Exhibit 10.30
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made effective this 1st day of
January, 1997, by and between DAKOTAH, INCORPORATED, a South Dakota corporation
(the "Company"), and GEORGE C. WHYTE ("Employee").
RECITALS:
A. The Company desires to employ Employee in accordance with the terms
of this Employment Agreement.
B. The Company and Employee desire to enter into this Employment
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained in this Agreement, the parties agree as follows:
1. Nature and Capacity of Employment. The Company hereby agrees to employ
Employee pursuant to the terms of this Agreement. Employee agrees to perform, or
to hold himself available to perform, on a full-time basis, any reasonable
functions prescribed by his superior or the Executive Committee of the Board of
Directors.
2. Term of Employment. The term of this Agreement shall commence as of the
date hereof and continue until December 31, 2001, unless earlier terminated as
provided herein ("Term").
3. Compensation; Executive Compensation Plan. During the first year of the
Term of this Agreement, the Company shall pay Employee an annual base salary
("Base Salary") of One Hundred Fifty Thousand Dollars ($150,000.00), payable in
equal semi-monthly installments. Such annual Base Salary shall increase each
year by a percentage equal to the average percentage increase given to other
corporate employees of the Company, up to a maximum of five percent (5%) per
year. Employee shall also be entitled to participate in the executive
compensation plan as established and modified from time to time by the Company.
4. Employee Benefits; Vacation.
(a) Employee shall be entitled to participate in all retirement plans
and all other employee benefits and policies of the Company so long
as he is employed by the Company, and all payments or other
benefits paid or payable to Employee under such employee benefit
plan or program of the Company shall not be affected or modified by
this Agreement and shall be in addition to the compensation payable
to Employee from time to time under this Agreement; provided,
Employee shall not be entitled to payments of Base Salary or
bonuses while receiving disability payments under a Company
disability plan.
(b) The Company shall reimburse Employee for his actual and reasonable
out-of-pocket expenses incurred in the performance of his duties in
accordance with the policies of the Company in effect from time to
time.
5. Stock Options. Upon the date of this Agreement, Employee shall be
granted an option (the "Option") to purchase 100,000 shares of Company Common
Stock (the "Option Shares") pursuant to the Dakotah, Incorporated 1995 Stock
Option Plan. The Option shall have an exercise price equal to the market price
of such stock on the NASDAQ National Market System as of the close of such
market on September 16, 1996 and a term of seven (7) years. Employee's rights in
the Option Shares shall vest as set forth in the Option. The remaining terms and
provisions of the Option shall be governed by the Dakotah, Incorporated 1995
Stock Option Plan.
6. Loan. Upon the date of this Agreement, the Company shall make available
to Employee a loan in the principal amount equal to the sum of (i) $2.56 per
share multiplied by the number of shares of common stock of the Company to be
purchased by Employee under his stock options granted in 1994 plus (ii) an
amount equal to the tax liability to be incurred by Employee in connection with
the exercise of such options. Such loan shall be evidenced by a written
promissory note, in form and substance reasonably acceptable to the parties, and
the proceeds of the loan shall be used solely in connection with the exercise of
the stock options granted to Employee in 1994. Such loan shall be a full
recourse obligation of Employee, shall bear interest at a variable rate per
annum equal to the rate paid by the Company on its revolving line of credit, and
shall be amortized over a period of five (5) years with annual payments of
principal and accrued interest. The loan shall be secured by a pledge of all
stock of the Company owned by Employee, whether now owned or hereafter acquired,
but excluding shares held by the Company profit plan and shares Employee owned
prior to the date of this Agreement. Employee shall execute and deliver all
documents necessary to grant and perfect such lien, including, without
limitation, a pledge or security agreement, blank stock powers, stock
certificates, and a UCC-1 financing statement.
Fifty percent (50%) of any bonus received by Employee during each year, as
determined on an after-tax basis, shall be applied as a mandatory prepayment on
the amounts to become due under the loan during such year. In addition, the
proceeds, as determined on an after-tax basis, from the sale by Employee of any
stock of the Company shall be applied as a mandatory prepayment on the amounts
to become due under the loan during the year of such sale.
7. Undertakings of Employee. Employee agrees that he shall use his best
efforts to perform the functions of his employment in a professional manner
consistent with executives in other businesses performing similar functions, and
he shall spend his full working time and effort in performance of his duties
with the Company so long as Employee is employed by the Company, and Employee
will not, during the course of his employment by the Company, without prior
written approval of the Board of Directors of the Company, become an employee,
director, officer, agent, partner of or consultant to, or a stockholder of
(except a stockholder of a public company in which Employee owns less than 5% of
the issued and outstanding capital stock of such company) any company or other
business entity which is a significant competitor, supplier or customer of the
Company.
8. Termination of Agreement. This Agreement and Employee's employment may
be terminated prior to the expiration of the Term as follows:
(a) Notwithstanding anything contained herein to the contrary, the
Company, acting by and through its Board of Directors, shall have
the right to immediately terminate this Agreement and thereby
terminate the employment of Employee for "cause," which means: (i)
criminal activity or dishonesty of Employee which is proven or
admitted, (ii) acts of disloyalty to the Company during Employee's
employment with the Company, including without limitation, repeated
public or private disparagement of the Company, its products or
condition, the disclosure of any of the Company's trade secrets to
competitors, or the employment of Employee by a business entity
directly competitive with the Company, or (iii) the failure of
Employee to use his best efforts to perform the functions of his
employment in a professional manner consistent with executives in
other businesses performing similar functions (a bona fide
disability shall not result in a failure to "use best efforts").
(b) If the Board votes to terminate this Agreement and Employee's
employment with the Company for "cause," notice stating the
effective date of such termination shall be delivered to Employee,
which date may be the date of the delivery of such notice. As of
the effective date of such termination of Employee's employment by
the Company, the Company shall be relieved of all further
obligations and liabilities to Employee under this Agreement.
(c) This Agreement, Employee's employment with the Company, and the
Company's obligation to pay Employee his Base Salary and bonus, if
any, shall immediately terminate upon Employee's death.
(d) If Employee voluntarily terminates his employment with the Company,
the Company shall no longer be obligated to pay Employee his Base
Salary or any bonus.
(e) If the Company terminates Employee's employment for any reason other
than cause or death, the Company shall pay Employee a severance
payment equal to his current annual Base Salary in effect as of the
date of termination, provided that if such termination is the direct
result of a change in control (as defined below), such severance
payment shall be equal to two (2) times his annual Base Salary in
effect as of the date of termination. For purposes of this
Agreement, a "change in control" shall be deemed to occur upon any
of the following transactions: (i) a merger or acquisition in which
the Company is not the surviving entity; (ii) the sale, transfer or
other disposition of all or substantially all of the assets of the
Company in liquidation or dissolution of the Company; or (iii) the
acquisition of more than fifty percent (50%) of the Company's
outstanding voting stock directly from the Company's stockholders by
a person or related group of persons (other than the Company or a
person that directly or indirectly controls, is controlled by or is
under common control of the Company).
9. Confidentiality. During and after the Term of this Agreement, Employee
shall not communicate, divulge or use any secret, confidential information,
trade secret, or confidential customer list or information of the Company, to,
or on behalf of any person or entity, except as consented to in writing by the
Company. This obligation shall apply with respect to any such item until such
item ceases (other than through the action of Employee) to be secret or
confidential.
10. Non-Competition. Subject to the payment obligations described below,
during the (i) Term of this Agreement, (ii) any period of Employee's employment
with the Company after the Term of this Agreement, or (iii) the twelve (12)
month period immediately following the termination of Employee's employment
(whether such termination is during or after the Term of this Agreement),
Employee shall not, directly or indirectly, on his own behalf or as a partner,
employee, agent, director, or equity owner of any person, firm, corporation or
otherwise, enter or engage in any business that is competitive with the
Company's business within the continental United States ("Territory"), or,
without limiting the generality of the foregoing, solicit or attempt to solicit
within the Territory any customers or employees of the Company, or persons who
were customers of the Company within the one (1) year period prior to Employee's
termination of employment (whether such termination is during or after the Term
of this Agreement), with the intent to provide such customers with goods or
services which are competitive with those provided by the Company. The parties
agree that the Company's market includes the continental United States and that
limiting competition by Employee in the continental United States is a
reasonable restriction. Notwithstanding the foregoing, in the event of a
termination for any reason other than for "cause" as defined in Section 8(a)(i)
or 8(a)(ii), Employee shall be subject to the non-competition provision set
forth in this Section 10 hereof, but only if and so long as the Company at its
discretion continues to pay Employee his current salary in effect as of the date
of termination. In the event of a termination for "cause," as defined in Section
8(a)(i) or 8(a)(ii), Employee shall be subject to the non-competition provision
set forth in this Section 10 without any payment of additional salary to
Employee.
11. Injunctive Relief. The parties agree that monetary damages will not be
an adequate remedy in the event of any breach of Section 9 or Section 10 of this
Agreement. Accordingly, in addition to any claim for damages, the parties agree
that the Company shall have the right to seek and obtain injunctive or other
equitable relief in the event of any breach or threatened breach of the
provisions of Section 9 or Section 10 hereof.
12. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of South Dakota.
13. Notices. All notices or communications given under this Employment
Agreement by one party to the other shall be in writing and shall be deemed to
have been given when personally delivered or when mailed by United States
registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Company:
Dakotah, Incorporated
North Park Lane
Webster, SD 57274
Attn: Vice Chairman
If to Employee:
George C. Whyte
North Park Lane
Webster, SD 57274
or to such other addresses as may be communicated in writing by either party to
the other.
14. Partial Invalidity. In the event that any provision of this Agreement
is held invalid or unenforceable by any court of competent jurisdiction, then
such provision shall be deemed amended to the extent necessary to conform to
applicable law so as to be valid and enforceable or, if such provision cannot be
so amended without materially altering the intention of the parties, then such
provision shall be stricken and the remainder of this Agreement shall continue
in full force and effect.
15. Entire Agreement; Amendments. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and shall not be amended except in a writing signed by both parties.
16. Survival of Provisions. The provisions contained in Sections 9 and 10
of this Agreement shall survive the Term and any termination of the other
portions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
DAKOTAH, INCORPORATED
By_______________________________
Its____________________________
George C. Whyte