Exhibit
10.7
EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”)
is entered into as of August 27, 2007 by and between Mark Adamson, an
individual (“Executive”), and Douglas
Dynamics Holdings, Inc., a Delaware corporation (the “Company”).
1. Employment
by the Company and Term.
(a) Full
Time and Best Efforts. Subject to
the terms set forth herein, the Company and Douglas Dynamics, L.L.C., a
Delaware limited liability company and wholly-owned subsidiary of the Company (“Douglas”), respectively, agree to
employ Executive as their Vice President Sales & Marketing and in such
other executive capacities as may be requested from time to time by the Company’s
Board of Directors (the “Board”) or
a duly authorized committee thereof, and Executive hereby accepts such
employment. Executive shall render such
other services for each of the Company, Douglas and corporations controlled by
or controlling the Company or Douglas, as the case may be, and to successor
entities and assignees of the Company or Douglas, as the case may be (the “Affiliates”) as the Company or
Douglas, as the case may be, may from time to time reasonably request and shall
be consistent with the duties Executive is to perform for the Company and
Douglas and with Executive’s experience.
During the term of his employment with the Company and Douglas,
Executive will devote his full business time and use his best efforts to
advance the business and welfare of the Company and Douglas, and will not
engage in any other employment or business activities for any direct or
indirect remuneration that would be directly harmful or detrimental to, or that
may compete with, the business and affairs of the Company or Douglas, or that
would interfere with his duties hereunder.
(b) Duties. Executive shall serve in an executive
capacity and shall perform such duties as are customarily associated with his
position, consistent with the Bylaws of the Company or the Operating Agreement
of Douglas, as the case may be, and as reasonably required by the Board.
(c) Company
Policies. The employment
relationship between the parties shall be governed by the general employment
policies and practices of the Company, including but not limited to those
relating to protection of confidential information and assignment of inventions,
except that when the terms of this Agreement differ from or are in conflict
with the Company’s general employment policies or practices, this Agreement
shall control.
(d) Term. The initial term of employment of Executive
under this Agreement shall begin on August 27, 2007 (the “Effective Date”)
for an initial term ending on August 27, 2010 (such period, the “Initial
Term”), subject to the provisions for termination set forth herein and renewal
as provided in Section 1(e) below.
(e) Renewal. Unless either party shall have given the
other notice that this Agreement shall not be renewed at least ninety (90) days
prior to the end of the Initial Term, the term of this Agreement shall be
automatically extended for a period of one year, such procedure
to be followed in each such successive period. Each extended term shall continue to be
subject to the provisions for termination set forth herein.
2. Compensation
and Benefits.
(a) Base
Salary. Executive shall receive for
services to be rendered hereunder a salary at the rate of $17,083.33 per month
payable at least as frequently as monthly and subject to payroll deductions as
may be necessary or customary in respect of the Company’s and Douglas’ salaried
employees (the “Base Salary”). The Base Salary will be reviewed by and shall
be the sole discretion of the Board each year during the term of this
Agreement.
(b) Participation
in Benefit Plans; Vacation. During
the term hereof, Executive shall be entitled to participate in any group
insurance, hospitalization, medical, dental, health, accident, pension,
disability or similar plan or program of the Company now existing or
established hereafter to the extent that he is eligible under the general
provisions thereof. The Company may, in
its sole discretion and from time to time, amend, eliminate or establish
additional benefit programs as it deems appropriate. Executive shall also participate in all
fringe benefits, including without limitation annual vacation time, offered by
the Company or Douglas to any of its executives at such Executive’s level.
3. Bonus.
(a) Performance-Based
Bonus. Executive shall be eligible
for performance-based bonuses awarded on an annual calendar year basis provided
the Company achieves financial objectives established by the Company’s
management and approved by the Board for such calendar year. For calendar years 2005 and following, such
approval by the Board shall occur (i) on or before December 31 of the
prior calendar year provided that the Company’s management has furnished the
Board with the proposed annual budget by November of such prior calendar
year or (ii) if the Company’s management has not furnished the Board with
the proposed annual budget by November, as soon as reasonably practicable after
the Company’s management has furnished the Board with the proposed annual
budget. Subject to the preceding
sentence, Executive shall be provided the opportunity to earn up to an
additional 100% of Executive’s annual Base Salary then in effect in
performance-based bonus compensation.
Subject to the immediately following sentence, performance-based bonuses
that are earned with respect to any calendar year will be payable no later than
the end of the first calendar quarter of the following calendar year. Notwithstanding anything
herein to the contrary, in the event the Company does not achieve the financial
objectives approved by the Board for any calendar year, Executive will only be
entitled to receive a performance-based bonus pursuant to this Section 3(a) for
such calendar year if the Board, in its sole and absolute discretion, elects to
pay such a bonus to Executive.
(b) If
Executive resigns before the last day of a calendar year (other than for a
Material Breach (as hereinafter defined)) or is discharged by the Company for
Cause before the last day of such calendar year, Executive will not be entitled
to receive a performance-based bonus pursuant to Section 3(a) for
such calendar year. If Executive’s
employment terminates prior to the last day of a calendar year for any other
reason, Executive shall be entitled to receive a pro rata part of the
performance-based bonus for such calendar year pursuant to Section 3(a)
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only if the Board, in its sole and absolute discretion, elects to pay a
pro rata part of the performance-based bonus to Executive.
4. Options. The Company shall reserve a percent of the
fully-diluted shares of the Company’s common stock as of the Effective Date
(the “Option Pool”) for incentive stock
options available for grant to the Executive and other members of the Company’s
executive management under the Company’s stock option plan or equity incentive
plan with an exercise price (in the case of options granted at or shortly after
the Effective Date) equal to the initial price per share paid by Aurora
Industrial Holdings LLC (formerly known as Douglas Dynamics Holdings, LLC) for
the Company’s common stock prior to the Effective Date. The Company shall grant Executive from the
Option Pool incentive stock options to purchase a percent of the Option Pool
(the “Executive Options”) the terms of
which shall be set forth in an option agreement approved by the Board and to be
entered into between the Company and Executive, which option agreement shall
provide, among other things, that the Executive shall have the right to pay the
exercise price of the Executive Options by a full recourse promissory note,
with the shares of common stock issued upon such exercise pledged as security
for payment of such note. The Executive
Options shall have a five (5) year vesting schedule with one fifth (1/5)
of the options vesting at the end of each of the first five years following the
Effective Date. Unvested Executive
Options scheduled to vest at the end of a year in which Executive’s employment
is terminated by the Company without Cause pursuant to Section 6(d) below
or by Executive pursuant to Section 6(b)(i) below shall vest pro-rata according to the number of months Executive was
employed in such year of termination.
Upon a change of control of the Company (as defined in the Company’s
stock option plan or equity incentive plan) while the Executive is employed by
the Company, the vesting schedule of the Executive Options shall accelerate and
thereafter all Executive Options shall be exercisable in full in accordance
with the provisions of the Company’s stock option plan or equity incentive plan
and the relevant option agreement between the Company and Executive. In accordance with the stock option agreement
to be entered into by the Company and Executive, the vested portion of
Executive Options will expire on the earlier to occur of ten (10) years
after date of grant or one hundred eighty (180) days after the termination of
employment of Executive for any reason (other than for Cause).
5. Reasonable
Business Expenses and Support.
Executive shall be reimbursed for documented and reasonable business
expenses in connection with the performance of his duties hereunder, including
appropriate professional fees and dues.
Executive shall be furnished reasonable office space, assistance,
including an administrative assistant and facilities.
6. Termination
of Employment. The date on which
Executive’s employment by the Company and Douglas ceases, under any of the
following circumstances, shall be defined herein as the “Termination
Date.”
(a) Termination
for Cause.
(i) Termination;
Payment of Accrued Salary and Vacation.
The Board may terminate Executive’s employment with the Company and
Douglas at any time for Cause, immediately upon notice to Executive of the
circumstances leading to such termination for Cause. In the event that Executive’s employment is
terminated for Cause, Executive shall receive payment for all accrued salary
and vacation time through the Termination Date, which in
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this event shall be the date upon which notice of termination is
given. The Company and Douglas shall
have no further obligation to pay severance of any kind whether under this
Agreement or otherwise.
(ii) Definition
of Cause. “Cause”
means the occurrence or existence of any of the following with respect to
Executive, as determined in good faith by a majority of the disinterested
directors of the Board: (a) a material breach by Executive of any of his
material obligations hereunder which remains uncured after the lapse of 30 days
following the date that the Company and/or Douglas has given Executive written
notice thereof; (b) a material breach by the Executive of his duty not to
engage in any transaction that represents, directly or indirectly, self-dealing
with the Company, Douglas or any of their respective Affiliates which has not
been approved by a majority of the disinterested directors of the Board, if in
any such case such material breach remains uncured after the lapse of 30 days
following the date that the Company and/or Douglas has given the Executive
written notice thereof; (c) the repeated material breach by the Executive
of any material duty referred to in clause (a) or (b) above as to
which at least two (2) written notices have been given pursuant to such
clause (a) or (b); (d) any act of misappropriation, embezzlement,
intentional fraud or similar conduct involving the Company, Douglas or any of
their respective Affiliates; (e) the conviction or the plea of nolo contendere or the equivalent in respect of a felony
involving moral turpitude; (f) intentional infliction of any damage of a
material nature to any property of the Company, Douglas or any of their
respective Affiliates; or (g) the repeated non-prescription abuse of any
controlled substance or the repeated abuse of alcohol or any other
non-controlled substance which, in any case described in this clause, the Board
reasonably determines renders the Executive unfit to serve in his capacity as
an officer or employee of the Company, Douglas or any of their respective
Affiliates.
(b) Termination
by Executive.
(i) Executive
shall have the right, at his election, to terminate his employment with the
Company and Douglas by written notice to the Company and Douglas to that effect
if (A) the Company and/or Douglas shall have failed to perform a material
condition or covenant of this Agreement (“Material Breach”);
provided, however, that termination for Material Breach will not be effective
until Executive shall have given written notice specifying the claimed breach
and, provided such breach is curable, Company and/or Douglas fails to correct
the claimed breach within thirty (30) days after the receipt of the applicable
notice (but within ten (10) days if the failure to perform is a failure to
pay monies when due under the terms of this Agreement), or (B) the Company
and/or Douglas repeatedly commit a Material Breach as to which at least two (2) written
notices have been given pursuant to this Section 6(b)(i). If the Executive terminates his employment
with the Company and Douglas pursuant to this Section 6(b)(i), then the
Executive shall be entitled to receive the benefits provided in Section 6(d)(i) or
(ii) hereof.
(ii) Executive
shall have the right, at his election, to terminate his employment with the
Company and Douglas for reason other than a Material Breach by 60 days’ prior
written notice to that effect. In the
event of termination by Executive pursuant to this Section 6(b)(ii), the
Company and Douglas shall have no termination payment requirements
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except that Executive shall receive the accrued portion of any salary
and vacation hereunder through the Termination Date, less requisite
withholdings for tax and social security purposes.
(c) Termination
Upon Disability. The Company and/or
Douglas may terminate Executive’s employment in the event Executive suffers a
disability that renders Executive unable to perform the essential functions of
his position, even with reasonable accommodation, for sixty (60) consecutive
days or for ninety (90) days within any one hundred eighty (180) day
period. After the Termination Date,
which in this event shall be the date upon which notice of termination is
given, no further compensation will be payable under this Agreement except that
(1) Executive shall receive the accrued portion of any salary and vacation
hereunder through the Termination Date, less requisite withholdings for tax and
social security purposes and (2) Executive shall be entitled to exercise
all vested Executive Options in accordance with their terms for a period of one
hundred eighty (180) days after such Termination Date.
(d) Termination
by Company and/or Douglas Without Cause; Termination by Executive Pursuant to Section 6(b)(i). The Company and/or Douglas may terminate
Executive’s employment at any time for other than Cause or disability, pursuant
to the following termination payment requirements and upon not less than sixty
(60) days’ prior written notice to that effect.
(i) Termination
Payments during the Initial Term. In
the event that Executive’s employment is terminated by the Company and/or
Douglas without Cause or by Executive pursuant to Section 6(b)(i) hereof,
(1) Executive shall be entitled to exercise all vested Executive Options
in accordance with their terms for a period of one hundred eighty (180) days
after such Termination Date and (2) the Company shall pay Executive as
severance an amount equal to twelve (12) months of his then Base Salary. Such remuneration shall be paid, less
requisite withholdings for tax and social security purposes, (A) in the
case of Base Salary, over such term in monthly pro rata payments commencing as
of the Termination Date and (B) in the case of the accrued portion of any
vacation, promptly after such Termination Date in conformity with applicable
law.
(ii) Termination
Payments After the Initial Term. In
the event that the term of this Agreement is extended pursuant to Section 1(e) hereof
(an “Extension Period”), and, at any
time thereafter, Executive’s employment is terminated by the Company and/or
Douglas without Cause or by Executive pursuant to Section 6(b)(i) hereof,
(1) Executive shall be entitled to exercise all vested Executive Options
in accordance with their terms for a period of one hundred eighty (180) days
after such Termination Date and (2) the Company shall pay Executive as
severance an amount equal to twelve (12) months of his then Base Salary. Such remuneration shall be paid, less
requisite withholdings for tax and social security purposes, (A) in the
case of Base Salary, over such term in monthly pro rata payments commencing as
of the Termination Date and (B) in the case of the accrued portion of any
vacation, promptly after such Termination Date in conformity with applicable
law.
(iii) Non-renewal
upon end of the Initial Term. In the
event that the parties hereto do not renew the Initial Term for an additional
term of one year pursuant to Section 1(e) hereof, (1) Executive
shall be entitled to exercise all vested Executive Options in accordance with
their terms for a period of one hundred eighty (180) days after such
Termination
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Date and (2) the Company shall pay Executive as severance an
amount equal to twelve (12) months of his then Base Salary, less requisite
withholdings for tax and social security purposes, payable over such term in
monthly pro rata payments commencing as of the Termination Date, plus the accrued
portion of any vacation through the Termination Date, less requisite
withholdings for tax and social security purposes.
(iv) The
Company shall not be obligated to pay any termination payments under Sections
6(d)(i), (ii) or (iii) above if Executive breaches in any material
way the provisions of Sections 7, 8, 9 or 10 below.
(e) Benefits
Upon Termination. All benefits
provided under Section 2(b) shall be extended, at Executive’s
election and cost (such cost to Executive to be in the same amount as the cost
for providing such benefits to existing employees), to the extent permitted by
the Company’s insurance policies and benefit plans, for one year after
Executive’s Termination Date, except (a) as required by law (e.g., COBRA
health insurance continuation election) or (b) in the event of a
termination described in Section 6(a).
(f) Termination
Upon Death. If Executive dies prior
to the expiration of the term of this Agreement, the Company shall (i) continue
coverage of Executive’s dependents (if any) under all benefit plans or programs
of the type listed above in Section 2(b) herein for a period of six (6) months,
(ii) pay to Executive’s estate the accrued portion of any salary and
vacation through the Termination Date, less requisite withholdings for tax and
social security purposes and (iii) provide Executive’s estate with the
right to exercise all vested Executive Options in accordance with their terms
for a period of one hundred eighty (180) days after Executive’s death.
(g) Termination
Upon Retirement. Executive shall
provide notice to the Company and Douglas of his retirement prior to the term
of this Agreement not less than one hundred twenty (120) days prior to the
effective date of Executive’s retirement as set forth in such notice (the “Retirement Notice”). In the event that Executive’s employment is
terminated by Executive’s retirement prior to the term of this Agreement, the
Termination Date shall be the effective date of Executive’s retirement as set
forth in the Retirement Notice. After
the Termination Date, no further compensation will be payable under this
Agreement except that (1) Executive shall receive the accrued portion of
any salary and vacation hereunder through the Termination Date, less requisite
withholdings for tax and social security purposes and (2) Executive shall
be entitled to exercise all vested Executive Options in accordance with their
terms for a period of one hundred eighty (180) days after such Termination
Date.
(h) Duty
to Mitigate; Termination of Severance Benefits. Executive agrees that upon any termination
pursuant to either of Section 6(b) or 6(d) hereof, Executive
shall have a duty to mitigate his damages hereunder. The Company and Executive further agree that
if, at any time following such a termination but prior to the expiration of the
period during which monthly severance benefits are to be paid by the Company
with respect to such termination, Executive secures employment, such monthly
severance benefits shall not be reduced by the amount of monthly compensation
Executive is to receive from such new employment as long as Executive does not
breach in any material way the provisions of Sections 7, 8, 9 or 10 of this
Agreement; provided, however,
that if Executive breaches in any material way the provisions of
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Sections 7, 8, 9 or 10 of this Agreement, the Company shall not be
obligated to pay any such severance benefits in accordance with Section 6(d)(iv) above.
7. Proprietary
Information Obligations. During the
term of employment under this Agreement, Executive will have access to and
become acquainted with the Company’s, Douglas’ and any of their respective
Affiliates’ confidential and proprietary information, including, but not
limited to, information or plans regarding the Company’s, Douglas’ and any of
their respective Affiliates’ customer relationships, personnel, or sales,
marketing, and financial operations and methods; trade secrets; formulas;
devices; secret inventions; processes; and other compilations of information,
records, and specifications (collectively “Proprietary Information”). Executive shall not disclose any of the
Company’s, Douglas’ or any of their respective Affiliates’ Proprietary
Information directly or indirectly, or use it in any way, either during the
term of this Agreement or at any time thereafter, except as required in the
course of his employment for the Company or Douglas or as authorized in writing
by the Company. All files, records,
documents, computer-recorded information, drawings, specifications, equipment
and similar items relating to the business of the Company, Douglas or any of
their respective Affiliates, whether prepared by Executive or otherwise coming
into his possession, shall remain the exclusive property of the Company,
Douglas or any of their Affiliates, as the case may be, and shall not be
removed from the premises of the Company or Douglas under any circumstances
whatsoever without the prior written consent of the Company, except when (and
only for the period) necessary to carry out Executive’s duties hereunder, and
if removed shall be immediately returned to the Company or Douglas, as the case
may be, upon any termination of his employment; provided,
however, that Executive may retain
copies of documents reasonably related to his interest as a shareholder and any
documents that were personally owned by Executive, which copies and the
information contained therein Executive agrees not to use for any business
purpose. Notwithstanding the foregoing,
Proprietary Information shall not include (i) information which is or
becomes generally public knowledge or public except through disclosure by the
Executive in violation of this Agreement and (ii) information that may be
required to be disclosed by applicable law.
8. Sole
Property of Company.
(a) Executive
acknowledges and agrees that all the now and hereafter existing literary
material, inventions, ideas, service marks, products, trademarks, copyrights,
trade names, service names, designs, patents, programs, documents, data,
methods, analyses, reports, discoveries, improvements, trade secrets,
techniques, processes, know-how and any other intellectual property rights,
whether or not subject to patent, trademark, copyright or trade secret
protection and whether or not reduced to practice or reduced to writing, which
was created either alone or jointly with others (the “Intellectual
Property”) during the course of Executive’s employment with the
Company, Douglas or any of their respective Affiliates (the “Company Intellectual Property”)
shall be the sole property of the Company, Douglas or other entity designated
by either the Company or Douglas, as the case may be, and Executive hereby
assigns to the Company or Douglas, as the case may be, his entire right and
interest in and to all the now and hereafter existing Company Intellectual
Property. The Company, Douglas or any
other entity designated by either the Company or Douglas, as the case may be,
shall be the sole owner of all domestic and foreign rights pertaining to the
now and hereafter existing Company Intellectual Property.
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(b) Notwithstanding
any provision in this Agreement to the contrary, Section 8(a) shall
not apply to any Intellectual Property which was developed entirely on the
Executive’s own time without using the Company’s or Douglas’ equipment,
supplies, facilities or trade secret information except for Intellectual
Property that either (i) relates directly at the time of conception or
reduction to practice to the Company’s or Douglas’ business or actual or
demonstrably anticipated research or development, or (ii) results directly
from any work performed by the Executive for the Company, Douglas or any of
their respective Affiliates within the twelve month period immediately
preceding the time of conception or reduction to practice of such Intellectual
Property.
9. Noninterference. While employed by the Company and for a
period of three (3) years after termination of this Agreement, Executive
agrees not to interfere with the business of the Company, Douglas or any of
their respective Affiliates by directly or indirectly soliciting, attempting to
solicit, inducing, or otherwise causing any employee of the Company, Douglas or
any of their respective Affiliates to terminate his or her employment in order
to become an employee, consultant or independent contractor to or for any other
employer.
10. Noncompetition. Executive agrees that during the term of this
Agreement and for a period of three (3) years after the termination
hereof, he will not, without the prior consent of the Company, directly or
indirectly, have an interest in, be employed by, or be connected with, as an
employee, consultant, officer, director, partner, stockholder or joint
venturer, in any person or entity owning, managing, controlling, operating or
otherwise participating or assisting in any business which is in competition
with the business of the Company, Douglas or any of their respective Affiliates
(i) during the term of this Agreement, in any location, and (ii) for
the three year period following the termination of this Agreement, in any
county in which the Company, Douglas or any of their respective Affiliates was
conducting business at the date of termination of Executive’s employment and
continues to do so thereafter; provided, however, that the foregoing shall not prevent the Executive
from being a stockholder of less than 1% of the issued and outstanding
securities of any class of a corporation listed on a national securities
exchange or designated as national market system securities on an interdealer
quotation system by the National Association of Securities Dealers, Inc.
11. Miscellaneous.
(a) Notices. Any notices provided hereunder must be in
writing and shall be deemed effective upon the earlier of two days following
personal delivery (including personal delivery by telecopy or telex), or the
fourth day after mailing by first class mail to the recipient at the address
indicated below:
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To the Company:
Douglas Dynamics Holdings, Inc
c/o Aurora Capital Group
10877 Wilshire Boulevard
Suite 2100
Los Angeles, California 90024
Attention: Richard K. Roeder
Telecopier: (310) 824-2791
To Douglas:
Douglas Dynamics, L.L.C.
7777 North 73rd Street
P.O. Box 245038
Milwaukee, Wisconsin
Attention: Chief Executive Officer
Telecopier: (414) 354-8448
With copies to:
Aurora Capital Group
10877 Wilshire Boulevard
Suite 2100
Los Angeles, California 90024
Attention: Richard K. Roeder
Telecopier: (310) 824-2791
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071-3197
Attention: Bruce D. Meyer, Esq.
Telecopier: (213) 229-7520
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To Executive:
Mark Adamson
N110 W16502 Kings Way
Germantown, WI 53022
or to such other address or to the attention of such other person as
the recipient party will have specified by prior written notice to the sending
party.
(b) Severability. Any provision of this Agreement which is
deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction and subject to this paragraph be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provisions of this Agreement invalid, illegal, or unenforceable in any other
jurisdiction. If any covenant should be
deemed invalid, illegal or unenforceable because its scope is considered
excessive, such covenant shall be modified so that the scope of the covenant is
reduced only to the minimum extent necessary to render the modified covenant
valid, legal and enforceable.
(c) Entire
Agreement. This document constitutes
the final, complete, and exclusive embodiment of the entire agreement and
understanding between the parties related to the subject matter hereof and
supersedes and preempts any prior or contemporaneous understandings,
agreements, or representations by or between the parties, written or oral.
(d) Counterparts. This Agreement may be executed on separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
agreement.
(e) Successors
and Assigns. This Agreement is
intended to bind and inure to the benefit of and be enforceable by Executive,
the Company and Douglas, and their respective successors and assigns, except
that Executive may not assign any of his duties hereunder and he may not assign
any of his rights hereunder without the prior written consent of the Company.
(f) Amendments.
No amendments or other modifications to
this Agreement may be made except by a writing signed by all parties. No amendment or waiver of this Agreement
requires the consent of any individual, partnership, corporation or other
entity not a party to this Agreement.
Nothing in this Agreement, express or implied, is intended to confer
upon any third person any rights or remedies under or by reason of this
Agreement.
(g) Choice
of Law. All questions concerning the
construction, validity and interpretation of this Agreement will be governed by
the laws of the State of Delaware without giving effect to principles of
conflicts of law.
(h) Survivorship. The provisions of this Agreement necessary to
carry out the intention of the parties as expressed herein shall survive the
termination or expiration of this Agreement.
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(i) Waiver. Except as provided herein, the waiver by
either party of the other party’s prompt and complete performance, or breach or
violation, of any provision of this Agreement shall not operate nor be
construed as a waiver of any subsequent breach or violation, and the failure by
any party hereto to exercise any right or remedy which it may possess hereunder
shall not operate nor be construed as a bar to the exercise of such right or
remedy by such party upon the occurrence of any subsequent breach or violation.
(j) Captions. The captions of this Agreement are for
convenience and reference only and in no way define, describe, extend or limit the
scope or intent of this Agreement or the intent of any provision hereof.
(k) Construction. The parties acknowledge that this Agreement
is the result of arm’s-length negotiations between sophisticated parties each
afforded representation by legal counsel.
Each and every provision of this Agreement shall be construed as though
both parties participated equally in the drafting of the same, and any rule of
construction that a document shall be construed against the drafting party
shall not be applicable to this Agreement.
12. Arbitration.
(a) Any
disputes or claims arising out of or concerning the Executive’s employment or
termination by the Company and/or Douglas, whether arising under theories of
liability or damages based upon contract, tort or statute, shall be determined
exclusively by arbitration before a single arbitrator in accordance with the
employment arbitration rules of the American Arbitration Association (“AAA”), except as modified by this
Agreement. The arbitrator’s decision
shall be final and binding on all parties.
Judgment upon the award rendered by the arbitrator may be entered in any
court of competent jurisdiction. In
recognition of the fact that resolution of any disputes or claims in the courts
is rarely timely or cost effective for either party, the Company, Douglas and
Executive enter this mutual agreement to arbitrate in order to gain the
benefits of a speedy, impartial and cost-effective dispute resolution
procedure.
(b) Any
arbitration shall be held in the Executive’s place of employment with the
Company. The arbitrator shall be an
attorney with substantial experience in employment matters, selected by the
parties alternately striking names from a list of five such persons provided by
the AAA office located nearest to the place of employment, following a request
by the party seeking arbitration for a list of five such attorneys with
substantial professional experience in employment matters. If either party fails to strike names from the
list, the arbitrator shall be selected from the list by the other party.
(c) Each
party shall have the right to take the depositions of a maximum of three
individuals, as deemed appropriate by such party. Each party shall also have the right to
propound requests for production of documents to any party and the right to
subpoena documents and witnesses for the arbitration. Additional discovery may be made only where
the arbitrator selected so orders upon a showing of substantial need. The arbitrator shall have the authority to
entertain a motion to dismiss and/or a motion for summary judgment by any party
and shall apply the standards governing such motions under the Federal Rules of
Civil Procedure.
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(d) The
Company, Douglas and Executive agree that they will attempt, and they intend
that they and the arbitrator should use their best efforts in that attempt, to
conclude the arbitration proceeding and have a final decision from the
arbitrator within one hundred twenty (120) days from the date of selection of
the arbitrator; provided, however,
that the arbitrator shall be entitled to extend such 120-day period for a total
of two one hundred twenty (120) day periods.
The arbitrator shall immediately deliver a written award with respect to
the dispute to each of the parties, who shall promptly act in accordance
therewith.
(e) The
Company and/or Douglas shall pay the fees and expenses of the arbitrator. Each party shall pay its own attorney fees
and costs including, without limitation, fees and costs of any experts. However, attorney fees and costs incurred by
the party that prevails in any such arbitration commenced pursuant to this Section 12
or any judicial action or proceeding seeking to enforce the agreement to
arbitrate disputes as set forth in this Section 12 or seeking to enforce
any order or award of any arbitration commenced pursuant to this Section 12
may be assessed against the party or parties that do not prevail in such
arbitration in such manner as the arbitrator or the court in such judicial
action, as the case may be, may determine to be appropriate under the
circumstances. Any controversy over
whether a dispute is an arbitrable dispute or as to the interpretation or
enforceability of this paragraph with respect to such arbitration shall be
determined by the arbitrator.
(f) In
a contractual claim under this Agreement, the arbitrator shall have no
authority to add, delete or modify any term of this Agreement.
(g) In
the event that more than one dispute is submitted to arbitration by the
Company, Douglas or Executive pursuant to any agreement between the Company
and/or Douglas and Executive, including under this Agreement, and one or more
additional agreements to which the Company and/or Douglas and Executive are
parties, all such matters shall be consolidated into a single arbitration
proceeding so as to avoid, to the extent possible, more than one simultaneous
arbitration proceeding between the Company and/or Douglas and Executive.
13. Investment
in the Company. Executive shall have
the opportunity to invest in the Company through Douglas Equity Partners, L.P.,
a Delaware limited partnership, within a reasonable amount of time following
the Effective Date, but in any event, no later than ninety (90) days after the
Effective Date.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date set forth above.
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/s/ Mark Adamson
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Name:
Mark Adamson
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Date:
27 August 2007
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DOUGLAS
DYNAMICS HOLDINGS, INC.
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/s/ Robert McCormick
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By:
Robert
McCormick
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Its:
VP-CFO
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Date:
8/30/07
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