Chief Operating Officer Employment Agreement

EXHIBIT 10.16


EMPLOYMENT AGREEMENT


AGREEMENT, made this 27th day of September, 1989, effective October 2, 1989, by and between Americable, Inc., a Minnesota corporation, having its principal place of business in Eden Prairie, Minnesota, hereinafter referred to as "Employer" or "AMC", and Gary L. Eizenga, residing at 1351 Wild Rose Lane, Lake Forest, Illinois 60045, hereinafter referred to as "Employee" or "Eizenga".
WITNESSETH:
WHEREAS, Employer desires to assure itself of the services of Employee, and to that end desires to enter into an agreement of employment with him, upon the terms and conditions hereinafter set forth;
WHEREAS, Employee wishes to enter into an Employment Agreement with Employer upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties hereto agree as follows:
1. Definitions. For purposes of this Agreement only, the following
terms shall have the meanings hereinafter set forth:
(a) The term "NSU" shall refer to North Star Universal, Inc., a Minnesota corporation, the corporate parent of AMC.
(b) The term "Reference Rate" shall mean the rate of interest publicly announced by the First Bank National Association, St. Paul, Minnesota, as its Reference Rate, as the same may change from time to time.


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2. Employment. Employer agrees to employ Employee, and Employee agrees to accept such employment from Employer, upon the terms and conditions hereinafter set forth.
3. Duties. Employee shall serve in an executive capacity in the Minneapolis, Minnesota metropolitan area and shall be President and Chief Operating Officer of AMC, performing such services as the Chief Executive Officer and the Board of Directors of Employer may from time to time determine, consistent with the ordinary duties associated with the position of President and Chief Operating Officer. Employee shall devote his full time and best efforts to the business of Employer.
4. Term. This Agreement shall be for a term commencing with the effective date of this Agreement, and terminating on December 31, 1994, subject, however, to termination during each year as provided herein.
5. Base Salary. As base compensation to Employee for all services rendered by Employee to Employer commencing on the effective date of this Agreement, Employer agrees to pay Employee an annual Base Salary ("Base Salary") of $140,000.00. Such salary shall be subject to any withholding required by law and shall be payable in equal semi-monthly installments on the 15th and last day of each month, or at such shorter intervals as Employer may adopt. Said salary shall be pro-rated for any partial years covered by this Agreement. At the discretion of Employer, the Base Salary may be increased from time to time.


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6. Annual Bonuses. As additional compensation to Employee during the term of this Agreement, Employer agrees to pay Employee annual bonuses as follows:
(a) For calendar year 1989, Employee shall receive an annual bonus equal to 30% of his Base Salary, pro-rated for the number of days he is employed in 1989.
(b) For calendar years 1990 through 1994, Employee shall receive an annual bonus as follows:
(i) Prior to December 31, 1989, and each subsequent December 31,
through 1993, Employer and Employee shall mutually agree upon a numerical
"Target" with respect to the financial performance of Employer for the
subsequent calendar year, which Target shall be the basis upon which
Employee's annual bonus for the calendar year shall be based.
(ii) Employer shall pay Employee an annual bonus with respect to
the performance of the Employer toward the Targeted amount, as follows:
(A) If Employer's performance reaches the Targeted
amount, Employee's annual bonus shall be thirty (30%) percent of his Base
Salary.
(B) If Employer's performance reaches one hundred twenty
(120%) percent or more of the Targeted amount, Employee's annual bonus
shall be forty (40%) percent of his Base Salary.
(C) If Employer's performance is less than eighty (80%)
percent of the Targeted amount, Employee shall receive no annual bonus.


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(D) If Employer's performance is between eighty (80%)
percent and one hundred (100%) percent of the Targeted amount, Employee
shall be paid an annual bonus on a pro rata basis with a bonus of twenty
(20%) percent of Employee's Base Salary being paid for Employer
performance of eighty (80%) percent of Targeted amount, and thirty (30%)
percent of Employee's Base Salary being paid as a bonus for performance of
one hundred (100%) percent of the Targeted amount.
(E) If Employer's performance is between one hundred
(100%) percent and one hundred twenty (120%) percent of the Targeted
amount, then Employee shall be paid an annual bonus on a pro rata basis
with an annual bonus of thirty (30%) percent of Employee's Base Salary
being paid for Employer's performance at one hundred (100%) percent of the
Targeted amount, and forty (40%) percent of Employee's Base Salary being
paid as an annual bonus for Employer's performance of one hundred twenty
(120%) percent of the Targeted amount.
(c) Annual bonuses shall be payable without interest 90 days after each calendar year end.
(d) Bonuses payable pursuant to this paragraph will be paid on a pro-rata basis for any partial years at the termination of this Agreement. Said bonuses shall be paid 90 days after the end of any partial year.


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(e) Bonuses shall be paid pursuant to this paragraph only so long as Employee is employed pursuant to this Agreement. If Employee terminates his employment without cause, then any bonuses accrued for the year in which Employee terminates his employment will be forfeited. Any bonus payable to Employee shall not be forfeited if Employee's employment terminates on account of death, disability, termination by Employer without cause, or termination by Employee for cause; bonuses payable pursuant to this sentence shall be paid on a pro-rata basis for the year involved.
7. Stock Option Agreement. Employees shall be granted an option to purchase 2.5% of the Employer's common stock outstanding on the effective date of this Agreement at its then book value per share, pursuant to the terms of a Stock Option Agreement, as attached hereto as Exhibit A, and incorporated herein by reference.
8. Severance Pay Provisions.
(a) If Employer terminates Employee without cause, or if Employee terminates this Agreement with cause at any time, then as severance pay, Employee shall receive his monthly Base Salary during each of the 18 months immediately following termination, plus a pro-rata share of his annual bonus accrued up to the date of termination. Said pro-rata bonus will be paid to Employee, without interest, ninety (90) days after the end of the calendar year in which accrued.


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(b) If Employee terminates this Agreement without cause, or Employer terminates this Agreement with cause, Employee shall receive no severance pay, and shall forfeit any accrued annual bonus for the year of termination. Said pro-rata bonus will be paid to Employee without interest ninety (90) days after the end of the calendar year in which accrued.
9. Additional Benefits and Working Facilities.
(a) Employer shall furnish Employee with all equipment, office space, secretarial help, and such other items relating to his employment as are determined useful and necessary by Employer and which are customary for the duties of Employee.
(b) Employee shall participate in the NSU flex benefits plans which NSU shall offer to employees of Employer during the term of this Agreement. Employee and his dependents may participate in such plans on the same basis as all other employees of Employer and NSU. Generally, such plans provide coverage for eligible health care expenses which are paid at reasonable and customary rates, as further stipulated in the plan documents.
(c) Employee will be entitled to four (4) weeks annual vacation.
(d) Employer shall reimburse Employee for all reasonable expenses incurred by Employee in connection with Employer's business, including, but not limited to, expenses of travel and entertainment, upon presentation of itemized statements therefor. In the event any such expense is disallowed to the Employer as


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a deduction for income tax purposes by any taxing authority, Employee shall forthwith pay to Employer an amount equal to the income tax cost to the Employer for such disallowance.
(e) Employer shall pay Employee Forty Thousand and No/100ths ($40,000.00) Dollars as a relocation allowance. Employee shall receive Ten Thousand and No/100ths ($10,000.00) Dollars of this allowance upon the execution of this Agreement. The balance of this allowance shall be paid periodically upon the presentation to Employer of itemized receipts for relocation expenses. To the extent that Employee has not incurred all relocation expenses within 30 days of his commencement of Employment, the unpaid balance of the relocation allowances shall be paid to Employee 30 days after the commencement of his employment.
10. Events of Termination. This Agreement shall terminate as follows:
(a) On December 31, 1994;
(b) By mutual written agreement of the parties;
(c) Upon the death of Employee;
(d) At the option of Employee, with respect to a cause under the control of Employer, upon one month's written notice by Employee to Employer, with Employer having one month to correct said cause. "Cause" shall be defined as a breach of the terms of this Agreement by Employer; or


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(e) At the option of Employer, only upon the occurrence (or afterwards) of any of the following events any one of which shall be considered as termination "for cause":
(i) If Employee shall continue to materially neglect his duties or
devote a substantial portion of his time or attention to other interests
during normal working hours thirty (30) days after Employee receives
advance written notice from Employer to correct such neglected duty or
devotion of time to such other interests;
(ii) The conviction of Employee of any crime punishable as a
felony;
(iii) Upon the expiration of six (6) consecutive months of continued
disability after the certification by a Physician of physical or mental
disability of Employee to such an extent that he is unable to carry on a
substantial portion of his usual and customary duties.
11. Confidential Information. Employee shall not at any time, either during Employee's employment or after the termination of such employment, divulge to others or use for Employee's own benefit any proprietary or confidential information or trade secrets of Employer obtained during the course of employment with Employer relating to sales, technology, formulas, processes, methods, machines, manufacturers, compositions, ideas, improvements, or inventions belonging to or relating to the Employer, its clients, subsidiaries, affiliates, successors or associated companies.


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12. Property of the Employer. All memoranda, notes, records, papers, inventions, and other documents, items and all copies thereof relating to the Employer and its operation of business and all objects related thereto are and remain the property of the Employer including, but not limited to, those developed, investigated or considered by the Employer; provided however, that Employee shall remain the owner of any invention for which no equipment, supplies, or trade secret information of the Employer was used and which was developed entirely on Employee's own time, and;
(a) Which does not relate (1) directly to the business of the
Employer or (2) to the Employer's actual or demonstrably anticipated
research or development; or
(b) Which does not result from any work performed by Employee for the Employer.
13. Covenant Not to Compete. As additional consideration for this Agreement, Employee hereby covenants and agrees that during his full or part time employment by Employer and for three years thereafter, whether Employee's termination of employment is the result of discharge or otherwise, provided that Employer is not in default to Employee under the terms hereof, Employee shall not within the continental United States directly or indirectly:
(a) Enter into or engage (i) in the business of manufacturing,
selling, or distributing computer cables, connectors or related computer
accessories, or


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(ii) in the business of providing services, including contract computer
maintenance, depot computer repair, and computer refurbishment and
reconfiguration, either as an individual for his own account, or as a
partner or joint venturer, or as an employee, agent, or salesman for any
person, or as an officer or director of a corporation or otherwise,
provided, however, that nothing prohibited by this covenant shall apply to
me health care industry as it relates to the distribution of products not
related to computer cables, connectors or related computer accessories.
Nothing herein shall prevent Employee from buying and owning shares of
stock of any corporation that may be deemed to compete with Employer,
except that if such stock is not listed on any national or local exchange
at the date ...