Exhibit 10.1

 

FORM OF AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

Date: September 12, 2019

 

Torotel is pleased to provide you with this letter agreement (this “Agreement”)
setting forth in general the scope and terms of your employment with Torotel. 
This Agreement is intended to reflect our mutual agreements regarding the terms
and conditions of your employment with Torotel, as follows:

 

1.         Employment.  Torotel agrees to employ you as its Vice President of
Finance, Treasurer, and Chief Financial Officer, and you agree to serve Torotel
in such capacity, subject to the terms and conditions hereinafter set forth.

 

2.         Term.  The term of your employment shall be from September 12, 2019
and, if not sooner terminated pursuant to the terms hereof, shall expire on that
date which is three (3) years after the date hereof.:  provided, however, that
on September 30, 2020 and September 30th of each year thereafter, the term shall
automatically extend for one additional year and shall continue in this manner
until the Agreement is terminated as provided in Section 8 hereof.

 

3.         Duties.  You agree that you will serve Torotel faithfully and
diligently and that you will fulfill the lawful directions given to you by
Torotel’s Board of Directors to the best of your ability during your employment,
and that you will devote your full-time efforts and attention to the business of
Torotel, excluding reasonable vacation and sick leave in accordance with Torotel
policies.  Your place of employment will be in the Kansas City metropolitan area
and will involve the normal duties associated with the positions as Vice
President of Finance, Treasurer, and Chief Financial Officer, such duties to
include, but not be limited to Finance,  SEC Reporting, and supervision and
control of other business and affairs of the Corporation.

 

4.         Compensation.  As compensation for services rendered by you to
Torotel, you shall receive from Torotel:

 

(a)        An initial base salary of $13,790.40 per month (“Base Salary”),
payable to you in bi-weekly installments during your employment, subject to
annual adjustments by the Torotel Board of Directors in its sole discretion;

 

(b)        Bonus and stock as determined by the Board of Directors;

 

5.         Employee Benefits.

 

(a)        Medical and Insurance Benefits. You will be entitled to receive all
employee benefits provided to Torotel employees generally from time to time, so
long as and to the extent the same exist.

 

 

(b)       Vacation, Sick Leave and Holidays.  You shall be entitled to vacation,
sick leave and holidays in accordance with Torotel’s policy, as it exists from
time to time.

 

(c)       Restricted Stock Plan.  You shall be entitled to participate in
Torotel’s restricted stock plan, in accordance with the terms of such plan, as
it may be amended from time to time.

 

6.         Confidentiality/Non-Solicitation.

 

(a)        While employed, you will learn important proprietary information
related to Torotel’s business, including, but not limited to, confidential and
proprietary information concerning corporate strategies and planning in the area
of strategic growth.  You acknowledge that the proprietary customer, operations,
financial, and business information that has been or will be learned (i) has
been and will be developed through Torotel’s expenditure of substantial effort,
time and money; and (ii) together with relationships developed with customers
and employees, could be used to compete unfairly with Torotel during the
post-employment period.  Because Torotel’s ability to provide services on a
competitive basis depends, in part, on its proprietary information and customer
relationships, Torotel would not share such information and promote your
relationship with customers if Torotel believed that you would use or disclose
such information or relationships in competition with Torotel, or if Torotel
believed that your relationship with Torotel’s employees or customers would be
used to the detriment of Torotel.

 

(b)        You shall use reasonable efforts to protect Confidential Information
from disclosure.  “Confidential Information” is any and all non-public
information (no matter in what form) relating to Torotel’s intellectual
property, customers, operations, finances, and business that derives value from
not being generally known to others.  It includes, but is not limited to,
technical or non-technical data, formulas, patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial data, or lists of
actual or potential customers or suppliers (including identifying information
about those customers), whether or not reduced to writing.  Confidential
Information includes information disclosed to Torotel by third parties that
Torotel is obligated to maintain as confidential.  Confidential Information may
include information that is not privileged nor a trade secret, but information
that is not privileged and also not a trade secret shall constitute Confidential
Information only for two years after termination of your employment.  You will
not use, except in connection with work for Torotel, and will not disclose
during or after your relationship with Torotel, Torotel’s Confidential
Information.  Upon the termination of your employment, or for any reason or at
any time at Torotel’s request, you will deliver promptly to Torotel all
materials, documents, plans, records, notes, or other papers and any copies in
your possession or control relating in any way to Torotel’s business, which at
all times shall be the property of Torotel.

 

(c)        During your employment and for two years thereafter, you will not
solicit for employment with any individual, corporation, partnership,
association, franchise, unincorporated organization or other entity, any person
who is or was, at any time during the year prior to the date of termination of
your employment, a Torotel employee.

 

 

(d)        Because you will be affiliated with and benefit from Torotel’s name
and good will and relationship with its customers and will have access to
Confidential Information about Torotel’s customers, you will not, while employed
by Torotel, solicit any Torotel customer for the purpose of providing products
or services offered by Torotel, other than on behalf of Torotel.  In addition,
for a period of two years after the termination of your employment, you will not
solicit Customers for the purpose of providing products or services identical to
or competitive with Torotel’s services.  “Customers” are customers of Torotel in
the United States that you, during the year prior to the termination of your
employment, (i) serviced or solicited on behalf of Torotel; (ii) supervised
others servicing or soliciting on behalf of Torotel; or (iii) about whom you had
Confidential Information.

 

7.         Expense Reimbursement.       Torotel will reimburse you for all
reasonable, out-of-pocket expenses, including but not limited to reasonable
travel expenses incurred in the performance of your employment duties under this
Agreement.  Torotel will review and pay such expenses in accordance with its
normal procedures for paying the expenses of employees, including such
documentation requirements as may be adopted from time to time.

 

8.         Termination.

 

(a)        Your employment under this Agreement shall be terminated if you die,
resign voluntarily, retire, voluntarily take another position with another
company requiring a substantial portion of your time, or become disabled under
circumstances in which you would be entitled to benefits under your Torotel
provided long-term disability insurance policy (if any).  In addition, this
Agreement may be terminated (x) by Torotel, at any time and without prior
notice, for “Cause” (as defined below); or (y) by you, at any time and without
prior notice, for “Good Reason” (as defined below).

 

(b)        For purposes of this Agreement, “Cause” means (i) your willful and
continued failure to perform your duties (other than any such failure resulting
from your incapacity due to physical or mental illness), after demand for
substantial performance is delivered to you by Torotel that specifically
identifies the manner in which you have not performed your duties; (ii) the
engaging by you in gross negligence or willful failure to perform a material
duty; or (iii) your conviction of a felony crime.

 

(c)        For purposes of this Agreement, “Good Reason” means (x) a material
breach by Torotel of any provision of this Agreement which is not cured by
Torotel within thirty (30) days’ notice thereof from you; (y) requiring you to
move out of the Kansas City metropolitan area to perform your duties under this
Agreement; or (z) a reduction in the character of your assigned duties or in
your level of work responsibility or conditions or in your level of
compensation.

 

(d)        In the event that you are terminated without Cause prior to the end
of the term of this Agreement, you will receive a lump sum severance payment in
the amount equal to one year of your salary, bonus and benefits (which shall
include the amounts identified in Sections 4(a) and (b) above and Sections 5(a),
(b) and (c) above, together with all bonuses earned and also shall include full
vesting of all of your stock).

 

(e)        In the event of a “Change of Control” (as defined below), if you are
terminated by the Company other than for Cause or if you terminate your
employment for Good Reason, you shall be entitled to receive a lump sum
severance payment in an amount equal to the greater of:  (i) one year of your
salary, bonus and benefits (which shall include the amounts identified in
Sections 4(a) and (b) above and Sections 5(a), (b) and (c) above, together with
all bonuses earned and also shall include full vesting of all of your stock), or
(ii) the amount of your total salary, bonus and benefits for the remaining term
of this Agreement (which shall include the amounts identified in Sections 4(a)
and (b) above and Sections 5(a), (b) and (c) above, together with all bonuses
earned and also shall include full vesting of all of your stock).

For purposes of this Agreement, each of the following events shall constitute a
“Change of Control”:

(1)  A change in stockholder ownership of Torotel, whereby a person or company,
or a group of affiliated persons or companies, acquires a sufficiently large
block of the shares of capital stock of Torotel which, when added to shares of
capital stock previously owned by them and when voted together with the shares
of the capital stock of all other stockholders of Torotel whose proxies or
written consents are solicited by such person, company or group without the
benefit of a management-supported proxy statement at any meeting of the
stockholders of Torotel, would enable such person or company or group of
affiliated persons or companies to elect a majority of the Board of Directors of
Torotel.

(2)  A merger or consolidation of Torotel with and into another company, other
than with or into a wholly-owned subsidiary of Torotel, where:

a.   Torotel is not the surviving company; or

b.   Torotel is the surviving company and the members of the Board of Directors
immediately prior to the merger or consolidation do not constitute a majority of
the Board of Directors of the surviving company after the merger or
consolidation;

(3)  The sale of all or substantially all of the assets of Torotel; or

(4)  Any other kind of a corporate reorganization or takeover where:

a.   Torotel is not the surviving company; or

b.   Torotel is the surviving company and the members of the Board of Directors
immediately prior to the reorganization do not constitute a majority of the
Board of Directors of the surviving company.

(f)        In the event of “Good Reason,” you, in your sole discretion, may (i)
accept the changes and elect to remain with Torotel, or (ii) elect to take a
lump sum severance payment in an amount equal to the greater of:  (A) one year
of your salary, bonus and benefits (which shall include the amounts identified
in Sections 4(a) and (b) above and Sections 5(a), (b) and (c) above, together
with all bonuses earned and also shall include full vesting of all of your
stock),

 

or (B) the amount of your total salary, bonus and benefits for the remaining
term of this Agreement (which shall include the amounts identified in Sections
4(a) and (b) above and Sections 5(a), (b) and (c) above, together with all
bonuses earned and also shall include full vesting of all of your stock).

9.         Miscellaneous.

 

(a)        Interpretation.  The paragraph headings contained herein are for the
purpose of convenience of reference only and are not intended to define or limit
the contents of such paragraphs.  In this Agreement, (i) all gender references
include the feminine and the masculine and (ii) the singular includes the
plural, and the plural the singular.

 

(b)        Severability.  If all or any provision or portion of this Agreement
shall to any extent be held invalid or unenforceable, in whole or in part, by a
court or agency having competent jurisdiction, a valid decision or decree to
which Torotel is a party, then the parties expressly agree to be bound by any
lesser covenant imposing the maximum legal duty permitted by law that is
subsumed within the terms of such covenant, as if the resulting covenants were
separately stated in and made a part of this Agreement, and the remainder of
this Agreement shall remain in full force and effect.

 

(c)        Equitable Relief.  You and Torotel acknowledge and agree that breach
of any of the covenants made by you herein would cause irreparable injury to
Torotel, which could not sufficiently be remedied by monetary damages, and
therefore that Torotel shall be entitled to obtain such equitable relief as
declaratory judgments; temporary, preliminary, and permanent injunctions; and
order of specific performance to enforce those covenants or to prohibit any act
or omission that constitutes a breach thereof.

 

(d)        Amendment.  This Agreement may be altered or amended only by a
writing signed by all parties hereto.  Your employment shall automatically
terminate upon your death.  This Agreement is the final, complete and exclusive
statement and expectation of the agreement between you and Torotel.

 

(e)        Governing Law.  This Agreement shall be construed under and governed
by the laws of the State of Kansas.

 

(f)        No Improper Use of Information or Violation of Agreements with Prior
Employers and Others.  During your employment, you will not improperly use or
disclose any confidential information or trade secrets or violate any
non-competition or other agreement with, any former employer or any other
persons to whom you have an obligation of confidentiality or non-competition. 
You will not bring onto the premises of Torotel any unpublished documents or any
property belonging to any former employer or any person to whom you have an
obligation of confidentiality, unless consented to in writing by that former
employer or person.  You will use in the performance of your duties only
information that is generally known and used by persons with training and
experience comparable to your own, which is common knowledge in the industry or
otherwise legally in the public domain, or which is otherwise provided or
developed by Torotel.

 

 

(g)        Assignment.  You understand that you have been selected for
employment by Torotel on the basis of your personal qualifications, experience
and skills.  Therefore, you shall not assign all or any portion of your
performance under this Agreement.

 

If the foregoing adequately reflects your understanding of our agreement, please
indicate your affirmation by signing the enclosed copy of this Agreement and
returning it to me at the above listed address.

 

 

 

 

 

 

 

 

 

 

 

 

Sincerely,

 

 

 

 

 

TOROTEL, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

The undersigned hereby agrees to the terms of the

 

foregoing Agreement:

 

 

 

 

 

 

[NAME]

 

 

 

Date: