EMPLOYMENT AGREEMENT
This Employment Agreement dated effective as of January
1, 1999, is by and between ▇▇▇▇▇▇ CORPORATION, a Minnesota
corporation located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ (the "Company") ▇▇▇▇▇▇ ▇▇▇▇▇▇, an individual
residing at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ (the "Employee").
A. The Employee is familiar with the Company's business
and products.
B. The parties wish to provide for the employment of the
Employee by the Company.
C. The Employee wishes to receive compensation from the
Company for the Employee's services, and the Company desires,
reasonable protection of its confidential business and technical
information that has been acquired and is being developed by the
Company at substantial expense.
D. The Company is the wholly-owned subsidiary of Oakridge
Holding, Inc., a Minnesota corporation ("Holdings"). Holdings has
established the Oakridge Holdings, Inc. 1998 Stock incentive
Awards Plan (the "Plan") pursuant to which eligible employees of
Holdings and its subsidiaries, including the Company, may, in the
discretion of the Board of Directors of Holdings, receive grants
of incentive and non-statutory stock options, and the Company and
Holdings wish to provide Employee with an opportunity to earn
options under the Plan in the event certain goals of the Company
and Employee are achieved.
E. The Company wishes to obtain reasonable protection
against unfair competition from the Employee following
termination of employment and to further protect against unfair
use of its confidential business and technical information and
the Employee is willing to grant the Company the benefits of a
covenant-not-to-compete for these purposes.
For good and valuable consideration, the receipt of which is
hereby acknowledged, the Company and the Employee each intending
to be legally bound, agree as follows:
1. Employment.
(a) Employment. Subject to all of the terms and
conditions of the Agreement, the Company agrees to employ the
Employee as its Vice President - Sales and Marketing, and the
Employee accepts such employment.
(b) Duties. The Employee will devote a minimum of
forty (40) hours per week to, and, during such time, make the
best use of Employee's energy, knowledge and training in
advancing the Company's interests. The Employee will diligently
and conscientiously perform the duties of the Employee's position
within the general guidelines to be determined by the Company's
Board of Directors (the "Board") and its President. While the
Employee is employed by the Company, the Employee will keep the
Company informed of any other business activities or outside
employment, and will promptly stop any activity or employment
that might conflict with the Company's interests or adversely
affect the performance of the Employee's duties for the Company.
2. Compensation.
(a) Salary. The company agrees to pay Employee a
salary at a rate of $90,000 per year form the date hereof through
December 31, 1999, and at a rate of $92,700 from January 1, 2000
through the date of termination of this agreement, increased from
time to time as the President in his sole discretion, determines
(the "Salary"). Such Salary will be paid no less often than semi-
monthly in accordance with the standard payroll practices of the
Company.
(b) Bonuses.
(1) Signing Bonus. Upon execution of this
Agreement, Employee will receive 5,000 shares of the common stock
of Holdings, $0.10 par value (the "Common Stock") as a signing
bonus.
(2) Sales Performance Bonus. In addition to
Salary and the Signing Bonus, Employee will be eligible for a
Sales performance bonus (the "Sales Bonus") consisting of 1.2%
commission on all sales, except sales by ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇▇.
(3) Bonuses. For purposes of this agreement, the
term "Bonuses" means the Signing bonus and the Sales Bonus, if
any.
(c) Stock Options.
(1) Annual Grant. On each of the first and
second anniversary dates of this Agreement, so long as Employee
is not in breach of any provision of this Agreement and has
remained fully employed by the Company at all times during such
years, Employee will receive an incentive stock option (the
"Annual Option")under the Plan to purchase 5,000 shares of Common
Stock.
(2) Discretionary Annual Grant. In addition to
the Performance Option and the Annual Option, the President of
the company may, in his sole discretion, authorize the grant to
Employee of incentive stock options under the Plan to purchase up
to 10,000 shares of Common Stock per year, or authorize the
payment of an annual cash discretionary bonus of up to $20,000,
or a combination thereof.
(d) Miscellaneous Provisions Regarding Stock Options.
(1) Stock Option Agreement; Exercise Price and
Vesting. All options granted hereunder shall be made pursuant to
an Incentive Stock Option Agreement in substantially the form of
Exhibit A attached hereto. All such options will have an
exercise price equal to 100% of the fair market value per share
and will exercisable upon issuance by Holdings.
(2) The Plan. All options granted hereunder
shall be issued pursuant to and governed by the terms of the
Plan, and in the event of a conflict between the terms of the
Plan and this Agreement, the terms of the Plan will govern.
(e) Reimbursement of Business Expenses. The Company
agrees to reimburse the Employee for all reasonable out-of-
pocket business expenses incurred by the Employee on behalf of
the Company, provided that the Employee properly accounts to the
Company for all such expenses in accordance with the rules and
regulations of the Internal Revenue Service under the Internal
Revenue Code of 1986, as amended (the "Code") and in accordance
with the standard policies of the Company relating to
reimbursement of business expenses. To the extent any single
expense exceeds $1,000, the Employee shall obtain prior approval
of such expense from the president of the Company.
(f) Benefits and Vacation. The Employee is entitled
to participate in all benefit plans adopted by the Company to the
extent that the terms of such benefit plans permit the Employee
to participate. The Employee is entitled to four (4) weeks, paid
vacation and all legal holidays observed by the Company, in each
case, in accordance with the Company's policies as in effect from
time-to-time.
3. Term and Termination.
(a) Term. Subject to earlier termination in
accordance with Section 3(b) below, this Agreement will become
effective on the date set forth above and will have an initial
term of two (2) years.
(b) Termination. Subject to the respective continuing
obligations of the Company and the Employee under Sections 4, 5
and 6:
(1) The Company may terminate this Agreement
immediately on written notice to the Employee for cause,
including (without limitation) (i) dishonesty, fraud, material
and deliberate injury or attempted injury, in each case related
to the Company or its business, (ii) any unlawful or criminal
activity of a serious nature, (iii) any willful breach of duty or
habitual neglect of duty or (iv) any breach of Sections 4, 5 or 6
of this Agreement;
(2) This Agreement will terminate upon Employee's
death or upon written notice from the Company in the event of
Employee's "permanent disability" (the term "permanent
disability" means the occurrence of an event which constitutes
permanent and total disability within the meaning of Section
22(e)(3) of the Code);
(3) This Agreement will terminate upon a change
in control. For purposes of this Agreement, a "Change in
Control" means (i) the sale, lease, exchange or other transfer of
all or substantially all of the assets of Holdings to a
corporation, person or other entity that is not controlled by
Holdings; (ii) the approval by the shareholders of Holdings any
plan or proposal for the liquidation or dissolution of Holdings;
(iii) a merger or consolidation to which Holdings is a party if
the shareholders of Holdings immediately prior to the effective
date of such merger or consolidation have "beneficial ownership"
(as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), immediately following the
effective date of such merger consolidation, of securities of the
surviving corporation representing (A) 50% or more, but not more
than 80%, of the combined voting power of the surviving
corporation's then outstanding securities ordinarily having the
right to vote at elections of directors, unless such merger or
consolidation has been approved in advance by the Board, or (B)
less than 50% of the combined voting power of the surviving
corporation's then outstanding securities ordinarily having the
right to vote at elections of directors (regardless of any
approval by the Board of Directors of Holdings); (iv) any person
becomes, after the date hereof, the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of (A) 20% or more, but not 50% or more, of the
combined voting power of the outstanding securities of Holdings
ordinarily having the right to vote at elections of directors,
unless the transaction resulting in such ownership has been
approved in advance by the Board of Directors of Holdings, or (B)
more than 50% of the combined voting power of the outstanding
securities of Holdings ordinarily having the right to vote at
elections of directors (regardless of any approval by the Board);
or (v)a change in control of Holdings of a nature that would be
required to be reported pursuant to Section 13 or 15 (d) of the
Exchange Act, whether or not Holdings is then subject to such
reporting requirements.
The date this Agreement is terminated is hereinafter referred to
as the Termination Date."
(c) Compensation Upon Termination. If the Company
terminates this Agreement pursuant to paragraph (1) of Section
3(b), the Company will be obligated to pay the Employee only the
Salary as may be due and owing through the Termination Date and
all other non-contingent compensation earned and accrued up
through the Termination Date which will specifically not include
any Bonus payments. Such Salary will be paid in one lump sum
within ten business days of the Termination Date. If this
Agreement terminates pursuant to paragraphs (2) or (3) of Section
3(b), the Company will be obligated to pay the Employee (i) an
amount equal to the Employee's Salary for a period of six (6)
months at the rate in effect on the date of termination; and (ii)
all other non-contingent compensation earned and accrued up
through the Termination Date, including any Bonus payments. Such
Salary and non-contingent compensation will be paid in one lump
sum within ten business days of the date of termination.
4. Confidentiality.
(a) Prohibition on Use of Confidential Information.
The Employee agrees not to directly or indirectly disclose or use
at any time, either during or subsequent to his employment by the
Company and any of its subsidiaries or affiliates (which
obligation will survive indefinitely), any technology, trade
secrets, know-how, or other information, knowledge, or data
possessed or used by the Company or Holdings or to which the
Employee gains access in connection with his employment and which
the Company or Holdings deems confidential or proprietary or
which the Employee has reason to believe is confidential or
proprietary, except as such disclosure or use may be required in
connection with his work for the Company or unless the Employee
first secures the written consent of the Company and Holdings.
Upon termination of his employment, the Employee will promptly
return to the Company all originals and all copies of all
property and assets of the Company or Holdings created or
obtained by the Employee as a result of or in the course of or in
connection with his employment with the Company which are in the
Employee's possession or control, whether confidential or not,
including, but not limited to, computer files, software programs,
computer equipment, correspondence, notes, memoranda, notebooks,
drawings, customer lists, or other documents delivered to the
Employee concerning any idea, product, apparatus, invention or
process manufactured, used, developed, investigated, or marketed
by the Company or Holdings during the period of his employment.
(b) Third-Party Information. The Employee understands
and acknowledges that the Company has a policy prohibiting the
receipt by the Company of any confidential information in breach
of the Employee's obligations to third parties and does not
desire to receive any confidential information under such
circumstances. Accordingly, the Employee will not disclose to
the Company or use in the performance of any duties for the
Company any confidential information in breach of an obligation
to any third party. The Employee represents that he has provided
the Company with a copy of any agreement by which the Employee is
bound that restrict the Employee'' use of any third party''
confidential information.
5. Inventions.
(a) Definition. "Inventions", as used in this
Agreement, means any inventions, discoveries, improvements and
ideas, whether or not in writing or reduced to practice and
whether or not patentable or copyrightable, made, authored or
conceived by the Employee, whether by the Employee's individual
efforts or in connection with the efforts of others, and that
either (i) related in any way to the Company's business, products
or processes, past, present, anticipated or under development, or
(ii) result in any way from the Employee's employment by the
Company, or (iii) use the Company's equipment, supplies,
facilities or trade secret information.
(b) Ownership of Inventions. The Employee agrees that
all Inventions made by the Employee during the period of the
Employee's employment with the Company and for eighteen (18)
months thereafter, whether made during the working hours of the
Company or on the Employee's own time, will be the sole and
exclusive property of the Company. The Employee will, with
respect to any Invention: (i) keep current, accurate, and
complete records, which will belong to the Company and be kept
and stored on the Company's premises; (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 Employee hereby assigns) to the Company all of the
Employee's right, title and interest in and to the Invention, any
applications the Employee makes for patents or copyrights in any
country, and any patents or copyrights granted to the Employee in
any country; and (iv) acknowledge and deliver promptly to the
Company any written instruments, and perform any other acts
necessary in the Company's opinion 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. The Employee agrees to perform promptly (without
charge to the Company but at the expense of the Company) all acts
as may be necessary in the Company's opinion to preserve all
patents and/or copyrights granted upon the Employee's Inventions
forfeiture, abandonment or loss.
The requirements of this Section 5(b) do not apply to any
Invention for which no equipment, supplies, facility or trade
secret information of the Company was used and which was
developed entirely on the Employee's own time, and (i) which does
not relate directly to the Company's business or to the Company's
actual or demonstrably anticipated research or development, or
(ii) which does not result from any work the Employee performed
for the Company. The Employee represents that, except as
disclosed below, as of the date of this Agreement, the Employee
has no rights under and will make no claims against the Company
with respect to, any inventions, discoveries, improvements, ideas
or works of authorship which would be Inventions if made,
conceived, authored or acquired by the Employee during the term
of this Agreement.
(c) Works Made for Hire. To the extent that any
Invention qualifies as "work made for hire" as defined in 17
U.S.C. & 101 (1976), as amended, such Invention will constitute
"work made for hire" and, as such, will be the exclusive property
of the Company.
(d) Presumption. In the event of any dispute,
arbitration or litigation concerning whether an invention,
improvement or discovery made or conceived by the Employee is the
property of the Company, such invention, improvement or discovery
will be presumed the property of the Company and the Employee
will bear the burden of establishing otherwise.
(e) Survivability. The obligations of this Section 5
will survive the expiration or termination of this Agreement.
6. Non-Competition Agreement.
(a) Other Agreements. The Employee represents and
warrants to the Company that he is not currently subject to a
non-competition, confidentiality or other such agreement with a
former employer which prohibits the Employee from working for the
Company.
(b) Definition. "Company Product" means any actual or
projected product, product line or service that has been
designed, developed, manufactured, marketed or sold by the
Company during the Employee's employment with the Company or
regarding which the Company has conducted or acquired research
and development during the Employee's employment with the
Company.
(c) Non-Compete. The Employee agrees that, during his
employment with the Company and for a period of two (2) years
after employment with the Company ends, the Employee will not
alone, or in any capacity with another firm, within any
geographical area in which the Company, at the termination of the
Employee's employment with the Company, was engaged in more than
an insignificant volume of business:
(1) directly or indirectly participate in or
support in any capacity (e.g., as an advisor, principal, agent,
partner, officer, director, shareholder, employee or otherwise)
the manufacture, invention, development, sale, solicitation of
sale, marketing, testing, research or other business aspect of
any actual or projected product, product line or service
designed, developed, manufactured, marketed or sold by anyone
other than the Company that performs similar functions or is used
for the same general purposes as a Company Product; (2) call
upon, solicit, contact or serve any of the then-existing clients,
customers, vendors or suppliers, of the Company, any clients,
customers, vendors or suppliers that have had a relationship with
the Company during the preceding twelve (12) months, or any
potential clients, customers, vendors or suppliers that were
solicited by the Company during the preceding twelve (12) months;
(3) disrupt, damage, impair, or interfere with
the business of the Company whether by way of interfering with or
disrupting the Company's relationship with employees, customers,
agents, representatives or vendors; or
(4) employ or attempt to employ (by soliciting
or assisting anyone else in the solicitation of) any of the
Company's then employees on behalf of any other entity, whether
or not such entity competes with the Company.
(d) Exceptions to Non-Compete. The
restrictions contained in Section 6(c) of this Agreement will not
prevent the Employee from accepting employment with a large
diversified organization with separate and distinct divisions
that do not compete, directly or indirectly, with the Company, as
long as prior to accepting such employment the Company receives
separate written assurances from the prospective employer and
from the Employee, satisfactory to the Company, to the effect
that the Employee will not render any services, directly or
indirectly, to any division or business unit that competes,
directly or indirectly, with the Company. During the restrictive
period set forth in Section 6(c), the Employee will inform any
new employer, prior to accepting employment, of the existence of
this Agreement and provide such employer with a copy of this
Agreement.
(e) Cessation of Business. Section 6(c) of
this Agreement will cease to be applicable to any activity of the
Employee from and after such time as the Company (i) has ceased
all business activities for a period of six (6) months or (ii)
has made a decision through its Board of Directors not to
continue, or has ceased for a period of six (6) months, the
business activities with which such activity of the Employee
would be competitive.
(f) No Additional Compensations. In the
event that the Employee's employment terminates for any reason,
no additional compensation will be paid for this non-competition
obligation.
(g) Survival. The obligations of this
Section 6 will survive the expiration or termination of this
Agreement
7. Miscellaneous.
(a) No Adequate Remedy. The Employee understands
that if the Employee fails to fulfill Employee's obligations
under Sections 4, 5 and 6 of this Agreement, the damages to the
Company would be very difficult to determine. Therefore, in
addition to any rights or remedies available to the Company at
law, in equity, or by statute, the Employee hereby consents to
the specific enforcement of Sections 4, 5 and 6 of this Agreement
by the Company through an injunction or restraining order issued
by an appropriate court.
(b) Consent to Use of Name. The Employee
consents to the use of Employee's name in appropriate Company
materials such as, but not limited to, offering memoranda related
to financing activities of the Company.
(c) No Conflicts. The Employee represents and
warrants to the Company that neither the entering into of this
Agreement nor the performance of any obligations hereunder will
conflict with or constitute a breach under any obligation of the
Employee, as the case may be, under any agreement or contract to
which the Employee is a party or any other obligation by which
the Employee is bound. Without limiting the foregoing, the
Employee agrees that at no time will the Employee use any trade
secrets or other intellectual property of any third party while
performing services hereunder.
(d) Successors and Assigns. This Agreement is
binding on and inures to the benefit of the Company's successors
and assigns; provided however, that the Company may assign the
Agreement only connection with a merger, consolidation,
assignment, sale or other disposition or substantially all of its
assets or business. This Agreement is also binding on the
Employee's heirs, successors, assigns and legal representatives.
(e) Modification. This Agreement may be modified
or amended only by a writing signed by the Company and the
Employee.
(f) Governing Law. The laws of Minnesota will
govern the validity, construction, and performance of this
Agreement. Any legal proceeding related to this Agreement will
be brought in an appropriate Minnesota court, and the Company and
the Employee hereby consent to the exclusive jurisdiction of that
court for this purpose.
(g) Dispute Resolution. Except for any
proceeding brought pursuant to Section 7(a) herein, the parties
agree that any dispute arising out of or relating to this
Agreement or the formation, branch, termination or validity
thereof (a "Dispute"), will be resolved as follows. If the
Dispute cannot be settled through direct discussions, the parties
will first try to settle the Dispute in an amicable manner by
mediation under the Commercial Mediation Rules of the American
Arbitration Association, before resorting to arbitration. Any
Dispute that has not been resolved within sixty(60) days of the
initiation of the mediation procedure (the "Mediation Deadline")
will be settled by binding arbitration by a panel of three
arbitrators in accordance with the commercial arbitration rules
of the American Arbitration Association. The arbitration and
mediation proceedings will be located in Minneapolis, Minnesota.
The arbitrators are not empowered to award damages in excess of
compensatory damages and each party hereby irrevocably wives any
damage in excess of compensatory damages. Judgment upon any
arbitration award may be entered into any court having
jurisdiction thereof and the parties' consent to the jurisdiction
of the courts the state in which the arbitration occurred for
this purpose.
(h) Construction. Whenever possible, each
provision of this Agreement will be interpreted so that it is
valid under the applicable law. If any provision of this
Agreement is to any extent declared invalid by a court of
competent jurisdiction under the applicable law, that provision
will remain effective to the extent not declared invalid. The
remainder of this Agreement also will continue to be valid, and
the entire Agreement will continue to be valid in other
jurisdictions.
(i) Waivers. No failure or delay by the Company
or the Employee in exercising any right or remedy under this
Agreement will waive any provision of the Agreement. Nor will
any single or partial exercise by either the Company or the
Employee of any right or remedy under this Agreement preclude
either of them from otherwise or further exercising these rights
or remedies, or any other rights or remedies granted by any law
or any related document.
(j) Entire Agreement. This Agreement supersedes
all previous and contemporaneous oral negotiations, commitments,
writings and understandings between the parties concerning the
matters in this Agreement, including without limitation any
policy or personnel manuals of the Company.
(k) Notices. All notices and other
communications required or permitted under this Agreement will be
in writing and sent by registered first-class mail, postage
prepaid, and will be effective five days after mailing to the
addresses stated at the beginning of this Agreement. These
addresses may be changed at any time by like notice.
IN WITNESS WHEREOF, the Company and the Employee have executed
this Agreement as of the date first above written.
▇▇▇▇▇▇ CORPORATION
By:/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
EMPLOYEE
By:/S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇