Exhibit 10.28
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made effective this 8th day of
April, 1997, by and between DAKOTAH, INCORPORATED, a South Dakota corporation
("Company"), and WILLIAM RETTERATH ("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. In addition, Employee's duties shall include the following:
(a) Participation in the Senior Management Group at Dakotah. The Senior
Management Group includes the CEO, President, CFO, VP-National
Sales, VP-Corporate Sales and Manufacturing Manager.
(b) Responsible, in concert with the CEO, for the day-to-day
coordination of Sales and Manufacturing functions of the company
with the Finance functions.
(c) Responsible, in concert with the CEO, for the day-to-day
implementation of the Strategic Plan and Budget.
(d) Responsible for all Financial functions including, but not limited
to, financial accounting, financial and capital management, cost
accounting, internal auditing, Securities and Exchange Commission
reporting and compliance, banking relationships, most contractual
relationships (ie: insurance) and other related responsibilities.
(e) Responsible for coordinating with the CEO and Corporate Counsel on
Trademark and Licensing activities.
(f) Responsible for the Strategic Planning, Financial Projections and
Budgeting Process.
(g) Responsible for all Management Information Systems including the
supervision of the MIS department and the conversion of Dakotah's
Computer Software System.
(h) Responsible for the supervision of the Human Resource Department.
(i) Responsible for the supervision of all general administrative
support personnel.
(j) Responsible for coordinating with Corporate Counsel on matters
within his purview.
(k) Responsible for coordinating with the CEO on banking and investor
relations matters.
(l) Responsible for assisting in the preparation of and participation
in all Board of Director's Meetings.
(m) Responsible for coordinating with the CEO on strategic
opportunities.
(n) Responsible for acting as Chair of corporate "War on Waste and Cost
Reduction Team".
(o) Responsible for coordinating a monthly meeting with Associates on
operating performance of the company and their facility.
(p) Responsible for assisting the CEO and Chairman of the Board in any
manner deemed appropriate.
2. Term of Employment. The term of this Agreement shall commence as of the
date hereof and shall continue until:
(a) the Company gives twelve (12) months written notice of its intent to
non-renew this contract or
(b) Employee gives thirty (30) days written notice of its intent to
non-renew this contract.
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 Twenty-Five Thousand Dollars ($125,000.00),
payable in equal semi-monthly installments. Employee shall also receive a
$25,000.00 signing bonus in lieu of moving expenses, as well as a $25,000.00
Guaranteed Bonus payable on December 1, 1997. In addition, Employee shall be
entitled to participate in the Dakotah Executive Discretionary Bonus Plan, as
well as Dakotah's Standard Employee Benefit Plan.
4. Employee Benefits.
(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 ("Option") to purchase 100,000 shares of the Company's common
stock ("Option Shares") pursuant to the Dakotah, Incorporated 1995 Stock Option
Plan. The Option shall have an exercise price equal to the fair market value of
such stock on the NASDAQ National Market System as of the close of such market
on April 8, 1997, which was $2.6875. The Option shall vest on the following
schedule:
(a) On and after the effective date of this Agreement, the Option may
be exercised for not in excess of twenty percent (20%) of the
shares originally subject to the Option;
(b) On or after January 1, 1998, the Option may be exercised for not in
excess of forty percent (40%) of the shares originally subject to
the Option;
(c) On or after January 1, 1999, the Option may be exercised for not in
excess of sixty percent (60%) of the shares originally subject to
the Option;
(d) On or after January 1, 2000, the Option may be exercised for not in
excess of eighty percent (80%) of the shares originally subject to
the Option;
(e) On and after January 1, 2001, the Option may be exercised at any
time and from time to time within its terms in whole or in part,
but it shall not be exercisable after the seventh anniversary of
the date hereof.
The remaining terms and provisions of the Option shall be governed by the
Dakotah, Incorporated 1995 Stock Option Plan and the Option actually issued.
6. Undertakings of Employee. Employee agrees that he shall use 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.
7. 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,
except for the Guaranteed Bonus, if any, and any earned but not
paid Base Salary amounts, 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 or other compensation provided for hereunder,
with the exception of any Guaranteed Bonus or earned, but unpaid
Base Salary.
(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 his annual Base Salary in
effect as of the date of termination, which payment may be made by
the Company in twenty-four (24) semi-monthly installments.
8. Confidentiality. Employee acknowledges that in the course of
employment, Employee will acquire confidential information of a special and
unique nature and value relating to Company's business. Such information shall
be considered a trade secret owned by Company, which information shall include,
but is not limited to, the names and addresses of customers and potential
customers, records concerning customer contacts and customer purchases, the
identity of customers' key employees, information concerning Company's systems,
policies, methods of operation, procedures, manuals, pricing, sales strategies,
sales methods, and all other non-public information acquired by Employee as a
result of or during the course of employment. Employee agrees that all such
information acquired during the course of employment, whether such information
is communicated in written or verbal form and whether such information is kept
in recorded or unrecorded form, constitute trade secrets of Company.
Employee agrees that Employee shall not at any time or in any manner,
either directly or indirectly, divulge or disclose Company's trade secrets to
any other person or entity. In addition, Employee agrees that Employee shall not
use such trade secrets in competition with Company or for the gain or benefit of
Employee or any other person or company. It is expressly agreed and understood
that the obligations of Employee under this paragraph shall survive the
termination of the Agreement.
Employee further agrees that, following termination of employment,
Employee shall not remove or retain any document, copy of document or any other
recording, in any type or form, relating to said trade secrets and, further,
Employee shall not utilize or divulge said trade secrets to any other person or
company, regardless of whether such knowledge or information is in recorded form
or otherwise.
9. Non-Compete. 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 7(a), Employee shall be
subject to the non-competition provision set forth in this Section 9 hereof,
while the Company continues to pay Employee his current salary in effect as of
the date of termination as provided in Section 7(e). In the event of a
termination for "cause," as defined in Section 7(a), Employee shall be subject
to the non-competition provision set forth in this Section 9 without any payment
of additional salary to Employee.
10. Injunctive Relief. The parties agree that monetary damages will not be
an adequate remedy in the event of any breach of Section 8 or Section 9 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 8 or Section 9 hereof.
11. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of South Dakota.
12. 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:
William Retterath
RR 1 Box 81 C
Webster, SD 57274
or to such other addresses as may be communicated in writing by either party to
the other.
13. 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.
14. 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.
15. Survival of Provisions. The provisions contained in Sections 8
and 9 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:
Printed Name:
Title:
WILLIAM RETTERATH, Employee
WILLIAM RETTERATH