Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is entered into as of August 28, 2017
(the “Effective Date”) by and between Sarah Lauber, an individual (“Executive”),
and Douglas Dynamics, L.L.C., a Delaware limited liability company (the
“Company”).

 

1.             Employment by the Company.

 

(a)           Full Time and Best Efforts. Subject to the terms set forth herein,
the Company agrees to employ Executive as its Chief Financial Officer 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 and corporations that control, are
controlled by or are under common control with the Company, as the case may be,
and to successor entities and assignees of the Company, as the case may be (the
“Affiliates”) as the Company may from time to time reasonably request and shall
be consistent with the duties Executive is to perform for the Company and with
Executive’s experience. During the term of her employment with the Company,
Executive will devote her full business time and use her best efforts to advance
the business and welfare of the Company, 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 that would interfere with her duties
hereunder.

 

(b)           Duties. Executive shall serve in an executive capacity and shall
perform such duties as are customarily associated with her position, consistent
with the Bylaws of the Company, 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.

 

2.             Compensation and Benefits.

 

(a)           Base Salary. Executive shall receive for services to be rendered
hereunder a salary at the rate of $360,000 per year, payable in biweekly
payments of $13,846.15 and subject to payroll deductions as may be necessary or
customary in respect of the Company’s salaried employees (the “Base Salary”).
The Base Salary will be reviewed by and shall be subject to increase (but not
decrease) at 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, disability,
401(k) retirement savings plan or similar plan or program of the Company now
existing or established hereafter to the extent that she 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 to any
of its executives at such Executive’s level.  Executive shall initially be
eligible for three weeks of vacation time for the period from the Effective Date
to the date Executive enters the standard vacation schedule applicable to
executives of the Company at such Executive’s level.  Notwithstanding anything
otherwise provided under this Agreement, nothing contained herein shall obligate
the Company or its Affiliates to continue or maintain any particular benefit
plan or program on an ongoing basis.

 

3.             Bonus.

 

(a)           Annual Incentive Plan. Executive shall be eligible to participate
in the Company’s Annual Incentive Plan, through which the Company awards
performance-based cash bonuses on an annual calendar year basis provided the
Company achieves performance targets established by the Company’s management and
approved by the Compensation Committee of the Board for such calendar year. The
Executive shall be eligible to participate at a target bonus level of 75% of her
Base Salary.  Executive’s participation in such plan shall be governed by the
terms and conditions of the plan as then in effect. For calendar year 2017,
Executive shall be eligible to participate in the Annual Incentive Plan on a pro
rata basis for the portion of such calendar year that Executive was employed by
the Company.

 

(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) only if the Board, in its sole and absolute discretion, elects
to pay a pro rata part of the performance-based bonus to Executive.

 

(c)           Stock Incentive Plan.  Executive shall be eligible to participate
in the Company’s 2010 Stock Plan, through which the Company grants equity awards
to its key employees, pursuant to the separate terms and conditions of the 2010
Stock Plan.  For calendar year 2017, Executive shall be eligible to participate
in the Company’s 2010 Stock Plan at 75% of Executive’s Base Salary, prorated for
the portion of such calendar year that Executive was employed by the Company. 
For calendar years 2018 and following, Executive shall be eligible to
participate in the Company’s 2010 Stock Plan at 75% of Executive’s Base Salary. 
Any grants made to the Executive under the 2010 Stock Plan shall be subject to
the terms and conditions of such plan and any applicable award agreements.

 

--------------------------------------------------------------------------------

 

4.             Reasonable Business Expenses and Support. Executive shall be
reimbursed for documented and reasonable business expenses in connection with
the performance of her duties hereunder, including appropriate professional fees
and dues. Executive shall be furnished reasonable office space, assistance,
including an administrative assistant and facilities.

 

5.             Termination of Employment. The date on which Executive’s
employment by the Company 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 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 this event shall be the date upon
which notice of termination is given. The Company 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 her material obligations hereunder which remains uncured
after the lapse of 30 days following the date that the Company has given
Executive written notice thereof; (b) a material breach by the Executive of her
duty not to engage in any transaction that represents, directly or indirectly,
self-dealing with the Company or any of its 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 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 or any of its 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 or its 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 her capacity as an
officer or employee of the Company or its Affiliates.

 

(b)           Termination by Executive.

 

(i)            Executive shall have the right, at her election, to terminate her
employment with the Company by written notice to the Company to that effect if
(A) the Company 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, the
Company 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 repeatedly commits a Material Breach as to which at least two
(2) written notices have been given pursuant to this Section 5(b)(i). If the
Executive terminates her employment with the Company pursuant to this
Section 5(b)(i), then the Executive shall be entitled to receive the benefits
provided in Section 5(d)(i) hereof.

 

(ii)           Executive shall have the right, at her election, to terminate her
employment with the Company 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 5(b)(ii), the Company shall have no termination payment
requirements 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 may terminate Executive’s
employment in the event Executive suffers a disability that renders Executive
unable to perform the essential functions of her 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 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.

 

(d)           Termination by Company Without Cause; Termination by Executive
Pursuant to Section 5(b)(i). The Company 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.

 

2

--------------------------------------------------------------------------------

 

(i)            Termination Payments. In the event that Executive’s employment is
terminated by the Company without Cause or by Executive pursuant to
Section 5(b)(i) hereof, the Company shall pay Executive as severance an amount
equal to twelve (12) months of her 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)           The Company shall not be obligated to pay any termination
payments under Sections 5(d)(i) above if Executive breaches in any material way
the provisions of the Confidentiality Agreement (as defined 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
(i) as required by law (e.g., COBRA health insurance continuation election) or
(ii) in the event of a termination described in Section 5(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 and (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.

 

(g)           Termination Upon Retirement. Executive shall provide notice to the
Company of her 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 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.

 

(h)           Duty to Mitigate; Termination of Severance Benefits. Executive
agrees that upon any termination pursuant to either of Section 5(b) or
5(d) hereof, Executive shall have a duty to mitigate her 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 the Confidentiality Agreement; provided, however, that if
Executive breaches in any material way the provisions of the Confidentiality
Agreement, the Company shall not be obligated to pay any such severance benefits
in accordance with Section 5(d)(ii) above.

 

6.             Confidentiality and Noncompetition Agreement. Executive and the
Company hereby acknowledge that, as of the date hereof, Executive and the
Company have entered into a separate Confidentiality and Noncompetition
Agreement governing matters related to confidential information, noncompetition,
nonsolicitation of employees and assignment of inventions, among others, in
connection with Executive’s employment with the Company (the “Confidentiality
Agreement”).  Executive and the Company hereby ratify the terms of the
Confidentiality Agreement and hereby agree that, notwithstanding the execution
of this Agreement or the provisions of Section 7(c), the Confidentiality
Agreement shall remain in full force and effect in accordance with the terms and
conditions set forth therein.

 

7.             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 facsimile), or the fourth day after
mailing by reputable overnight courier or registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

 

To the Company:

 

Douglas Dynamics, L.L.C.

7777 North 73rd Street

Milwaukee, Wisconsin 53223

Attention: Chief Executive Officer

Facsimile: (414) 354-5939

 

3

--------------------------------------------------------------------------------

 

With a copy to:

 

Foley & Lardner LLP
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Jay O. Rothman
Facsimile: (414) 297-4900

 

To Executive:

 

Sarah Lauber
541 East Erie Street Unit 207
Milwaukee, Wisconsin 53202
Facsimile: (           )               —

 

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, together with the Confidentiality
Agreement, 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 their
respective successors and assigns, except that Executive may not assign any of
her duties hereunder and she may not assign any of her 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.

 

(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.

 

4

--------------------------------------------------------------------------------

 

8.             Arbitration.

 

(a)           Any disputes or claims arising out of or concerning the
Executive’s employment or termination by the Company, 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 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.

 

(d)           The Company 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 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 8 or any judicial action or proceeding seeking to enforce the
agreement to arbitrate disputes as set forth in this Section 8 or seeking to
enforce any order or award of any arbitration commenced pursuant to this
Section 8 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 or Executive pursuant to any agreement between the
Company and Executive, including under this Agreement, and one or more
additional agreements to which the Company 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 Executive.

 

9.             409A Compliance.

 

(a)           The parties agree that this Agreement is intended to comply with
the requirements of Section 409A of the Code and the regulations and guidance
promulgated thereunder (“Section 409A”) or an exemption from Section 409A.  The
Company shall undertake to administer, interpret, and construe this Agreement in
a manner that does not result in the imposition on Executive of any additional
tax, penalty, or interest under Section 409A, provided, however, that Executive
understands and agrees that the Company shall not be held liable or responsible
for any taxes, penalties, interests or other expenses incurred by Executive on
account of non-compliance with Section 409A.

 

5

--------------------------------------------------------------------------------

 

(b)           A termination of employment shall not be deemed to have occurred
for purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.”  If Executive is deemed on the date of
termination to be a “specified employee” within the meaning of that term under
Section 409A(a)(2)(B) of the Code, then with regard to any payment or the
provision of any benefit that is considered deferred compensation under
Section 409A payable on account of a “separation from service,” and that is not
exempt from Section 409A as involuntary separation pay or a short-term deferral
(or otherwise), such payment or benefit shall be made or provided at the date
which is the earlier of (i) the expiration of the six (6)-month period measured
from the date of such “separation from service” of Executive or (ii) the date of
Executive’s death (the “Delay Period”).  Upon the expiration of the Delay
Period, all payments and benefits delayed pursuant to this Subsection
9(b) (whether they would have otherwise been payable in a single sum or in
installments in the absence of such delay) shall be paid or reimbursed to
Executive in a lump sum without interest, and any remaining payments and
benefits due under this Agreement shall be paid or provided in accordance with
the normal payment dates specified for them herein.

 

(c)           With regard to any provision herein that provides for
reimbursement of costs and expenses or in-kind benefits, except as permitted by
Section 409A, all such payments shall be made on or before the last day of
calendar year following the calendar year in which the expense occurred.

 

[Signature page follows]

 

6

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date set forth above.

 

 

 

/s/ Sarah Lauber 

 

By: Sarah Lauber

 

Date:

August 14, 2017

 

 

 

 

 

 

DOUGLAS DYNAMICS, L.L.C.   

 

 

 

 

 

/s/ James L. Janik

 

By:

James L. Janik

 

Its:

Chairman President & CEO

 

Date:

August 11, 2017

 

[Signature page to Employment Agreement]

 

--------------------------------------------------------------------------------