EXECUTIVE EMPLOYMENT AGREEMENT
THIS
AGREEMENT is made and entered into this 11th day of
September, 2006, by and between Cycle Country Accessories
Corporation,
an Iowa Corporation, (hereinafter referred to as the
"Corporation")
and Randy Kempf, of Greenwood, Indiana, (hereinafter referred to
as
the "Executive").
WHEREAS the Corporation has been actively pursuing a
replacement
for its previous President and Chief Executive Officer and as such
has
met with and interviewed the Executive, and is desirous of
employing
the Executive in an executive and managerial capacity for the
Corporation; and
WHEREAS the Executive is agreeable to becoming employed by the
Corporation in an executive and managerial capacity for a period of
36
(thirty-six) 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
Chief Executive Officer for a period of 36 (thirty-six) months
commencing the 18th day of September, 2006 to the 18th day of
September, 2009. This
agreement will automatically be extended for
incremental thirty-six (36) month periods upon the conclusion of
the
existing period, unless the Executive is unable, as provided in
sections 6 and 7 hereof, or discharged for cause, as provided
in
section 8 hereof.
2.
SCOPE OF
SERVICES. The
Executive shall serve as President
and Chief Executive Officer of the Corporation. As such, the
Executive
shall be in full charge of the operations of the Corporation or
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Corporation's business affairs, subject to the directions of
the
chairman of the Board of Directors 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 2188 Highway 86, Milford, Iowa, 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 (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 his employment, basic current compensation
at
the rate of $187,500.00 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 three (3) months from the end of
the
month in which such death occurs. Said amounts shall be payable
weekly.
B.
Bonus
Compensation.
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1)
Signing Bonus
Compensation. The
Executive shall
receive a signing bonus equivalent to $100,000.00 to be
paid in stock in the Corporation. This stock shall be
valued at the average per share price on the day of
commencement of employment, with 25 percent issued on the
first day of employment and the remaining 75% issued in
equal increments of 25% on the anniversary date of the
commencement of employment during the next three years of
employment.
2)
Annual Bonus
Compensation. In addition to the
basic current compensation and signing bonus, the Executive
shall receive bonus compensation, which will be three
percent (3%) of the pre-tax net income in excess of the
average of pre-tax net income for the prior three years
(Fiscal 2004, 2005, and 2006). This annual bonus
compensation shall be for fiscal year 2007 and beyond and
shall be paid in stock, cash, or a combination of stock and
cash at the discretion of the Executive. Any portion which
is taken in stock will be valued at the average price on
the last trading day of the fiscal year. The prior three-
year average is estimated to be approximately $1.667
million dollars and will be adjusted based on the actual
fiscal 2006 pre-tax net income.
3)
Moving and
Relocation Reimbursement. The
Corporation hereby agrees to reimburse the Executive for
realtor's fees, attorney's fees, and other normal closing
costs associated with the sale of his existing residence,
which will be paid within 10 days of submittal of proof of
the expenses. The
Corporation will also reimburse the
Executive for actual moving costs (rental of moving van,
packing, loading and unloading - but not unpacking). There
will be no reimbursement for the moving of RVs or similar
vehicles, with the exception of the Executive's boat and
boat trailer, which will be paid for by the Corporation, or
the Executive may choose a payment of $200.00 for excess
costs of relocation, should he elect to tow the boat and
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it's trailer by himself. Normal mileage reimbursements
(.40 cents per mile) associated with the relocation, will
be paid for by the Corporation. The Corporation will be
responsible fo
