BADGER PAPER XXXXX, INC.
XXXXXX XXXX EMPLOYMENT AGREEMENT
This Agreement is entered into on June 13, 2001 between BADGER PAPER
XXXXX, INC., a Wisconsin Corporation located at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxx ("Badger") and XXXXXX XXXX, an adult resident of Cincinnati, Ohio.
("Xxxx").
1. Engagement. Badger shall employ Xxxx as President and Chief Executive
Officer effective July 9, 2001. Xxxx accepts such employment in
accordance with the terms and conditions of this Agreement.
2. Duties. Xxxx shall be the President and Chief Executive Officer of
Badger and agrees to devote his full time, attention and best efforts
to the performance of this employment. Xxxx'x duties of employment
shall include such additional executive duties on behalf of Badger and
operations of a character keeping with Xxxx'x position as President
and Chief Executive Officer of the company as may from time to time by
designated by Badger's Board of Directors. As President and Chief
Executive Officer of Badger, Xxxx shall be in charge of the operations
of the company and shall have full authority and responsibility,
subject to the general direction and control of the Board of
Directors, for formulating Badger's polices and administering its
affairs in all respects, subject to the provisions contained in this
Agreement.
3. Term of Employment. Xxxx'x employment shall commence on July 1, 2001
and continue for a term of three (3) years, until June 30, 2004.
Xxxx'x employment shall be automatically renewed for a period of two
(2) years (until June 30, 2006) unless either party gives written
notice of non-renewal to the other at least six (6) months prior to
the end of the initial three (3) year term (written notice of non-
renewal provided no later than December 31, 2003). (These dates
presume a July 1, 2001 employment start date)
4. Compensation.
X. Xxxx shall be paid annual base compensation of $250,000.00. Xxxx
shall be eligible to receive bonus compensation calculated as a
percentage of Pretax Income as described below. "Pretax Income"
shall be the net income shown on Badger's books determined in
accordance with generally accepted accounting principles and
practices utilized by Badger's independent public accountant or,
such other firm of independent public accountants as may be
determined from time to time. Pretax income shall be calculated
before payment of federal and state income taxes and before
allowance for the bonus payment calculated pursuant to this
Agreement.
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X. Xxxx shall be paid, as bonus compensation, the following amounts:
Bonus Payment Pretax Income
3% of $0.00 - 1,000,000.00
+ 5% of $1,000,001.00 - $3,000,000.00
+ 6% of $3,000,001.00 and over
For example, if Badger has $5,000,000.00 of Pretax Income in a year, Xxxx'x
bonus shall be $250,000.00 (3% yields $30,000, 5% yields $100,000, 6% yields
$120,000.00 = $250,000.00 bonus).
The bonus shall be calculated and paid on the basis of audited results.
Historically, audited results for a calendar year are available by March 31 of
the following year.
For calendar year 2001, Xxxx is guaranteed a bonus of no less than $25,000,
calculated on the basis of annual bonus of $50,000 for Badger performance in
2001. If the bonus calculation for 2001 exceeds $50,000, Xxxx shall be paid 50%
of the bonus amount exceeding $50,000 for 2001. For calendar year 2002, Xxxx'x
bonus shall be calculated pursuant to the formula set forth above; provided,
however, that Xxxx'x 2002 bonus shall be guaranteed to be not less than $50,000.
5. Benefits. Xxxx shall also receive the following benefits:
A. Participation in Badger's comprehensive medical and dental
insurance plan. The terms and conditions of the plan shall
be provided under separate cover.
B. Participation in Badger's profit sharing and 401(k) plan.
The terms and conditions of the plan shall be provided under
separate cover.
C. Participation in a Qualified Stock Option Plan for Badger
stock. The plan shall xxxxx Xxxx an option to purchase up to
one hundred thousand (100,000) shares of Badger stock at a
price equivalent to the averaged bid and ask price for the
five trading days immediately prior to July 1, 2001. This
option to purchase Badger shares shall vest 50% upon the
third anniversary of Xxxx'x employment with Badger (July 1,
2004) and 50% upon the fifth anniversary of Xxxx'x
employment with Badger, (July 1, 2006.) Xxxx may exercise
this option at any time within five (5) years of the final
vesting date; no later than June 30, 2011. (The valuation
date, vesting dates, and exercise deadline presume a July 1,
2001 employment start date)
D. Two and one-half weeks of paid vacation in 2001. Five weeks
of paid vacation each calendar year thereafter. Paid holiday
vacation pursuant to Badger policy.
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E. Subject to underwriting requirements, Xxxx shall be provided
life insurance pursuant to Badger's group Term life
insurance plan in an amount equivalent to two times Xxxx'x
base salary ($500,000.00).
F. Short term and long term disability insurance. The terms and
conditions of the coverage shall be provided under separate
cover.
G. Car allowance of $800 per month.
H. Reimbursement for relocation expenses from Cincinnati, Ohio
to Wisconsin, up to an amount of $25,000. Badger will
reimburse Xxxx for the following, which may be taxable to
him:
(i) Reasonable expenses incurred in moving furniture,
normal household goods and personal belongings.
(ii) Reasonable expenses while house hunting, including
trips to the Peshtigo, Wisconsin area with spouse.
(iii) Reasonable temporary living expenses incurred in
Wisconsin while awaiting occupancy of a primary
residence.
(iv) Reasonable meal expenses.
6. Termination of Employment.
A. At any time during Xxxx'x employment, either party may
terminate his employment by providing 30 days written
notice.
X. Xxxxxx may terminate Xxxx'x employment without notice for
cause, defined as:
(i) Xxxx'x conviction or guilty plea to an offense
involving fraud, embezzlement, theft, dishonesty or
other criminal misconduct against Badger;
(ii) Xxxx'x willful, wanton or grossly negligent misconduct
in the course of his employment;
(iii) Xxxx'x substantial and material breach of the
Agreement.
If Badger terminates Xxxx for cause, Xxxx shall not be entitled
to any severance pay.
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C. If Badger terminates Xxxx without cause, Xxxx shall be
entitled to severance pay equivalent to 12 months base
salary as of the date of termination, payable in twelve (12)
equal monthly installments. If Xxxx is terminated as a
result of a change of control of Badger, defined as a sale,
merger, transfer or exchange of fifty percent (50%) of the
Badger's stock and/or assets, Xxxx shall be entitled to
severance pay equivalent to 12 months base salary as of the
date of termination. If Xxxx'x employment with Badger, or
its successor, continues after a change of control at a base
compensation less than his base compensation pursuant to
this Agreement, Badger shall pay Xxxx the difference between
his base compensation pursuant to this Agreement, and his
compensation for employment with Badger or its successor
following the change of control for a period of twelve (12)
months, payable in equal monthly installments.
7. Trade Secrets and Confidential Information. During the term of
this Agreement, Xxxx may have access to, and become familiar
with, various trade secrets and confidential information
belonging to Badger including, but not limited to, research and
development, product formulae and processes, sales methods,
pricing and costs, customer lists, marketing plans and
information, and strategic business plans. Xxxx acknowledges that
such confidential information and trade secrets are owned and
shall be continued to be owned solely by Badger. During the term
of his employment and for three (3) years after employment
terminates for any reason, regardless of whether termination is
initiated by Xxxx or Xxxxxx, Xxxx agrees not to use, communicate,
reveal or otherwise make available such information for any
purpose whatsoever, or to divulge such information to any person,
partnership, corporation or entity other than Badger or persons
expressly designated by Badger, unless compelled to disclose by
valid judicial process. Upon termination of Xxxx'x employment,
for any reason whatsoever, Xxxx shall return to Badger all
originals and copies of Badger's books, records, documents,
customer lists or other documents, in his possession.
8. Restrictive Covenant.
A. For a period of two (2) years after this Agreement has been
terminated for any reason, regardless of whether termination
is initiated by Xxxx or Xxxxxx, or for a period of time
equal to the length Xxxx'x employment if such tenure is less
than two (2) years, Xxxx will not, directly or indirectly,
solicit any person, company, firm or corporation who is or
was a customer at Badger during a period of three (3) years
prior to the termination of Xxxx'x employment and who is or
was one of Badger's top fifteen (15) customers by dollar
volume as measured over a calendar year period. Xxxx agrees
not to solicit such customers on behalf of himself or any
other person, firm, company or corporation.
B. If the scope or enforceability of any provision of this
Restrictive Covenant is disputed at any time, a court or
other trier of fact may modify and
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enforce the Covenant to the extent that it believes the
Covenant is reasonable under circumstances existing at that
time.
X. Xxxx acknowledges that compliance with sections 7 and 9 is
necessary to protect Badger's business and good will and
breach of these sections will irreparably and continually
damage Badger. Further, an award of money damages will not
be adequate to remedy such harm. Consequently, in the event
of Xxxx'x breach of any of these covenants, Badger shall be
entitled to both a preliminary or permanent injunction in
order to prevent continuation of such harm; and money
damages to include, without limitation, all reasonable costs
and attorneys' fees incurred by Badger and enforcing the
provisions of this agreement. The foregoing shall not
prohibit employer from electing and pursuing any other
remedy. If Xxxx violates sections 7 or 9, Badger shall be
entitle to recover, as a portion of its damages, but not as
a full measure of damages, any and all severance payments
made to Xxxx under this Agreement whether already paid, or
owing.
10. Assignment. Neither party shall have the right to assign any
rights or obligations under this Agreement without the prior
written approval of the other party.
11. Severability. If any provision of Agreement is adjudged by any
court to void or unenforceable in whole or in part, the
adjudication shall not effect the validity of the remainder of
the Agreement.
12. Applicability. This Agreement shall be binding upon, and shall
inure to the benefit of the parties and respective successors,
heirs, assigns, executors, administrators and personal
representatives.
13. Notice. Any notice to be given to a party shall be in writing,
deposited in the U.S. Mail, first class postage pre-paid,
addressed to Badger at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxx
00000 and to Xxxx at such address as he shall designate from time
to time.
14. Complete Understanding. This Agreement constitutes the complete
and entire understanding between the parties, all prior
representations or agreements having been merged into this
Agreement.
15. Modification. No alteration of or modification to any of the
provisions of this Agreement shall be valid unless made in
writing and signed by both parties.
16. Governing Law. This Agreement shall be subject to and governed by
the laws of the State of Wisconsin. Furthermore, any dispute
between the parties arising from this Agreement or the parties
business relationship shall be venued in the State of Wisconsin.
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IN WITNESS WHEREAS, the parties have executed this Agreement on the date
set forth above.
BADGER PAPER XXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Director
By: /s/ Xxxxxx X. Xxxx
-----------------------------
Xxxxxx Xxxx
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