Exhibit 10.3
EMPLOYMENT AGREEMENT
AGREEMENT, made and entered into as of the ___ day of _______, 1997, by
and between Peach Auto Painting and Collision, Inc., a Delaware corporation (the
"Company"), and Xxxxxxx X. Xxxxxxxx, Xx., a resident of Columbus, Georgia (the
"Employee").
W I T N E S S E T H :
WHEREAS, the Company desires to obtain the services of Employee, for
its own benefit and for the benefit of any existing and future Affiliated
Company (defined as any corporation or other business entity that directly or
indirectly controls, is controlled by, or is under common control with the
Company), and Employee desires to secure employment from the Company upon the
following terms and conditions;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree that the following provisions
shall constitute their agreement of employment:
1. Employment. The Company hereby employs the Employee, and the
Employee hereby accepts employment with the Company, for the term set forth in
Section 2 below, in the position and with the duties and responsibilities set
forth in Section 3 below, and upon the other terms and conditions hereinafter
stated.
2. Period of Employment. The term of this Agreement (the "Period of
Employment") shall commence on the date the Company completes an initial public
offering of its common stock (the "Commencement Date") and, unless otherwise
terminated as hereinafter provided, shall continue for three (3) years. In the
event that this Agreement expires and a new written agreement is not entered
into by the parties, the provisions of Sections 9, 10, and 11 of this Agreement
will apply with respect to any continued employment of the Employee by the
Company or by any successor to the business of the Company.
3. Position; Duties; Extent of Services.
(a) Duties; Position. The Employee shall serve initially as
President and Chief Executive Officer of the Company, and he shall
have such title, responsibilities, duties and authorities and shall
perform such services of an executive character as shall be designated
from time to time by the Board of Directors of the Company. The Company
shall retain full direction and control of the means and methods by
which Employee performs the above services and of the place(s) at which
such services are to be provided.
(b) Other Activities. Except upon the prior written consent of
the Board, Employee, during the Period of Employment, will not (i)
accept any other employment, or (ii) engage, directly or indirectly, in
any other business activity (whether or not pursued for pecuniary
advantage) that is or may be competitive with, or that might place him
in a competing position to that of the Company or any Affiliated
Company with respect to the operation or management of any production
auto painting or auto collision repair facility or other similar
business.
4. Compensation. In consideration of the services to be rendered by the
Employee to the Company and in consideration of the Employee's other covenants
hereunder, the Employee will receive a base salary at the rate of $150,000 per
year, payable at such intervals as may be established by the Company from time
to time for salary payments to its management employees. The Employee shall
receive such salary increases and/or bonuses as the Board of Directors of the
Company may from time to time approve in its discretion. In no event, however,
will the Employee's gross annual salary be less than $150,000. The Employee
shall also be entitled to participate in such incentive compensation plans as
the Company may from time to time maintain for its executive employees generally
and as described at Section 5 hereof.
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5. 1996 Comprehensive Stock Option Plan. The Company has established
and the Employee will participate in the Peach Auto Painting and Collision 1996
Comprehensive Stock Option Plan (the "Plan").
6. Employee Benefits. The Employee will be entitled to participate, in
accordance with the provisions thereof, in the employee benefit plans made
available by the Company to its employees generally. In the event of the death
or total disability of the Employee, the Employee or his estate or beneficiaries
shall also be entitled to benefits in accordance with Section 8 hereof.
7. Business Expense Reimbursements. During the period of his employment
under this Agreement, the Employee will be entitled to reimbursement for all
reasonable, out-of-pocket expenses incurred by him in performing services
hereunder, provided that such expenses are incurred in accordance with the
applicable policies of the Company. The Employee shall be entitled to such
reimbursement upon presentation by the Employee, from time to time, of an
itemized account of such expenses and appropriate documentation therefor.
8. Termination of Employment.
(a) Death. In the event of the death of the Employee during
his employment under this Agreement, the following payments shall be
made to the Employee's designated beneficiary, or, in the absence of
such designation, to the estate or other legal representative of the
Employee: (i) his base salary for the month in which his death occurs,
and (ii) such bonuses (if any) as have been earned by the Employee and
not paid to him at the time of his death. Any rights and benefits the
Employee or his estate or any other person may have under employee
benefit plans and programs of the Company generally in the event of the
Employee's death shall be determined in accordance with the terms of
such plans and programs. Except as provided in this Section 8, neither
the Employee's estate nor any other person shall have
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any rights or claims against the Company in the event of the death of
the Employee during his employment hereunder.
(b) Long-Term Disability. In the event of the Employee's
disability (as hereinafter defined) during his employment under this
Agreement, the Period of Employment may be terminated by the Company.
For the first six months following termination of employment due to
disability, the Employee shall be paid his base salary at the rate in
effect at the time of the commencement of disability. Thereafter, the
Employee shall be entitled to benefits in accordance with and subject
to the terms and provisions of the Company's long-term disability plan
for senior management employees, as in effect at the time of the
commencement of disability. For purposes of this Agreement,
"disability" shall mean that Employee cannot perform the main duties of
his regular business activity with the Company at the time of the
disability due to illness or disease or injury and, at the time of the
disability, the Employee is receiving care from a licensed physician,
unrelated to the Employee, for the condition causing the disability
within the scope of such physician's license. Anything herein to the
contrary notwithstanding, if, during the six-month period following a
termination of employment under this Section 8 in which salary
continuation payments are payable by the Company, the Employee becomes
reemployed or otherwise engaged (whether as an employee, partner,
consultant, or otherwise), any salary or other remuneration or benefits
earned by him from such employment or engagement shall offset any
payments due him under this Section 8. In the event of the Employee's
disability, any rights and benefits the Employee may have under
employee benefit plans and programs of the Company generally shall be
determined in accordance with the terms of such plans and programs.
Upon termination of the Employee's employment by reason of disability
under this Section 8, the Employee shall be entitled, in
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addition to the other payments provided for in this Section 8,
to payment of such bonuses (if any) as may have been earned by
the Employee and not paid to him at the time of such
termination. Except as provided in this Section 8, neither the
Employee nor his estate, or any other person, shall have any
rights or claims against the Company in the event of the
termination of the Employee's employment by reason of
disability.
(c) Termination for Cause. Nothing herein shall prevent the
Company from terminating the Period of Employment for Cause (as
hereinafter defined). Upon termination for Cause, the Employee shall
receive his base salary only through the date of termination, and
neither the Employee nor any other person shall be entitled to any
further payments from the Company, for salary, unpaid bonuses or any
other amounts. Any rights and benefits the Employee may have under
employee benefit plans and programs of the Company generally following
a termination of the Employee's employment for Cause shall be
determined in accordance with the terms of such plans and programs. For
purposes of this Agreement, termination for Cause shall mean (i)
termination due to (y) willful or gross neglect of duties for which
employed, or (z) willful misconduct in the performance of duties for
which employed, in either such instance so as to cause material harm to
the Company, all such facts to be determined in good faith by the Board
of Directors of the Company, (ii) termination due to the Employee's
committing fraud, misappropriation or embezzlement in the performance
of his duties as an employee of the Company, or (iii) termination due
to the Employee's committing any felony for which he is convicted and
which, as determined in good faith by the Board of Directors of the
Company, constitutes a crime involving moral turpitude.
(d) Termination by the Company Other than for Cause. Except
for a termination following a Change in Control as provided at Section
11 hereof, notwithstanding any other
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term or provision of this Agreement, the Company may terminate the
Period of Employment at any time and for whatever reason it deems
appropriate, or for no reason. In the event such termination by the
Company occurs, including an election not to renew this Agreement under
the provisions of Section 2 hereof, and is not due to disability as
provided in Section 8(b) above or for Cause as provided in Section 8(c)
above, the Employee shall be entitled to payment of his base salary, at
the rate in effect at the time of such termination, for the period
ending the earlier of three months following the third anniversary of
the Commencement Date, or the expiration of six months from the date of
such termination; provided, however, that such salary continuation
payments shall cease in the event of the Employee's death prior to
completion of such payments. In the event of a termination of the
Employee's employment under this Section 8(d) after this Agreement has
expired, and in the event that a new written agreement is not entered
into by the parties, the Employee shall receive his base salary for
each of the succeeding six months following such termination. The
Employee shall also be entitled to such bonuses (if any) as have been
earned by the Employee and not paid to him at the time of such
termination. Following a termination of his employment by the Company
under the circumstances described above in this Section 8(d), the
Employee will make reasonable efforts to find other employment and,
upon his becoming reemployed or otherwise engaged (whether as an
employee, partner, consultant, or otherwise), any salary or other
remuneration or benefits accruing to him from such other employment or
engagement shall offset any salary continuation payments due him under
this Section 8. Any rights and benefits the Employee may have under
employee benefit plans and programs of the Company generally following
a termination of the Employee's employment under the circumstances
described in this Section 8(d) shall be determined in accordance with
the terms of such plans and
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programs. Except as provided in this Section 8(d), neither the Employee
nor any other person shall have any rights or claims against the
Company by reason of the termination of the Employee's employment under
the circumstances described in this Section 8(d).
(e) By Employee For Good Reason. Employee may terminate,
without liability, the Period of Employment for Good Reason (as defined
below) upon ten (10) days' advance written notice to the Company. The
Company shall pay Employee the compensation to which he is entitled
pursuant to Section 4 through the date of termination and thereafter
all obligations of the Company hereunder shall terminate. Good Reason
shall exist if: (i) there is an assignment to Employee of any duties
materially inconsistent with or which constitute a material change in
Employee's position, duties, responsibilities, or status with the
Company, or a material change in Employee's reporting responsibilities,
title, or offices; or removal of Employee from or failure to re-elect
Employee to any of such positions, except in connection with the
termination of the Period of Employment for Cause, or due to
disability, retirement, death, or termination of the Period of
Employment by Employee other than for Good Reason; (ii) there is a
reduction by the Company in Employee's annual salary then in effect; or
(iii) the Company acts in any way that would have a disproportionately
material adverse effect on Employee's participation in or
disproportionately and materially reduce Employee's benefit under any
benefit plan of the Company in which Employee is participating or
deprive Employee of any material fringe benefit enjoyed by Employee
when compared to other executives of the Company.
(f) Voluntary Termination by the Employee. At any time,
Employee may terminate, without liability, the Period of Employment for
any reason, by giving thirty (30) days' advance written notice to the
Company. If Employee terminates his employment
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pursuant to this Section 8(f), the Company shall have the option, in
its complete discretion, to terminate Employee immediately without the
running of the notice period. The Company shall pay Employee the
compensation to which he is entitled pursuant to Section 4 through the
end of the notice period, or, if elected, through the day upon which
early termination is elected pursuant to the foregoing sentence, and
thereafter all obligations of the Company hereunder shall terminate.
9. Covenants Not to Compete.
(a) Except as provided in Section 8(d) with regard to a
termination of the Period of Employment by the Company other than for
Cause, the Employee promises and agrees that, until the expiration of
one year following the termination or expiration of the Period of
Employment, he will not for himself or any third party, directly or
indirectly (i) engage in the operation or management of any production
auto painting or auto collision repair facility or other similar
business in any of the states in which the Company is engaged in
business at the time of such termination, or (ii) interfere with,
disrupt or attempt to disrupt the relationship, contractual or
otherwise, between the Company and any third party, including but not
limited to its employees, contractors, tenants and lessees.
(b) It is the desire and intent of the parties that the
provisions of this Section 9 shall be enforced to the fullest extent
permitted under the laws and public policies of each
jurisdiction in which enforcement is sought. Accordingly, if any
particular portion of this Section 9 shall be adjudicated to be invalid
or unenforceable, such adjudication shall apply only with respect to
the operation of that portion in the particular jurisdiction in which
such adjudication is made, and all other portions shall continue in
full force and effect.
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(c) It is expressly agreed that the provisions and covenants
in this Section 9 shall not apply and shall be of no force or effect in
the event the Company terminates the Employee's employment under this
Agreement and such termination is not due to disability or for Cause.
10. Confidential Information: Rights to Materials.
(a) Confidential Information. The Employee promises and agrees
that he will not, either while in the Company's employ or at any time
thereafter, disclose to any person not employed by the Company, or not
engaged to render services to the Company, or use, for himself or any
other person, firm, corporation or entity, any confidential information
of the Company obtained by him while in the employ of the Company,
including, without limitation, any of the Company's methods, processes,
techniques, practices, research data, marketing and sales information,
personnel data, customer lists, financial data, plans, know-how, trade
secrets, and proprietary information of the Company; provided, however,
that this provision shall not preclude the Employee from use or
disclosure of information known generally to the public (other than
information known generally to the public as a result of a violation of
this Section 10(a) by the Employee), from use or disclosure of
information acquired by the Employee outside of his affiliation with
the Company, from disclosure required by law or court order, or from
disclosure or use appropriate and in the ordinary course of carrying
out his duties as an employee of the Company.
(b) Rights to Materials. The Employee further promises and
agrees that, upon termination of his employment for whatever reason and
at whatever time, he will not take with him, without the prior written
consent of an officer authorized to act in the matter by the Board of
Directors of the Company, any records, files, memoranda, reports,
customer lists,
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drawings, plans, sketches, documents, specifications,
and the like (or any copies thereof) relating to the business of the
Company or any of its current or future Affiliated Companies.
11. Change in Control. In the event of (i) the adoption of a plan of
merger or consolidation of the Company with any other corporation, trust or
partnership as a result of which the holders of the voting interests of the
Company as a group would receive less than 50% of the voting interests of the
surviving or resulting entity, (ii) the approval by the Board of Directors of
the Company of an agreement providing for the sale or transfer (other than as
security for obligations of the Company) of substantially all the assets of the
Company, or (iii) in the absence of a prior expression of approval by the Board
of Directors of the Company, and subsequent to the Commencement Date, the
acquisition of more than 20% of the Company's voting capital stock by any person
within the meaning of Section 13(d)(3) of the Exchange Act (any such event being
a Change in Control); then upon any termination of the Period of Employment by
the Company other than for cause under the provisions of Section 8(d) or upon a
termination caused by the Employee's refusal to relocate his principal place of
work to a location outside the state of Georgia at the request of the Company,
the Employee shall be entitled to the payment of his base salary at the rate in
effect at the time of such termination, for a period ending the later of the
expiration of the then current Period of Employment or six months following the
date of termination.
12. Injunctive Relief. The Employee acknowledges and agrees that the
Company would suffer irreparable injury in the event of a breach by him of any
of the provisions of Section 9 or Section 10 of this Agreement and that the
Company shall be entitled to an injunction restraining him from any breach or
threatened breach thereof. The Employee further agrees that, in the event of his
breach of any provision of Section 9 or 10 hereof, the Company shall be entitled
to cease any payments otherwise due and payable to the Employee hereunder.
Nothing herein shall be construed,
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however, as prohibiting the Company from pursuing any other remedies at law or
in equity which it may have for any such breach or threatened breach of any
provision of Section 9 or 10 hereof, including the recovery of damages from the
Employee.
13. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the Employee and his personal representatives,
estate and heirs and the Company and its successors and assigns, including
without limitation any corporation or other entity to which the Company may
transfer all or substantially all of its assets and business (by operation of
law or otherwise) and to which the Company may assign this Agreement. The
Employee may not assign this Agreement or any part hereof without the prior
written consent of the Company, which consent may be withheld by the Company for
any reason it deems appropriate.
14. Entire Agreement. This Agreement contains the entire agreement of
the parties with respect to the employment of the Employee by the Company and
supersedes and replaces all other understandings and agreements, whether oral or
in writing, if any there be, previously entered into be the parties with respect
to such employment.
15. Amendment; Waiver. No provisions of this Agreement may be amended,
modified or waived unless such amendment, modification or waiver is agreed to in
writing and signed by the Employee and by a duly authorized officer of the
Company. No waiver by either party of any breach by the other party of any
provision of this Agreement shall be deemed a waiver of any other breach.
16. Notices. Any notice to be given hereunder shall be in writing and
delivered personally, or sent by certified mail or registered mail, postage
prepaid, return receipt requested, addressed to the party concerned at, if to
the Company, the Company's address and if to the Employee, at the Employee's
home address.
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17. Severability. If any one or more of the provisions contained in
this Agreement shall be invalid, illegal, or unenforceable in any respect under
any applicable law, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
18. Withholding. Anything herein to the contrary notwithstanding, all
payments made by the Company hereunder shall be subject to the withholding of
such amounts relating to taxes as the Company may reasonably determined it
should withhold pursuant to any applicable law or regulation.
19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws and judicial decisions of the State of Georgia.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
PEACH AUTO PAINTING AND COLLISION, INC.
--------------------------------------------
(Corporate Seal) By:_________________________________________
Title:________________________________________
ATTEST:
_____________________
Secretary
______________________________________(SEAL)
(Employee)
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