Exhibit 10.7
EMPLOYMENT AGREEMENT
BY AND BETWEEN
MARCH MOTORS INTERNATIONAL, INC.
AND
XXXXXX X. XXXXXXXXX
THIS AGREEMENT entered into on January 1, 1998, is made by and between
March Motors International, Inc. (hereinafter referred to as "March") and Xxxxxx
X. Xxxxxxxxx (hereinafter referred to as "JFN").
WHEREAS, March and JFN have been parties to an oral agreement regarding
outstanding interest-free loans made to March by JFN which shall continue until
said time as March is able to repay JFN.
WHEREAS, March desires the services of JFN to assist March in its
operations as provided herein, and JFN has agreed to provide such services;
NOW, THEREFORE, March and JFN in consideration of the mutual promises
and covenants contained herein, agree as follows:
I. EMPLOYMENT
March agrees to employ JFN as its Chairman of the Board. JFN hereby
accepts such employment. JFN will serve March under the direction of its Board
of Directors. During the term of this Agreement, JFN agrees to devote his
business time, skill, energy, and attention to the services and businesses of
March and shall perform such services in a diligent, trustworthy, loyal, and
business-like manner, all for the purpose of advancing its business of March.
II. EXCLUSIVITY OF SERVICES
JFN will devote his best efforts to the performance of his duties
hereunder. JFN will not, without he written consent of the Board of Directors of
March, engage in any activity which conflicts or interferes with the performance
of his duties hereunder during the term of this Employment Agreement, except as
specified herein. JFN may continue to operate Insulation Distributors, Inc.
III. TERM
This Employment Agreement shall have a term of three years ("initial
term") beginning on January 1, 1998 and expiring on December 31, 2020. This
Employment Agreement will, after expiration of the initial term, automatically
extend for consecutive additional one year terms ("succeeding terms") absent
sixty (60) days of written notice from either party to the other, prior to the
expiration of either the initial term or any succeeding term, or the parties'
intent not to renew the Employment Agreement. Both the initial term in any
succeeding terms shall be subject to termination before expiration under Section
VII of this Agreement.
IV. COMPENSATION
In consideration of JFN's acceptance and continued employment and
performance of duties under this Employment Agreement, including but not limited
to the provisions of Sections V and VI, March shall pay to JFN the following:
(a) Salary - JFN shall be issued immediately 100,000 restricted
shares of the company's common stock as an inducement to enter
into the agreement and for all services and loans committed to
the company in 1997. JFN shall be paid a salary of $60,000.00
per year.
(b) Benefits - JFN shall, for each fiscal year this Employment
Agreement remains effective, be entitled to benefit plans on
the same terms as such benefits are generally available to
other senior executives of March, as well as any benefits
which are expressly granted to JFN by the Board of Directors
of March.
(c) Expense Reimbursement - March will pay or reimburse JFN for
all reasonable and necessary out-of-pocket expenses incurred
by him and the performance of his duties under this Employment
Agreement, subject to the presentation of appropriate vouchers
in accordance with March's normal policies for expense
verification, and in an amount not to exceed On Thousand
Dollars ($1,000.00) in any calendar month.
(d) Stock Option - For each year of employment, March will grant a
stock option to JFN in the amount of 100,000 shares at $6 per
share, effective January 1, 1998.
V. COVENANT NOT TO SOLICIT
In partial consideration of the compensation paid under this Employment
Agreement, including, but not limited to, the benefits outlined above, JFN
agrees that during the time of whether voluntary or involuntary, provided that
any involuntary termination is in compliance with this Employment Agreement, he
shall not, either personally or through an employer, firm, agent, servant,
employee, partner, shareholder, representative, affiliate or any other entity:
(a) Deliver products or services or attempt to deliver products or
services which are of the same type or nature as those which
JFN provided or offered during his employment under this
Employment Agreement, to any customer of March, except as
specifically provided herein, without prior written consent of
March. March's products and services shall be defined for
these purposes to include those products and services offered
by March during JFN's employment with March for a period of 12
months following the termination of JFN's employment with
March.
(b) Employ or offer to employ any individual employed by March
within the four (4) months proceeding the termination of JFN's
employment or request, advise, or entice any such individual
to leave the employment of March.
JFN further agrees that in the event he breaches any of the covenants
contained in Section V or VI of this Employment Agreement, irreparable harm will
result to March, that March's remedy at law will be inadequate, and that March
will be entitled to an injunction to restrain any continuing breach of this
Employment Agreement by JFN, his partners, agents, servants, employees, or
representatives, or any other persons or entities acting for or with him. March
shall, without limitation, be entitled to damages, reasonable attorneys' fees,
and any other costs and expenses incurred in connection with the enforcement of
Section V or VI of this Agreement, in addition to any other rights or remedies
which March may have at law or in equity.
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VI. NONDISCLOSURE OF INFORMATION
(A) JFN agrees that any information related to the
business of March, or of any March's clients or
customers, which is acquired by JFN during his
employment by March, shall be regarded as
confidential and solely for the proprietary benefit
of March. JFN shall not, except as is necessary in
the ordinary course of conducting business for March,
use such information for himself or disclose such
information to any other person or entity directly or
indirectly, either during the term of this Employment
Agreement, or any time thereafter, unless he obtains
the prior written approval of March.
(B) JFN shall not remove any records or documents from
the premises of March or March's clients or customers
in either original, duplicate, or copied form, except
as is necessary in the ordinary course of business
for March and subject to the approval of March's
management person with the authority to act upon such
matters. JFN shall immediately deliver to March, upon
termination of his employment with March, or at any
other time upon March's request, any such records or
documentation in JFN's possession or control.
VII. TERMINATION
(A) JFN's employment shall be terminated under any of the
following circumstances:
(1) By the mutual agreement of JFN and March;
(2) Upon the death of JFN; or
(3) Upon the voluntary termination of this Agreement
by March or JFN.
(B) In the event that JFN's employment is terminated
under paragraph VII, JFN's entitlement to
compensation under Section VI of this Agreement shall
be immediately cease.
VIII. CONSENT TO VENUE AND JURISDICTION
JFN and March consent to venue and jurisdiction in the District Court
of Hennepin, State of Minnesota, and in the United States District Court for the
district of Minnesota, and to service of process under Minnesota law in any
action commenced to enforce this Employment Agreement.
IX. ENTIRE AGREEMENT
This Employment Agreement constitutes the entire agreement between the
parties, and may not be amended or modified except by the mutual written
agreement of JFN and March. This agreement supersedes any previous employment
agreement, written or oral, that the parties may have entered into.
X. GOVERNING LAW
This Employment Agreement shall be construed and governed by the laws
of the State of Minnesota.
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XI. SEVERABILITY
If any provision of this Employment Agreement shall, for any reason, be
adjudged to be void, invalid, or unenforceable by a court of law, the remaining
provisions of this Employment Agreement shall nonetheless continue and remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement.
March Motors International, Inc.
Dated: 6th January 1998 By: /s/ Xxxxxx XxxXxxxxxx
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Its: Director
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/s/ Xxxxxx Xxxxxxxxx
Dated: 12-16-97 -----------------------------------------
Xxxxxx X. Xxxxxxxxx
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AMENDMENT OF EMPLOYMENT AGREEMENT
WHEREAS, the undersigned is currently serving under an employment agreement for
1998 with March Motors International, Inc., a Minnesota corporation, whereby he
is being paid a salary of $60,000 for his service in 1998.
NOW THEREFORE, FOR VALUABLE CONSIDERATION, the undersigned hereby agrees to the
following:
1. The undersigned will defer all his compensation under such
employment contract until the Company completes its pending Initial
Public Offering (IPO), raising net proceeds to March of
$4,000,000.00 or more at which time the undersigned will receive
all deferred 1998 compensation from the proceeds of such IPO.
2. The undersigned agrees that the consideration he has received for
this deferral of compensation is the closing of the purchase of
Norton assets by the Company.
3. This deferral of compensation shall cover all payments from January
1, 1998 forward. Xxxxxx Xxxxxxxxx may at any time convert the
amount deferred as above provided to common shares of March at the
rate of $3.00 of deferred compensation per common share.
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
This Second Amendment of the Employment Agreement is made as of the 1st
day of June, 1998, by and among Norton Motors International Inc. (the "Company")
and Xxxxxx X. Xxxxxxxxx ("JFN").
RECITALS
WHEREAS, the Company and JFN are parties to an Employment Agreement
dated as of January 1, 1998, as amended by an Amendment to Employment Agreement,
the terms of which are incorporated herein by reference (the "Employment
Agreement"). Any terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Employment Agreement.
WHEREAS, the Company and JFN desire to amend the Employment Agreement
as set forth herein.
NOW, THEREFORE, the parties, intending to be legally bound, hereby
agree as follows:
1. The first sentence of Article I shall be deleted in its entirety and
a new sentence shall be added as follows:
"March agrees to employ JFN as its President and Co-
Chairman of the Board."
2. Article IV, Section (c) shall be deleted in its entirety, and a new
Section (c) shall be added as follows:
"(c) Expense Reimbursement - March will pay or reimburse JFN
for all reasonable and necessary out of pocket expenses
incurred by him in the performance of the duties under this
Employment Agreement, subject to the presentation of
appropriate vouchers in accordance with March's normal
policies for expense verification.
3. Article IV, Section (d) shall be deleted in its entirety and a new
Section (d) shall be added as follows:
(d) Stock Option - The Company will grant a stock option to JFN in
the amount of 300,000 shares, at an exercise price of $6.00
per share, effective January 1, 1998. Of the 300,000 options
granted under this Section (d), options to purchase 100,000
shares shall be immediately exercisable, options to purchase
100,000 shares shall become exercisable on the first
anniversary of the Employment Agreement, and options to
purchase 100,000 shares shall become exercisable on the second
anniversary of the Employment Agreement, provided, however, at
such time as JFN is no longer either President or Co-Chairman
of the Company, all options which have not become exercisable
shall terminate.
4. Except as herein amended, the Employment Agreement, as amended, is
expressly ratified and confirmed.
IN WITNESS WHEREOF, the parties have executed this Second Amendment of
Employment Agreement as of the day and year first above written.
NORTON MOTORS INTERNATIONAL INC., a
Minnesota corporation
By:
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Name:
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Title:
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Xxxxxx X. Xxxxxxxxx
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