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Exhibit 5
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is effective as of March 31, 1997, by and between Xxxxxx X.
Xxxxx (the Employee) and Ultra Pac. Inc., a Minnesota corporation (the
Company);
RECITALS
WHEREAS, the Company is in the business of manufacturing and
distributing thermal formed plastic packaging; and
WHEREAS, the Company has employed the Employee and desires to continue to
employ the services of the Employee, and the Employee is willing to enter into
this Agreement as set forth herein upon receipt of the consideration set forth
herein.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, it is hereby agreed:
1.) Definitions - For purposes of this Agreement, the following words
shall have the indicated meanings hereinafter set forth:
(a) The "Business" means all business developed by the Company before or
during the term of this Agreement.
(b) The "Company" means the Company and any existing or future affiliates,
including parent, subsidiaries, divisions, joint ventures, and
partnerships.
(c) "Confidential Information" means any information or compilation of
information possessed by the Company that derives independent economic
value, actual or potential, from not being generally known too, and not
being readily ascertainable by proper means by other persons who can
obtain economic value from its disclosure or use, including but not
limited to: (a) any information not generally known in the industry of the
Business regarding the Company's products, pricing of products, research,
development, marketing, servicing, business systems, and techniques; (b)
financial information concerning the Business and customers of the
Company, including, but not limited to, information concerning accounts
receivable of the customers of the Company; (c) quantity and type of
products and services purchased by customers from the Company, and (d) any
information that the Company may from time designate as "confidential,"
"proprietary," or "trade secrets" which is not generally known in the
industry of the Business.
(d) "Competing Business" means any company, person, entity, or
organization other than the Company engaged in or about to become engaged
in the developing, marketing, manufacturing, selling of any product, good,
or service which is an alternative to or which is marketed in direct
competition with any product, good, or service of the Company.
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(e) "Product" means collectively the products and services sold by the
Company to its customers.
(f) "Inventions" means discoveries, improvements, and ideas (whether or
not shown or described in writing or reduced to practice) and works of
authorship, whether or not patentable or copyrightable:
(1) Which relate directly to the Company's business;
(2) Which relate to the Company's actual or demonstrably anticipated
research or development;
(3) Which result from any work performed by the Employee for the
Company;
(4) For which equipment, supplies, facility, or trade secret
information of the Company are used; or
(5) Which is developed on any Company time.
2.) Employment - The Company hereby retains the Employee to provide such
services on behalf of the Company as the Company's COO and CEO/President may
from time to time specify. The Employee hereby accepts employment with the
Company to provide said services upon the terms and conditions hereinafter set
forth. In performance of the services hereunder, the Employee agrees to comply
with such rules, regulations, instructions, and policies, as the Company may
from time to time adopt.
3.) Term - The Company hereby retains the Employee for a term of eighteen
(18) months, beginning on March 1, 1997, and ending on August 31, 1998, unless
terminated earlier as provided by Section 11 of this Agreement. After the
initial 18 month term, this Agreement will continue month to month thereafter
until terminated by either the Company or Employee on 30 days written notice.
Notwithstanding any termination of this Agreement, the Employee's duties
regarding confidentiality and his covenant not to compete as set forth herein
will survive.
4.) Compensation - Subject to the provisions of Section 11 herein, the
Company agrees to pay, and the Employee agrees to accept for his services
rendered hereunder the following:
(a) Salary - A gross salary of $25,000 per year, which amount shall be
inclusive of all Company contributions on behalf of Employee to employee
benefit plans maintained by the Company (other than any Company
contributions attributable the Employee's pre-tax salary reduction
contributions). The Employee's salary net of Company contributions to
employee benefit plans shall be paid weekly or at such other times as may
be agreed to by the Company and Employee. Any increase in the Employee's
salary will be determined by the Company's President and/or Board of
Directors in his/their sole discretion.
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(b) Benefits - The Employee shall be eligible to continue participating
under the Company's employee benefit plans in accordance with the terms
of such plans. Without limiting the generality of the above statement,
Employee and his currently-covered dependents shall, for the term of this
Agreement, specifically be eligible to continue participating under the
Company's medical benefit plan as it shall from time to time exist.
5.) Stock Options - The Employee may be granted the right to purchase
certain shares of the Company's stock pursuant to the Company's Stock Option
Plan and as determined by the Company's Board of Directors.
6.) Vacation - The Employee will be entitled to vacation each year in
accordance with the Company's vacation policy, during which time his
compensation as set forth herein will be paid in full.
7.) Inventions - With respect to Inventions made, authored, or conceived
by the Employee, either solely or jointly with others, during the Employee's
employment, whether or not during normal working hours or whether or not on
the Company's premises, the Employee shall:
(a) Keep accurate, complete, and timely records of such Inventions, which
records will be the Company's property and be retained on the Company's
premises.
(b) Promptly and fully disclose and describe such Inventions in writing to
the Company.
(c) Assign (and Employee does hereby assign) to the Company all of his
rights to such Inventions and to applications for letters, patents,
and/or copyrights in all countries and to letters, patents, and/or
copyrights granted upon such Inventions in all countries.
(d) Acknowledge and deliver promptly to the Company (without charge to
the Company but at the Company's expense) such written instruments and
to do such other acts as may be necessary in the Company's opinion to
preserve property rights against forfeiture, abandonment or loss and to
obtain and maintain letters, patents, and/or copyrights and to vest the
entire right and title thereto in the Company.
8.) Confidentiality - The Employee may have access to Confidential
Information which the Company desires to protect at all times. Therefore:
(a) The Employee understands, acknowledges, and agrees that:
(1) Confidential Information includes all types of information
described in Section 1 (c) at the outset of this Agreement;
(2) The Employee's duties may involve the use of the Confidential
Information;
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(3) The Company has expended substantial sums of money, time, and effort
in developing such Confidential Information; and
(4) The Company will be substantially harmed in the competitive marketplace
if the Confidential Information is used to its detriment or to the
benefit of others.
(b) In recognition of the foregoing, the Employee agrees that:
(1) The Employee will not during or after employment with the Company,
directly or indirectly use or disclose any Confidential Information
to any other person, firm or company, or in any way use for his
benefit, or to the detriment of the Company, any information or
knowledge obtained during the course of his employment with the
Company, except as required in the conduct of the Company's business
or as authorized in writing by the Company; and
(2) All memoranda, notes, records, papers, and other documents and all
copies thereof relating to the Company's operation of Business and
all objects related thereto are and remain the property of the
Company; including, but not limited to, those developed,
investigated, or considered by the Company. The Employee will not
copy or duplicate any of the aforementioned documents or objects nor
use any information contained therewith, except for the Company's
benefit, either during or after his employment.
9.) Termination - In addition to the expiration of the term specified in
Section 3 herein,
(1) This Agreement will immediately terminate:
a. Upon five (5) days' notice time notice if the Employee resigns
from the Company.
b. Immediately if the Employee dies.
(b) Immediately, upon notice from the Company, if any one of the following
occurs as determined in the sole discretion of the Company's President and/or
Board of Directors:
(1) The Employee's theft of the Company's property or the Employee's
dishonesty;
(2) The Employee's material violation of the Company's rules, regulations,
instructions or policies;
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(3) The Company is dissolved, liquidated, merged, consolidated,
adjudicated bankrupt, or substantially all of its assets are sold;
or
(4) The Employee's commission of a crime or other act which would
materially damage the reputation of the Company.
(c) If the Employee becomes incapacitated, mentally or physically, to the
extent that a certified medical doctor with a specialty in the type of
disability, certifies the Employee is unable to perform his duties under
this Agreement.
(d) Upon termination of this Agreement for any reason, the Employee will
immediately:
(1) Discontinue servicing any customers of the Company, and the use of
any property, facilities, and services provided by the Company;
(2) Discontinue the use of any and all programs, client lists, records,
or contacts, unless a written agreement thereon provides otherwise;
(3) Return to the Company equipment, lists, documents, and all other
property of the Company; and
(4) Discontinue further representation of himself as agent, employee,
or other person connected with the Company.
10.) Covenant Not to Compete - The parties agree that the Company would be
substantially harmed if the Employee competes with the Company during
employment with the Company or after termination of employment with the
Company. Therefore, in exchange for benefits provided to the Employee
hereunder, the Employee agrees that during his employment with the Company and
for a period of one year after termination of such employment for any reason,
the Employee will not directly or indirectly, without the written consent of
the Company:
(a) Render services to or for any person, firm, or corporation or other
organization for compensation or profit, or engage in any activity that
competes with the interest of the Company or in any way assists any
Competing Business in the State of Minnesota and such other states where
the Company may establish customers or potential customers during the term
of this Agreement; provided, however, that ownership of stock or other
securities in a publicly held corporation, for which the Employee's sole
purpose is that of an investor, is not prohibited;
(b) Hire, offer to hire, entice away, or in any other way persuade or
attempt to persuade any employee, officer, agent, independent contractor,
supplier, customer, or subcontractor of the Company to discontinue their
relationship with the Company; and
(c) Vilify, criticize, or otherwise slander or defame the business or
business practices of the Company or its officers, directors, or employees.
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11.) Consideration - The Employee acknowledges and agrees that beyond his
continued employment with the Company, the Employee has been offered and has
voluntarily accepted the following consideration for his agreements specified
herein:
(a) Compensation payable in such amount as set forth in Section 4;
(b) Access to new Confidential Information as set forth in the provisions
of this Agreement;
12.) Remedy - The Employee understands that the Company may not have an
adequate remedy at law for the threatened breach or breach of any covenant set
forth in this Agreement, and agrees that in the event of any breach thereof the
Employee shall reimburse the Company for its reasonable attorneys' fees and
costs incurred in enforcing its rights under this Agreement; and further agrees
that in the event of a breach or a threatened breach, in addition to other
remedies which may be available to it, the Company has the right to xxx in
equity and enjoin the Employee for a breach or threatened breach of this
Agreement.
13.) Assignment - The Employee may not transfer or assign this Agreement
or any of the Employee's rights or obligations hereunder.
14.) Binding Effect - This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their heirs, executors, administrators,
successors, and legal representatives.
15.) Gender Clause - All pronouns and any variations thereof shall be
deemed to refer to the masculine or feminine as the identity of the person may
require.
16.) Law Governing - This Agreement will be construed and governed in
accordance with the laws of the State of Minnesota.
17.) Jurisdiction/Venue - The Company and the Employee consent to
jurisdiction of the courts of the State of Minnesota and/or the Federal
District Courts, Fourth Division, State of Minnesota, for the purpose of
resolving all issues of law, equity, or fact arising out of or in connection
with this Agreement or any other instrument or document executed or delivered
in connection herewith and that venue, for the purpose of all such suits, shall
be in Hennepin County, State of Minnesota.
18.) Entire Agreement - This Agreement contains the entire agreement
between the parties and no amendments or additions or deletions will be valid
unless made in writing and signed by the parties hereto. There is merged
herewith all prior and collateral representations, promises, and conditions
concerning the Employee and the Company. This Agreement replaces, supersedes,
and nullifies all prior agreements or arrangements between the parties relating
to the subject matter of this Agreement.
19.) Severable - In the event any portion of this Agreement is found to
be invalid or unenforceable by any court of competent jurisdiction, the same
will not affect in any respect whatsoever the validity of the remainder of this
Agreement.
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20.) Captions - Article, paragraph, or section titles or other headings
contained in this Agreement are for convenience only and will not be deemed a
part of the context of this Agreement.
21.) Notices - Any notice required or permitted to be given under this
Agreement will be sufficient if in writing and sent by registered or certified
mail, in the case of the Employee, to the residence of the Employee as set
forth in the employment records of the Company, or in the case of the Company,
to the principal office of the Company, whichever will be applicable.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the day and year first above written.
THE COMPANY: THE EMPLOYEE:
Ultra Pac. Inc.
By: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxx
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Its: Chief Operating Officer Xxxxxx X. Xxxxx
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