding Taxes. The Company may withhold from any
benefits payable under this agreement all federal, state, city or other taxes as
shall be required pursuant to any law or governmental regulation or ruling.
8.04 Amendments. No amendment or modification of this
agreement, including without limitation any extension of the term beyond
December 31, 1996, shall be deemed effective unless made in writing and signed
by the parties hereto.
8.05 No Waiver. No term or condition of this agreement shall
be deemed to have been waived, nor shall there be any estoppel to enforce any
provisions of this agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
8.06 Equality. It is understood and here stated that through
the term of Executive's employment hereunder and so long as ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ is
employed by the Company,
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Executive and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ will have the same exact compensation program no
matter what title each holds.
8.07 Arbitration.
(a) Except as provided in Section 8-07(b) below, any
claims or disputes of any nature between the parties
arising from or related to the performance, breach or
termination of this agreement or the meaning or
application of its terms shall be resolved
exclusively by arbitration before the American
Arbitration Association in Minneapolis, Minnesota
pursuant to the Association's rules for commercial
arbitration. The decision of the arbitrator shall be
final and binding upon both parties.
(b) For purposes of any arbitration involving Section
7-05(e), there shall be three independent
arbitrators, each having experience as a senior
executive in the food industry. One such arbitrator
shall be selected by each of the Company .and
Executive and the two arbitrators so selected shall
select the third arbitrator.
(c) This Section shall have no application to claims by
the Company asserting violations of or seeking to
enforce, by injunction or otherwise, the terms of
this agreement. Such claims may be maintained by the
Company in a suit in any court of competent
jurisdiction.
IN WITNESS WHEREOF, Executive and the Company have executed this
agreement as of the date set forth in the first paragraph.
LUIGINO'S, INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇
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Print Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Chief Financial Officer
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[the "Company"]
/s/▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇
["Executive"]
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