EXHIBIT 1O.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT made effective the 30th day of January, 1998, is by and
between Industrial Rubber Products, Inc. a Minnesota corporation (the
"Company"), and Xxxxxx X. Xxxxxx, a resident of the State of Minnesota (the
"Executive").
WHEREAS, the Company is selling 1,400,000 shares of its stock pursuant
to an underwriting agreement with X. X. Xxxxxxxx Co. which sale of stock will
result in an immediate and substantial increase in the book value of the common
stock in the Company over two-thirds of which is held by the Executive.
WHEREAS, the parties wish to provide for the employment of the
Executive by the Company; and
WHEREAS, the Company desires reasonable protection of its confidential
business and technical information, which has been and will be acquired, and
which has been and is being developed by the Company, at substantial expense;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the Company and the Executive, each intending to be legally bound, agree
as follows:
1. EMPLOYMENT. Subject to all of the terms and conditions of this
Agreement, the Company agrees to employ the Executive on a full-time basis as
its President and Chief Executive Officer and the Executive accepts this
employment.
2. DUTIES. The Executive will make the best use of his energy,
knowledge and training in advancing the Company's interests. He will diligently
and conscientiously perform the duties of President and Chief Executive Officer
of the Company, as such duties may be defined by the Company's Board of
Directors and such other tasks as may from time to time be reasonably required
to further the growth of the Company.
3. TERM. The term of this contract shall be until January 30, 2000 (the
"Term"). Notwithstanding the foregoing, the Executive is employed on an at-will
basis. The Executive may terminate the employment relationship created by this
Agreement upon sixty (60) days notice to the Company, and with no notice is such
termination is for cause (as defined below). The Company may terminate the
employment relationship created by this Agreement upon sixty (60) days notice to
the Executive, if such termination is without Cause (as defined below), and with
no notice if such termination is for Cause.
As used in this Agreement, the term "Cause" as applied to the Company's
ability to terminate without notice means (i) the Executive's breach of any of
his material duties or obligations under this Agreement, which breach is not
corrected within thirty (30) days of receipt of written notice thereof by the
Executive; (ii) embezzlement or other misappropriation of property of the
Company; (iii) conviction of a felony offense; or (iv) the Executive's
persistent refusal to follow the directions or instructions of the Company's
Board of Directors. The term "Cause" as applied to the Executive's ability to
terminate without notice means any failure to pay or decrease in the Executive's
salary not consented to by the Executive. No termination
of the employment relationship created by this Agreement shall relieve the
Executive of his duties under Sections 5, 6 and 7 hereof.
4. COMPENSATION.
a. SALARY. The Executive will be entitled to a salary of
$22,916.67 per month payable bimonthly beginning February 1, 1998 and
effective retroactively to January 1, 1998. The Company's Board of
Directors may increase Executive's salary provided that if it has been
raised, the Company may at any time reduce the salary back to
$22,916.67 per month.
b. BENEFITS. The Executive shall be entitled to participate in
benefit plans and other fringe benefits which may be established by the
Company's Board of Directors' for similar executive level executives.
c. EXPENSES. The Company shall reimburse the Executive for all
ordinary and necessary business expenses the Executive incurs while
performing his duties under this Agreement, provided that the Executive
accounts properly for such expenses to the Company in accordance with
the general corporate policy of the Company as determined by the
Company's Board of Directors and in accordance with the requirements of
Internal Revenue Service regulations relating to substantiation of
expenses.
d. BONUSES. The Board of Directors may, but is not required
to, provide for a bonus or other incentive compensation plan.
5. INVENTIONS.
a. "INVENTIONS", as used in this Section 5, means any
discoveries, designs, improvements or software (whether or not they are
in writing or reduced to practice) or works of authorship (whether or
not they can be patented or copyrighted) that the Executive makes,
authors, or conceives (either alone or with others) and that:
i. concern directly the Company's products, research
or development;
or
ii. result from any work the Executive performs for
the Company; or
iii. use the Company's equipment, facilities, or
trade secret information.
b. The Executive agrees that all Inventions he makes during
his employment with the Company will be the sole and exclusive property
of the Company. The Executive will, with respect to any such Invention:
i. keep current, accurate, and complete records,
which will belong to the Company and be kept and stored on the
Company's premises while the Executive is employed by the
Company;
ii. promptly and fully disclose the existence and
describe the nature of the Invention to the Company in writing
(and without request);
iii. assign (and the Executive does hereby assign) to
the Company all of his rights to the Invention, any
applications he makes for patents or copyrights in any
country, and any patents or copyrights granted to him in any
country; and
iv. acknowledge and deliver promptly to the Company
any written instruments, and perform any other reasonable acts
necessary in the Company's opinion and at its expense to
preserve property rights in the Invention against forfeiture,
abandonment, or loss and to obtain and maintain letters patent
and/or copyrights on the Invention and to vest the entire
right and title to the Invention in the Company, provided
that, the Executive makes no warranty or representation to the
Company as to rights against third parties hereunder.
Executive acknowledges that since April 15, 1986, the
Executive has been developing technology for the Company all of which
he hereby transfers to the Company for the considerations stated.
Executive agrees that the existing technology, and all derivations,
expansions, improvements, and similar additions or modifications to the
technology whenever developed by him are and shall be the property of
the Company.
The Executive shall disclose to the Company from time to time all
inventions that Executive develops or conceives. The Company shall have
thereafter a reasonable period of time of not less than 90 days in
which to consider and evaluate the inventions and determine whether the
Company will develop the same. Except as disclosed to the Company in
writing on Exhibit A attached hereto, the Executive does not have and
will not assert any claims to or rights under any inventions as having
been made, conceived, authored, or acquired by the Executive prior to
this Agreement.
c. NOTICE: Minnesota law exempts from this Agreement "AN
INVENTION FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY OR TRADE SECRET
INFORMATION OF THE EMPLOYER WAS USED AND WHICH WAS DEVELOPED ENTIRELY
ON THE EMPLOYEE'S TIME, AND (1) WHICH DOES NOT RELATE (A) DIRECTLY TO
THE BUSINESS OF THE EMPLOYER OR (B) TO THE EMPLOYER'S ACTUAL OR
DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR (2) WHICH DOES NOT
RESULT FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER."
d. Upon termination of this Agreement, Executive agrees to
return to the Company all property of the Company which Executive has
custody and to deliver to the Company all notebooks and other data
relating to research, experiments or management studies conducted by
the Executive or any inventions made by the Executive.
6. CONFIDENTIAL INFORMATION.
a. "CONFIDENTIAL INFORMATION", as used in this Section 6,
means information that is not generally known and that is proprietary
to the Company or that the Company is obligated to treat as
proprietary. This information includes, without limitation:
i. trade secret information about the Company and its
products or services;
ii. "Inventions," as defined in subsection 5(a)
above;
iii. information concerning the Company's business,
as the Company has conducted it or as it may conduct it in the
future; and
iv. information concerning any of the Company's past,
current, or possible future products, including (without
limitation) information about the Company's research,
development, engineering, purchasing, manufacturing,
servicing, finances, marketing or selling.
v. information concerning any of the Company's past,
current or possible future customers, including (without
limitation) customer lists, information about the Company's
planned advertising campaigns, purchasing plans, methods of
operation, servicing, finances, marketing or sales efforts.
Any information that reasonably can be expected to be treated
as Confidential Information will be presumed to be Confidential
Information (whether the Executive or others originated it and
regardless of how he obtained it).
b. Except as required in his duties to the Company, the
Executive will not, during his employment or after termination of his
employment with the Company, use or disclose Confidential Information
to any person not authorized by the Company to receive it, excluding
Confidential Information (i) which becomes publicly available by a
source other than the Executive; or (ii) which is received by the
Executive after termination of his employment hereunder from a source
who did not obtain the information directly or indirectly from
Executives or agents of the Company; or (iii) for which disclosure
thereof the Company has consented in writing. When the Executive's
employment with the Company ends, he will promptly turn over to the
Company all records and any compositions, articles, devices, apparatus,
and other items that disclose, describe, or embody Confidential
Information, including all copies, reproductions, and specimens of the
Confidential Information in his possession, regardless of who prepared
them.
7. COMPETITIVE ACTIVITIES. Provided that:
(1) If this Agreement is terminated by the Company without
Cause, the Company has paid to the Executive the salary provided under
paragraph 4(a) above for the Term of the Agreement,
(2) If this Agreement is terminated by the Company for Cause,
or
(3) If the Executive terminates this Agreement without Cause,
the Executive agrees that during the Term of this Contract and for a
period of two years thereafter:
a. He will not alone, or in any capacity with another firm,
(i) directly or indirectly engage in the development, design,
production, marketing or sale of any product, technology or services
that is competitive with the Company's business as it exists at the
time his employment is terminated, nor will he participate in the
management or operation of, or become a significant investor in, any
venture or enterprise of whatever kind as a principal, officer,
director, Executive, representative, agent or shareholder of any entity
whose business is the design, development, production, marketing, or
servicing of any technology, product or service competitive with the
business of the Company as it exists at the time his employment with
the Company is terminated; (ii) in any way interfere or attempt to
interfere with the Company's relationships with any of their current or
potential customers; or (iii) employ or attempt to employ any of the
Company's executives on behalf of any other entity competing with the
Company. Provided that, nothing in this Section 7 shall restrict the
Executive's employment by or association with any entity, venture or
enterprise which engages in a business with a product or service that
is not competitive with any product or service of the Company, so long
as it does not, after Executive's employment, become competitive.
b. He will, prior to accepting employment with any new
employer, inform that employer of this Agreement and provide that
employer with a copy of Section 7 of this Agreement, provided that he
reasonably believes his new position is or may be contrary to this
Agreement.
8. CONFLICTING BUSINESS. The Executive agrees that he will not transact
business with the Company personally, or as agent, owner, partner, or
shareholder of any other entity, except as specifically approved by the
Company's Board of Directors. The Executive further agrees that during his
employment with the Company he will not engage in any business activity or
outside employment that may be in conflict with the Company's proprietary or
business interests.
9. NO ADEQUATE REMEDY. Both parties understand that failure to fulfill
the obligations under of this Agreement would cause damage to the other that
would be very difficult to determine. Therefore, in addition to any other rights
or remedies available to the parties at law, in equity or by statute, each party
consents to the specific enforcement of this Agreement, including specifically
Sections 5, 6, 7 or 8, through an injunction or restraining order issued by any
appropriate court.
10. MISCELLANEOUS.
a. Successors and Assigns. This Agreement may not be assigned
by the Executive. Except as provided in the next sentence, this
Agreement may not be assigned
by the Company without the Executive's consent, which consent shall not
be unreasonably withheld. In any event, the Company may assign this
Agreement without the consent of the Executive in connection with a
merger, consolidation, assignment, sale or other disposition of
substantially all of its assets or business.
b. Modification. This Agreement may be modified or amended
only by a writing signed by each of the parties hereto.
c. Governing Law. The laws of the State of Minnesota shall
govern the validity, construction, and performance of this Agreement.
d. Construction. Wherever possible, each provision of this
Agreement shall be interpreted so that it is valid under applicable
law. If any provision of this Agreement is to any extent invalid under
applicable law in any jurisdiction, that provision shall still be
effective to the extent it remains valid. The remainder of this
Agreement also shall continue to be valid, and the entire Agreement
shall continue to be valid in other jurisdictions.
e. Non-Waiver. No failure or delay by any of the parties
hereto in exercising any right or remedy under this Agreement shall
waive any provision of the Agreement. Nor shall any single or partial
exercise by any of the parties hereto of any right or remedy under this
Agreement preclude any of them from otherwise or further exercising
their rights or remedies, or any other rights or remedies granted by
any law or any related document.
f. Captions. The headings in this Agreement are for
convenience only and shall not affect the interpretation of this
Agreement.
g. Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and hand delivered
or sent by registered first-class mail, postage prepaid. Such notices
and other communication shall be effective upon receipt if hand
delivered and shall be effective five (5) business days after mailing
if sent by mail to the following addresses, or such other addresses as
either party shall have notified the other party:
If to the Company: Industrial Rubber Products, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
If to the Executive: Xxxxxx X. Xxxxxx
0000 0xx Xxxxxx X
Xxxxxxx, XX 00000
h. Representation. Executive has been represented by an
attorney and accountant with respect to Executive's entering into this
Agreement.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first above written.
EMPLOYER EXECUTIVE
Industrial Rubber Products, Inc.
By /s/ Xxxxxxxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxx
----------------------------------- ----------------------------------
Its Vice President Xxxxxx X. Xxxxxx
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EXHIBIT A
NONE
