EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this _____ day of
__________, 2001, by and between Cycle Country Accessories
Corporation, an Iowa Corporation, (hereinafter referred to as the
"Corporation") and Xxxxxx Xxxxxxx of Estherville, Iowa, (hereinafter
referred to as the "Executive").
WHEREAS the Executive has been an employee of the Corporation
since 1995 as an officer and general manager of the Corporation.
WHEREAS, the Corporation desires to assure themselves the
services of the Executive in an executive capacity for an additional
sixty (60) months on the terms and conditions set forth herein; and
WHEREAS, the Executive is agreeable to continue in an executive
capacity for said sixty (60) months and is willing to accept and
undertake such employment.
NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND MUTUAL
COVENANTS HEREIN SET FORTH, THE CORPORATION AND THE EXECUTIVE AGREE AS
FOLLOWS:
1. EMPLOYMENT. The Corporation agrees to and does hereby
employ the Executive and the Executive agrees to and does hereby
accept employment by the Corporation, in the capacity of President,
and member of the Board of Directors, for a period of sixty (60)
months commencing the _____ day of ____________, 2001 to the ____ day
of ______________, 2007.
1
2. SCOPE OF SERVICES. The Executive shall serve as President
and a member of the Board of Directors of the Corporation. As such,
the Executive shall be in full charge of the operations of the
Corporation or Corporation's business affairs, subject to the
directions of the chairman of the Board of Directors and/or the
Corporation's chief executive officer, and also subject at all times
to the control of the Board of Directors.
3. FULL-TIME SERVICES. The Executive agrees that during the
term of his employment he will (subject to the provisions of Section 6
hereof), devote substantially all of his time and energies, during
business hours, to the supervision, management, and conduct of the
business affairs of the Corporation. The Executive will faithfully
and to the best of his ability, discharge his duties hereunder to the
furtherance of the interests of the Corporation. The Executive will
not accept other gainful employment, become or remain an officer or
director in any other Corporation, except with the consent of the
Board of Directors of the Corporation.
4. PLACE OF EMPLOYMENT. The Executive will perform his
services hereunder at the principal office of the Corporation, which
is presently located at: 0000 Xxxxxxx 00, Xxxxxxx, Xxxx, or at such
other locations as directed by the Corporation.
5. COMPENSATION. For all services to be rendered
hereunder by the Executive, the Corporation will pay the Executive
2
(1) basic current compensation; (2) bonus compensation; and (3) fringe
benefits, as hereinafter set forth.
A. Basic Current Compensation. The Executive shall (except
as otherwise provided in Section 6 hereof) receive, during the
term of employment, basic current compensation at the rate of
$150,000.00 per annum. Said amount shall be payable in equal
weekly installments. In the event the Executive's employment is
terminated by death, as provided in Section 7 hereof, the
Corporation will continue to pay the Executive or his designee,
or the executor of his estate, the basic current compensation for
a period of six (6) months from the end of the month in which
such death occurs. Said amounts shall be payable weekly.
B. Bonus Compensation. In addition to the basic current
compensation provided above, the Executive shall receive bonus
compensation which will be three percent (3%) of the net income
before taxes of the Corporation. Such bonus compensation shall
be payable within thirty (30) days of the original due date of
the Corporation's federal income tax return.
C. Fringe Benefits.
(1) HEALTH INSURANCE. The Executive shall receive
full health insurance benefits, including family
coverage.
3
(2) MOTOR VEHICLE. The Corporation shall supply the
Executive with a motor vehicle suitable for use
as an executive vehicle. The Corporation shall
further reimburse the Executive for all
reasonable expenses, including fuel, repairs, and
insurance, etc.
(3) SICK PAY AND HOLIDAYS. The Executive shall
receive sick pay and holidays as are in effect
for all other employees.
(4) VACATION. The Executive shall receive a minimum
of three (3) weeks paid vacation per year.
(5) CONTINUING EDUCATION. The Executive will receive,
and the Corporation shall provide, all expenses
incurred towards his continuing education as a
certified public accountant to the extent of
forty (40) hours of continuing education per
year.
6. DISABILITY. In the event that the Executive should
become disabled or incapacitated by illness or otherwise, for a
continuous period of not less than six (6) months, during which time
he shall be unable to perform the duties required of him under this
Agreement, the Board of Directors of the Corporation, acting in good
faith, may terminate the employment of the Executive hereunder. Said
termination shall be made by giving thirty (30) days written notice of
such termination of the Executive. No such right of termination
4
may be exercised, in the absence of written consent of the Executive,
unless a qualified independent physician shall have certified that the
Executive is (1) permanently disabled or (2) incapable of resuming
substantially full-time performance of his duties, under the
Agreement, for a period of at least six (6) months after his initial
disability. Said independent physician shall be selected by the
Corporation and approved by the Executive. If the Executive is unable
to give such approval, such physician shall be approved by an adult
member of his family. In the event of termination of the Executive's
employment pursuant to this Section, the Executive shall cease to be
entitled to receive the Basic Current Compensation; but shall be
entitled to receive $2,885.00 per week from the effective date of the
termination of employment for a period of six (6) months. In
addition, the Executive shall be entitled to receive any bonuses
declared under the provisions of Section 5C hereof for the year in
which the termination occurs. The bonuses shall be prorated to
reflect the percentage of the year that the Executive was employed.
EXAMPLE:
Executive's bonus (based on calculation in Section 5C)
Termination Date in sixth month of that year.
Executive's Bonus reduced by 50 percent.
7. DEATH. In the event of the death of the Executive, all
compensation shall terminate at the expiration of the month of his
death, except as provided in Section 5B and except as to any bonus to
5
which the Executive might become entitled. Said bonus will be
calculated as provided in Section 6 hereof, and said bonus amount
shall be paid to the Executive's Executor or designee.
8. TERMINATION OF EMPLOYMENT AGREEMENT. In the event that the
Executive shall wish to voluntarily terminate this Agreement, he shall
give 180 days written notice to the Corporation of his intent
to terminate this Agreement. At the time of said termination, all
compensation which the Executive is receiving pursuant to this
Agreement shall cease, except for any bonuses declared in the 2nd to
5th year, under the provisions of Section 5C hereof for the year in
which the termination occurs. The bonuses shall be prorated to reflect
the percentage of the year that the Executive was employed. Should the
Executive terminate during the first year of his employment under this
Agreement, he shall forfeit any bonus compensation which he was entitled
to under Section 5B.
9. DISCHARGE FOR CAUSE. The Board of Directors of the
Corporation may discharge the Executive, before the expiration of a
contractual term of employment, for such negligence or misconduct,
either by omission or commission by the Executive, as shall constitute
as a matter of law a breach of the Executive's obligations hereunder.
10. INVENTIONS. The Executive agrees, that so long as he is
employed hereunder, any and all inventions, whether patentable or not,
developed by him during the period of employment and pertaining to the
general lines of the products of the Corporation, or any of the other
involved corporations, shall be the sole property of said Corporation.
The Executive shall not be entitled to any additional compensation on
account of such inventions.
6
11. COVENANT NOT TO COMPETE. Executive agrees that he will
not compete with the Corporation, directly or indirectly, as an
officer, principal, stockholder, agent, employee or otherwise, either
alone or in association with other persons, firms or corporations, in
any place within or without the United States of America, regarding
the production, manufacture, sale or distribution of any products
similar to those produced, manufactured, sold or distributed by the
Corporation, except with the prior written consent of the Corporation.
This Agreement shall cover any period of time during which he is
receiving or is entitled to receive compensation hereunder, and also a
period of two (2) years thereafter. The Executive further agrees,
that during such periods, he will not disclose to any other person or
business entity any trade secrets or other confidential information as
to the Corporation.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the personal representatives and
successors in interest of the Executive, the personal representatives
and successors in interest of the Corporation.
CORPORATION: Cycle Country Accessories Corporation
By:_________________________
Title:______________________
EXECUTIVE: ____________________________
Xxxxxx Xxxxxxx
7
