Exhibit 10.38
November 20, 1998 [TONE'S LOGO]
Mr. Robert MacPherson
518 Nantucket Pointe Drive
Grover, MO 63040
Dear Robert:
It gives me great pleasure to offer you the position of Vice President and
Chief Financial Officer of Tone Brothers Incorporated with your employment date
being on or about January 4, 1999 or sooner. This position is based in Ankeny,
IA and reports directly to me. This offer is contingent upon your successfully
passing a company physical, including a drug screen, and the following terms
and conditions:
COMPENSATION: Your direct annualized compensation will be $160,000 paid
semi-monthly, as an exempt, full-time employee. You will be required to achieve
performance standards specified in the written Position Description (which may
be varied over time) and as determined through the Company's performance
appraisal process.
You will be eligible for an annual bonus of up to 30% based upon the
achievement of agreed annual performance objectives through each June 30. The
bonus will be determined on the basis of Company and individual achievement of
specific job goals, with your first bonus prorated based upon your employment
date. Also, per our agreement, you will receive a $50,000 signing bonus to
compensate you for the remuneration that you are giving up by leaving your
current company to work for Tones. In addition you will be paid an additional
$30,000 on July 1, 1999. If your employment ends for any reason other than
resignation, or termination for gross misconduct or willful negligence, you
will receive the remaining payment mentioned above upon termination.
OTHER BENEFITS: Coverage for group healthcare insurance, i.e. medical, dental,
life insurance, AD&D, Short and Long Term Disability, etc. as well as the
Company sponsored pension plan and 401(k) savings plan will be provided in
accordance with the terms and conditions of each Plan. You will receive a
Summary Plan Description for each Plan.
VACATION: You will receive 4 weeks annual paid vacation. You will also receive
holidays in accordance with the Tone Brothers Inc. holiday schedule.
MOVING ASSISTANCE: Relocation assistance will be provided as follows: (1) The
cost of transporting your household goods to the Ankeny, IA area, including
packing and unpacking. Authorized household goods and exclusions are specified
on Attachment A. As an employee receiving relocation benefits you
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MacPherson, November 20, 1998
will be required to sign an Employee Reimbursement Agreement (attached) before
any relocation benefits are incurred.
It will require you to reimburse the Company, according to the schedule on the
agreement, for relocation expenses incurred on your behalf, if you voluntarily
terminate employment prior to twelve (12) months from the date of your household
goods move. In addition, the company will pay for your Real Estate commission on
the sale of your existing house up to a maximum of 7%, and closing costs on the
purchase of a new house as written in the attached schedule.
(2) Temporary living expenses: Sixty (60) days temporary living expenses at The
Maples in Ankeny, IA - furnished apartment with paid utilities or similar
accommodations if The Maples in unavailable.
The Company will reimburse you for federal, state and local taxes due on the
relocation expenses we provide that are not deductible for tax purposes.
HOUSEHUNTING TRIP: You and one relative/spouse will be allowed two trips to the
new location for the purpose of finding a new home. Generally, the trips will
not exceed a total of 4 days. Reimbursable expenses include travel, lodging,
meals and local transportation (not to exceed $175 per day).
INITIAL EMPLOYMENT TERM: The term of employment covered by this offer shall be
two years from the date of the commencement of your employment with the Company.
Following the expiration of this two year term, any continued employment with
the Company shall thereafter be governed by the policies then applicable to the
employment of executive officers of the Company, except as otherwise
specifically provided for herein or hereafter mutually agreed to in writing.
TERMINATION PRIOR TO EXPIRATION OF TWO YEARS. In the event that your employment
terminates prior to the end of two years from its commencement for any reason
other than resignation, death, disability, or termination for gross misconduct
or willful negligence, you will receive the following notice of termination or
pay in lieu of notice as follows:
If termination should occur at any time prior to the end of the two
year term, then you shall receive notice equal to the remaining
balance of the two year term or pay in lieu notice, however, that in
no event, shall the notice period be less than six months or pay in
lieu thereof. If after being given notice of termination, you are
relieved by the Company from your duties during all or any part of the
notice period, you shall continue to receive pay for whatever
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MacPherson, November 20, 1998
part of the foregoing provided for notice period during which are not
required to work.
CONFIDENTIALITY: It is a requirement of your employment that you will observe
and maintain secrecy and confidentiality of information relating to the Company
including information concerning processes, supply sources, operations,
procedures and transactions or any information (written or oral) which is not
publicly available. Neither during employment with the Company or after
termination of employment for any reason except as required in the ordinary
course of your duties with the Company or by law, will you utilize or divulge
for your personal benefit or the benefit of any other person or organization
such information which you may have acquired as a result of your employment with
the Company in any manner which may cause loss or be calculated to injure or
cause loss to the Company. The obligations of this provision shall survive the
two year term of employment set forth above and shall remain in effect during
and after your employment with the Company.
NONCOMPETITION: During employment with the Company or within a period of six
months after the termination of such employment, you will not, directly or
indirectly, whether as an employee, officer, director, independent contractor,
consultant, stockholder, partner, principal or otherwise, engage in or assist
others to engage in or have any interest in any business, firm, company,
corporation, partnership or entity of any kind whatsoever which competes with
the Company in any country or other geographic area or jurisdiction in which
the Company holds a valid patent and markets or has marketed products during
the year prior to the termination of employment.
During employment with the Company or within a period of six months after the
termination of such employment, you will not entice or attempt to entice away
from the Company the business of any supplier to, or customer of, the Company
for your own advantage or the advantage of any other person or organization.
The obligations of this provision shall survive the two year term of employment
set forth above and shall remain in effect during any employment with the
Company and for six months following the termination of employment.
REMEDIES FOR BREACH OF CONFIDENTIALITY AND/OR NONCOMPETITION PROVISIONS: In
accepting this employment you acknowledge and agree that your violation of the
foregoing CONFIDENTIALITY and/or NONCOMPETITION provisions would produce severe
damage and injury to the Company which would be irreparable in nature
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MacPherson, November 20, 1998
and would entitle the Company to preliminary and permanent injunctive relief in
addition to all other remedies available to the Company in law or in equity.
As a condition of employment, you also must execute and return the attached
Invention and Secrecy Agreement.
If you accept this offer of employment on the terms and conditions set forth
above, please so acknowledge by signing and initialing each page of the
original of the this letter and returning it along with the signed Invention
and Secrecy Agreement to Rob Anderson Director of Human Resources. Please
retain the enclosed duplicates for your records.
I would like to take this opportunity to welcome you aboard as a new member of
Tone Brothers, Inc. team and look forward in working with you meeting the many
challenges ahead. I am sure that your association with our company will be both
rewarding and satisfying.
Sincerely,
/s/ Mark Knotts
Mark Knotts
President, Tone Brothers Inc.
ACKNOWLEDGEMENT OF AGREEMENT AND ACCEPTANCE:
I accept this offer of employment as the Vice President and Chief Financial
Officer of Tone Brothers, Inc. upon the terms and conditions set forth above.
Signed: /s/ Robert MacPherson Date: 12/4/98
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Robert MacPherson
ATTACHMENT A
ROBERT MACPHERSON
APPROVED REIMBURSABLE CLOSING COSTS
Loan Origination Fees, Placement or discount Fees, not to exceed 3% of the new
mortgage.
Title Search and insurance.
Inspection costs, not to exceed $300.00 and any other legally required
inspection costs are also covered.
Legal fees.
Transfer Recording Fees.
Application fee, Credit fee, Appraisal fees.