EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into in Chanhassen,
Minnesota this 1st day of January, 1999 (the "Effective Date"), by and between
XXXXXX XXXXXX ("Xxxxxx") and EMPAK, INC., a Minnesota corporation ("Empak").
Recitals
WHEREAS, Xxxxxx has served in various capacities on behalf of Empak and, in
connection therewith, has made invaluable contributions to Empak's continued
success; and
WHEREAS, Xxxxxx is currently employed by Empak as its Chief Executive
Officer and serves as the chairman of the Board of Directors; and
WHEREAS, Empak desires to retain the services of Xxxxxx through December
31, 2002; and
WHEREAS, Empak desires to assure the full time services of Xxxxxx for a
minimum of six months from the Effective Date and to induce Xxxxxx to extend the
period of full time service beyond six (6) months from the Effective Date; and
WHEREAS, Xxxxxx wishes to be assured that his family will be entitled to a
minimum period of continued compensation in the event of his death; and
WHEREAS, it is in the best interests of Empak and Xxxxxx to enter into a
contract of employment under the terms and conditions stated hereunder.
Agreement
NOW, THEREFORE, in consideration of the mutual promises hereinafter
contained, it is hereby agreed:
1) Employment - Empak agrees that it shall employ Xxxxxx to provide such
time, energy and attention as may be reasonably required under the terms of this
Agreement to perform those duties as may be assigned to him from time to time by
the Board of Directors of Empak. Xxxxxx hereby accepts employment upon the terms
and conditions hereinafter set forth. In performance of his duties hereunder,
Xxxxxx agrees to comply with such reasonable rules, regulations and policies,
consistent with Xxxxxx'x obligations, as Empak may from time to time adopt.
2) Term - Empak agrees that, beginning on the Effective Date, it shall
employ Xxxxxx for a forty-eight (48) month term ending on December 31, 2002,
unless this Agreement is terminated earlier as
provided in Section 8 herein (the "Term"). During the first six (6) month period
of this Agreement, Xxxxxx shall be employed on a full time basis devoting
substantially all of his time and effort to the interests of Empak. Thereafter,
subject to Xxxxxx'x election to exercise his right to extend full time
employment under Section 3 (c) beyond the first six (6) months, Xxxxxx shall be
available on an as needed/part time basis to a maximum of seventy (70) hours per
month to render such services as may be directed, from time to time, by the
Board of Directors of Empak.
3) Consideration -
(a) Signing Bonus - As consideration for entering into this Agreement,
Xxxxxx shall receive a one-time bonus equal to Seventy-five Thousand
Dollars ($75,000) ("Signing Bonus").
(b) Salary - Subject to the provisions of Section 8 hereof, Empak
agrees to pay Xxxxxx the sum of Two Hundred Fifty Thousand Dollars
($250,000) per annum during the first two (2) years. Beginning on January
1, 2001 and for the remainder of the term, Empak agrees to pay Xxxxxx the
sum of One Hundred Twenty-five Thousand Dollars ($125,000) per annum. The
salary consideration specified herein is payable without regard to whether
Xxxxxx elects to extend his period of full time service beyond the first
six (6) months. Xxxxxx shall be paid in accordance with Empak's general
payroll practices for executive employees.
(c) Extension of Full Time Service - In consideration for exercising
his right to extend the period of full time service beyond the first six
(6) months after the Effective Date, Xxxxxx shall receive extension
bonus(es) according to the following schedule:
(1) First Optional Period - In consideration for extending the period
of full time employment from July 1, 1999 to December 31, 1999,
Xxxxxx shall receive an extension bonus equal to Fifty Thousand
Dollars ($50,000) ("First Extension Bonus").
(2) Second Optional Period - In consideration for extending the
period of full - time employment from January 1, 2000 to June 30,
2000, Xxxxxx shall receive an Extension Bonus equal to Fifty
Thousand Dollars ($50,000) ("Second Extension Bonus").
Upon exercising his rights to extend the period of full time service under
Subsection 3(c), Xxxxxx shall become obligated to devote substantially all of
his time and effort to the interests of Empak for the remainder of the
respective Optional Period.
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4) Salary Continuation in the Event of Death -
In the event of Xxxxxx'x death during the first two years of this
Agreement, Empak shall provide a death benefit to Xxxxxx'x heirs, executors or
administrators equal to the gross amount of two (2) years' compensation.
5) Other Benefits -
(a) Expenses - During the Term of this Agreement, Empak shall
reimburse Xxxxxx for all reasonable expenses incurred on behalf of Empak
upon presentation of adequate documentation. Reimbursement shall coincide
with payment of Xxxxxx'x compensation.
(b) Vacation - During the Term of this Agreement, Xxxxxx shall be
entitled to annual vacation without reduction in salary commensurate with
Empak's executive compensation guidelines.
(c) Fringe Benefits - During the Term of this Agreement and subject to
the provisions of Section 8 herein, Xxxxxx shall be entitled to participate
in fringe benefit programs provided by Empak for its employees. Empak shall
be under no contractual obligation to maintain and continue any fringe
benefit programs once established. Fringe benefits may include, but shall
not be limited to, pension and/or profit sharing plans, health, disability
and group life insurance programs.
(d) Automobile - During the Term of this Agreement, Xxxxxx shall be
entitled to the full time use of a company car similar in kind and quality
to the BMW 740 currently assigned and in use. Xxxxxx'x use of a company car
shall be subject to Empak's Auto Allowance Guideline, as amended from time
to time. In the event of Xxxxxx'x death, Disability or upon termination of
this Agreement, the company car then in use and assigned to Xxxxxx at the
time of such event shall be transferred and assigned, for no consideration,
to Xxxxxx or his heirs or executors as they may direct.
6) Duty Not to Disclose - Xxxxxx shall not, during the Term of this
Agreement or after employment with Empak, disclose to any other person, firm or
corporation or in any way use for his benefit, or to the detriment of Empak, any
information or knowledge obtained during the course of his employment with
Empak, except as required in the conduct of Empak's business or as authorized in
writing by Empak. Xxxxxx shall not, either during the Term of this Agreement or
after termination of his employment, disturb, hire, entice or in any other way
persuade or attempt to persuade any employee, dealer, supplier, customer or
subcontractor of Empak to discontinue his, her or its relationship with Empak.
7) Property of Empak - All memoranda, notes, records, papers and other
documents and all copies thereof relating to Empak's operation of its business
and all objects related thereto shall remain the property of Empak including,
but not limited to, those developed, investigated or considered by Empak. Xxxxxx
shall not copy or duplicate any of the aforementioned documents or objects nor
use any information
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confirmed therewith, except for Empak's benefit, either during the Term of this
Agreement or after his employment.
8) Termination - In addition to the expiration of the Term specified in
Section 3, this Agreement shall terminate:
(a) If Xxxxxx resigns from Empak, such termination shall be effective
thirty (30) days after written notice is provided to Empak; or
(b) Effective immediately upon notice by Empak, if any of the
following occurs:
(i) Xxxxxx'x theft of Company property or Xxxxxx'x dishonesty;
(ii) Xxxxxx'x material violation of Empak's rules, regulations or
policies;
(iii) Xxxxxx'x commission of a crime or other act which would
materially damage the reputation of Empak; or
(iv) Xxxxxx'x material violation of this Agreement.
Upon termination of Xxxxxx'x employment under this Section 8: (i) Xxxxxx
shall be entitled to receive all compensation earned under this Agreement to the
date of termination, and thereafter Xxxxxx shall have no right to receive any
compensation hereunder; and (ii) Xxxxxx shall surrender to Empak the automobile
referenced in Section 5.
9) Xxxxxx'x Obligations Upon Termination - Upon termination of this
Agreement for cause or otherwise, Xxxxxx shall immediately:
(a) Discontinue the servicing of any of Empak's customers, and the use
of any property, facilities and services provided by Empak;
(b) Discontinue the use of any and all customer lists or contacts,
unless a written agreement thereon provides otherwise;
(c) Return to Empak equipment, lists and other documents, and property
of Empak; and
(d) Discontinue further representation of himself as an agent,
employee or other personin connection with Empak.
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10) Assignment - This Agreement shall be personal to Xxxxxx and shall not
be assignable by him. Empak may transfer or assign this Agreement or any of it
rights or obligations hereunder with or without notice to Xxxxxx.
11) Law Governing - This Agreement shall be construed and governed in
accordance with the substantive laws (but not the laws of conflict) of the State
of Minnesota.
12) Arbitration - Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by binding arbitration,
to be conducted in Minneapolis, Minnesota before a single arbitrator,
administered by the American Arbitration Association under its Commercial
Arbitration Rules, and judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.
13) Entire Agreement - This Agreement contains the entire agreement between
the parties related to the subject matter hereof and no amendments hereto shall
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 Xxxxxx and Empak. This Agreement supersedes and nullifies
any preexisting agreements or arrangements between the parties relating to the
subject matter of this Agreement.
14) Severable - In the event any portion of this Agreement shall be held to
be invalid, the same shall not affect in any respect whatsoever the validity of
the remainder of this Agreement.
15) Captions - Article, paragraph or section titles or other headings
contained in this Agreement are for convenience only and shall not be deemed a
part of the context of this Agreement.
16) Binding Effect - This Agreement shall be binding upon and inure to the
benefit of all of the parties hereto, their heirs, executors, administrators,
permitted assigns and successors in interest.
17) Notices - Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by registered or certified
mail to Xxxxxx'x residence or to the principal office of Empak, whichever shall
be applicable.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
Empak, Inc.
By: /s/ Xxxxxx Xxxxxx
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Its: Director Xxxxxx Xxxxxx
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