EXHIBIT 10.3(b)
EMPLOYMENT AGREEMENT
This Agreement, made and dated as of December 12, 1996 ("Effective Date"),
by and between Starcraft Corporation, an Indiana corporation ("Employer"), and
Xxxxx X. Xxxx, a resident of Elkhart County, Indiana ("Employee").
W I T N E S S E T H
WHEREAS, Employee is employed by Employer as its Chairman of the Board and
Chief Executive Officer, for itself and each of its subsidiaries ("Job
Responsibilities") and Employee has made valuable contributions to the strategic
planning, business operations, and financial strength of Employer;
WHEREAS, Employer desires to encourage Employee to continue to make valuable
contributions to Employer's business operations and not to seek or accept
employment elsewhere;
WHEREAS, Employee desires to be assured of a secure minimum compensation
from Employer for his services over a defined term;
WHEREAS, Employer desires to assure the continued services of Employee on
behalf of Employer on an objective and impartial basis and without distraction
or conflict of interest in the event of an attempt by any person to obtain
control of Employer;
WHEREAS, Employer recognizes that when faced with a proposal for a change of
control of Employer, Employee will have a significant role in helping the Board
of Directors assess the options and advising the Board of Directors on what is
in the best interests of Employer and its shareholders, and it is necessary for
Employee to be able to provide this advice and counsel without being influenced
by the uncertainties of his own situation; and
WHEREAS, Employer desires to provide fair and reasonable benefits to
Employee on the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of these premises, the mutual covenants and
undertakings herein contained and the continued employment of Employee to
perform Job Responsibilities for Employer, Employer and Employee, each intending
to be legally bound, covenant and agree as follows:
1. Upon the terms and subject to the conditions set forth in this
Agreement, Employer employs Employee to perform Job Responsibilities for
Employer, and Employee accepts such employment.
2. Employee agrees to serve as Employer's Chief Executive Officer for
Employer and each of its subsidiaries in connection with the Job
Responsibilities; provided, however that such duties shall be performed in or
from the offices of Employer currently located at Goshen, Indiana, and shall be
of the same character
as those previously performed by Employee and generally associated with the
office held by Employee. Employee shall not be required to be absent from the
location of the principal executive offices of Employer on travel status or
otherwise more than ten (10) days in any calendar year. Employer shall not,
without the written consent of Employee, relocate or transfer Employee to a
location more than fifteen (15) miles from his principal residence. Employee
shall perform Job Responsibilities for Employer as Chief Executive Officer for
Employer and each of its subsidiaries in substantially the same manner and to
substantially the same extent as Employee rendered his services to Employer
before the date hereof. Although while employed by Employer, Employee shall
devote substantially all his business time and efforts to Employer's business
and shall not engage in any other related business, Employee may use his
discretion in fixing his hours and schedule of work consistent with the proper
discharge of his duties. Employer shall cause Employee to be nominated to
successive terms as a member of Employer's Board of Directors and shall use its
best efforts to cause Employee to be elected and re-elected as a member of such
Board.
3. The term of this Agreement shall begin on the "Effective Date" and shall
end on the date which is five (5) years following such date; provided, however,
that such term shall be extended for additional five (5) year terms on each
anniversary of the Effective Date (the "Anniversary Date"), unless either party
hereto gives written notice to the other party not to so extend within ninety
(90) days prior to each such Anniversary Date, in which case no further
extension shall occur and the term of this Agreement shall end five (5) years
subsequent to the Anniversary Date as of which the notice not to extend is given
(such term, including any extension thereof shall herein be referred to as the
"Term"). A notice not to so extend given by either party shall be a termination
of employment prior to the expiration of the Term of this Agreement, for all
purposes, including Section 7 and Section 8 of this Agreement. Such notice not
to extend shall be in the form of the "Notice of Termination" defined in Section
10 hereof and shall contain specific reference to specific provisions of Section
7 hereof relied upon for any such termination on the Anniversary Date or
otherwise.
4. During the Term, Employee shall receive an annual salary of not less
than Three Hundred Thousand Dollars ($300,000.00) ("Base Compensation") payable
at regular intervals in accordance with Employer's normal payroll practices now
or hereafter in effect. Employer may consider and declare from time to time
increases in the salary it pays Employee and thereby increases in his Base
Compensation. Any and all increases in Employee's salary pursuant to this
section shall cause the level of Base Compensation to be increased by the amount
of each such increase for purposes of this Agreement. The increased level of
Base Compensation as provided in this section shall become the level of Base
Compensation for the remainder of the Term of this Agreement until there is a
further increase in Base Compensation as provided herein.
5. So long as Employee is employed by Employer pursuant to this Agreement,
he shall be included as a participant in all present and future employee
benefit, retirement, and compensation plans generally available to employees of
Employer, consistent with his Base Compensation, his Job Responsibilities and
his position as Chief Executive Officer of Employer and each of its
subsidiaries, including, without limitation, Employer's 401(k) plan, stock
incentive plan, Executive Bonus Plan, split dollar life insurance program, and
group life insurance plans
(collectively, "Benefit Plans"), each of which Employer agrees to continue in
effect on terms no less favorable than those currently in effect as of the date
hereof (as permitted by law) during the Term of this Agreement.
6. So long as Employee is employed by Employer pursuant to this Agreement,
Employee shall receive reimbursement from Employer for all reasonable business
expenses incurred in the course of his employment by Employer, upon submission
to Employer of written vouchers and statements for reimbursement. Employee shall
attend, at his discretion, those professional meetings, conventions, and/or
similar functions that he deems appropriate and useful for purposes of keeping
abreast of current developments in the industry and/or promoting the interests
of Employer. So long as Employee is employed by Employer pursuant to the terms
of this Agreement, Employer shall continue in effect vacation policies
applicable to Employee no less favorable from his point of view than those
written vacation policies in effect on the date hereof. So long as Employee is
employed by Employer pursuant to this Agreement, Employee shall be entitled to
office space and working conditions no less favorable from his point of view
than were in effect for him on the date hereof. So long as Employee is employed
by Employer pursuant to this Agreement, employee shall be entitled to the use of
a company car provided by the Employer. So long as Employee is employed by
Employer pursuant to this Agreement, Employee shall be entitled to membership in
the Elcona Country Club, and Employer shall continue to pay the dues and
assessments for such membership.
7. Subject to the respective continuing obligations of the parties,
including but not limited to those set forth in subsections 8(A), 8(B), 8(C) and
8(D) hereof, Employee's employment by Employer may be terminated effective on
any Anniversary Date or otherwise prior to the expiration of the Term of this
Agreement as follows:
(A) Employer, by action of its Board of Directors and upon written notice to
Employee, may terminate Employee's employment with Employer at any time for
cause. For purposes of this subsection 7(A), "cause" shall be defined as:
(i) the willful, flagrant and repeated failure of Employee to
perform his duties or to comply with the reasonable
directions of the Board of Directors which failure
continues after the Board of Directors has given written
notice to Employee specifying in reasonable detail the
manner in which Employee has failed to perform such duties
or comply with such directions;
(ii) the conviction of the Employee for a felony which the
Board of Directors determines in the exercise of its
reasonable judgment could be expected to have a material
adverse impact on the Employer.
(B) Employee, by written notice to Employer, may terminate his
employment with Employer at any time for cause. For purposes of
this subsection 7(B), "cause" shall be defined as (i) any action by
Employer's Board of Directors to remove the Employee as Chairman of
the Board or Chief Executive Officer of Employer or any of its
subsidiaries, except where the Employer's Board of Directors
properly acts to remove Employee from such office for "cause" as
defined in subsection 7(A) hereof, (ii) any action by Employer's
Board
of Directors to materially limit, increase, or modify
Employee's Job Responsibilities and/or authority as Chairman
of the Board or Chief Executive Officer of Employer or any of
its subsidiaries (including his authority, subject to
corporate controls no more restrictive than those in effect on
the date hereof, to hire and discharge employees who are not
bona fide officers of Employer), (iii) any failure of Employer
to obtain the assumption of the obligation to perform this
Agreement by any successor, assignee, or distributee of all or
substantially all of Employer's assets (on a consolidated
basis with those of its subsidiaries), or the reaffirmation of
such obligation by such successor, assignee, or distributee,
as contemplated in Section 16 hereof; (iv) any material breach
by Employer of a term, condition or covenant of this
Agreement; or (v) adoption or approval of a plan of
liquidation, dissolution, or reorganization for Employer or
any of its subsidiaries by the Employer's Board of Directors.
(C) Except as otherwise provided in Section 3 regarding nonrenewal
on any Anniversary Date, and in addition thereto, Employee, at
any time and upon sixty (60) days written notice to Employer,
may terminate his employment with Employer without cause.
(D) Employee's employment with Employer shall terminate in the
event of Employee's death or permanent disability. For
purposes hereof, "disability" shall be defined as Employee's
permanent inability by reason of illness or other physical or
mental incapacity to perform duties reasonably required for
employment for any consecutive one hundred eighty (180) day
period, provided that notice of any termination by Employer
because of Employee's "disability" shall have been given to
Employee prior to the full resumption by him of the
performance of such duties.
8. In the event of termination of Employee's employment with Employer
pursuant to Section 7 hereof, which shall include a nonrenewal of this Agreement
on any Anniversary Date as provided in Section 3 hereof, compensation shall
continue to be paid by Employer to Employee as follows:
(A) In the event of termination for cause by Employer or without
cause by Employee pursuant to subsection 7(A) or 7(C),
respectively, compensation provided for herein (including Base
Compensation) shall continue to be paid, and Employee shall
continue to participate in the Benefit Plans and other
perquisites as provided in Sections 5 and 6 hereof, through
the date of termination specified in the notice of
termination. Any benefits payable under such Benefit Plans as
a result of Employee's participation in such plans through
such date shall be paid when due under those plans. The date
of termination specified in any notice of termination pursuant
to subsection 7(A) shall be no later than the last business
day of the month in which such notice is provided to Employee.
(B) In the event of termination with cause by Employee pursuant to
subsection 7(B), compensation provided for herein (including
Base Compensation) shall continue to be paid, and Employee
shall continue to participate in the Benefit Plans and other
perquisites as provided in Sections 5 and 6 hereof, through
the date of termination specified in the notice of
termination.
Any benefits payable under such Benefit Plans as a result of
Employee's participation in such plans through such date shall
be paid when due under those plans. In addition, Employee
shall at his option exercised effective the date of
termination, be entitled to receive one of the following:
either,
(i) Employee shall be entitled to continue to receive
from Employer his Base Compensation at the rates in
effect at the time of termination for five (5)
additional twelve (12) month periods. In addition,
during such periods, Employer will maintain in full
force and effect for the continued benefit of
Employee and his dependents each Benefit Plan in
which Employee was entitled to participate
immediately prior to the date of his termination,
unless an essentially equivalent and no less
favorable benefit is provided by a subsequent
employer of Employee. If the terms of any Benefit
Plan, or applicable laws, do not permit continued
participation by Employee, Employer will arrange to
provide to Employee a benefit substantially similar
to, and no less favorable than, the benefit he was
entitled to receive under such Benefit Plans at the
end of the period of coverage;
or,
(ii) Employee shall be entitled to receive from Employer
his Base Compensation at the rates in effect at the
time of termination for five (5) additional twelve
(12) month periods, payable in one lump sum payment
on or before thirty (30) days following the date of
termination, and Employer will not thereafter
maintain any Benefit Plan for the continued benefit
of Employee and his dependents.
(C) In the event of termination pursuant to subsection 7(D),
compensation provided for herein (including Base Compensation)
shall continue to be paid, and Employee shall continue to
participate in the Benefit Plans and other perquisites as
provided in sections 5 and 6 hereof, (i) in the event of
Employee's death, through the date of death, or (ii) in the
event of Employee's permanent disability, through the date of
proper notice of disability as required by subsection 7(D).
Any benefits payable under such Benefit Plans as a result of
Employer's participation in such plans through such date shall
be paid when due under those plans.
(D) Employer will permit Employee or his personal
representative(s) or heirs, during a period of three months
following termination of Employee's employment by Employer
with cause as set forth in subsection 7(A), or Employee's
termination of his employment with Employer for cause as set
forth in subsection 7(B), or Employee's termination of his
employment with Employer without cause as set forth in
subsection 7(C), or death or disability of the Employee as set
forth in subsection 7(D), to require Employer, upon written
request and at Employee's option, to purchase all or less than
all of outstanding stock options previously granted to
Employee under any Employer stock option plan then in effect
whether or not such options are then exercisable or have
terminated, at a cash purchase
price equal to the amount by which the aggregate "fair market
value" of the shares subject to such options exceeds the
aggregate option price for such shares. For purposes of this
Agreement, the term "fair market value" shall mean the higher
of (1) the average of the highest asked prices for Employer
shares in the over-the-counter market as reported on the
NASDAQ system or other national exchange if the shares are
traded on such system for the thirty (30) business days
preceding such termination, or (2) the average per share price
actually paid for the most highly priced one percent (1%) of
the Employer shares acquired in connection with any change of
control of the Employer by any person or group acquiring such
control.
9. In order to induce Employer to enter into this Agreement, Employee
hereby agrees as follows:
(A) Unless otherwise required to do so by law, including the order
of a court or governmental agency, Employee shall not divulge
or furnish any trade secrets (as defined in IND. CODEss.
24-2-3-2) of Employer or any confidential information acquired
by him while employed by Employer concerning the policies,
plans, procedures or customers of Employer to any person, firm
or corporation, other than Employer or upon its written
request, or use any such trade secret or confidential
information directly or indirectly for Employee's own benefit
or for the benefit of any person, firm or corporation other
than Employer, since such trade secrets and confidential
information are confidential and shall at all times remain the
property of Employer.
(B) If Employee's employment by Employer is terminated for any
reason by either Employee or Employer, Employee will turn over
immediately thereafter to Employer all business
correspondence, letters, papers, reports, customers' lists,
financial statements, records, drawings, credit reports or
other confidential information or documents of Employer or its
affiliates in the possession or control of Employee, all of
which writings are and will continue to be the sole and
exclusive property of Employer or its affiliates.
10. Any termination of Employee's employment with Employer as
contemplated by Section 3 and Section 7 hereof, except in the circumstances of
Employee's death, shall be communicated by written "Notice of Termination" by
the terminating party to the other party hereto. Any "Notice of Termination"
must refer to one or more of subsections 7(A), 7(B), 7(C) or 7(D), shall
indicate the specific provisions of this Agreement and one or more of such
subsections of Section 7 relied upon, and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for such termination
under one or more of such subsections of Section 7.
11. Anything in this Agreement to the contrary notwithstanding, payment
of Base Compensation by the Employer to or for the benefit of the Employee
pursuant to subsection 8(B) hereof shall be inclusive of payment attributable to
the confidentiality covenants of subsection 9(A), and shall be payable whether
or not deductible by the Employer for federal income tax purposes.
12. If a dispute arises regarding termination of employment pursuant to
Section 3 and Section 7 hereof, said dispute shall be resolved by binding
arbitration determined in accordance with the rules of the American Arbitration
Association and if Employee obtains a final award in his favor or his claim is
settled by Employer prior to the rendering of an award by such arbitration, all
reasonable legal fees and expenses incurred by Employee in contesting or
disputing any such termination or otherwise pursuing his claim shall be paid by
Employer, to the extent permitted by law. If a dispute arises regarding other
provisions of this Agreement, including enforcement of the confidentiality
provisions hereof, then such shall be heard only by the judge and not by a jury,
in any court of general jurisdiction in Elkhart County, Indiana, to which such
sole and exclusive jurisdiction each party irrevocably consents. Each party
agrees not to assert and hereby waives any right of removal, consolidation or
joinder with any other action, or any transfer by reason of preferred venue. The
prevailing party shall be entitled to its costs, expenses and reasonable
attorney's fees. It is provided, however, that in either of arbitration or
judicial proceedings, if it is determined that Employer breached any of the
material terms or conditions of this Agreement, then as liquidated damages,
Employee shall be entitled to receive not less than the Base Compensation and
Benefit Plan payments described in subsection 8(B) hereof.
13. Should Employee die after termination of his employment with Employer
while any amounts are payable to him hereunder, this Agreement shall inure to
the benefit of and be enforceable by Employee's executors, administrators,
heirs, distributees, devisees and legatees and all amounts payable hereunder
shall be paid in accordance with the terms of this Agreement to Employee's
devisee, legatee or other designee or, if there is no such designee, to his
estate.
14. For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been given
when delivered or mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to Employee: Xxxxx X. Xxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
If to Employer: Starcraft Corporation
0000 Xxxxxxx Xxxxxx
Post Office Box 1903
Goshen, IN 46526
Attention: Xxxxxxx X. Xxxxxxxxxx, President
or to such address as either party hereto may have furnished to the other party
in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
15. The validity, interpretation, and performance of this Agreement shall be
governed by the laws of the State of Indiana.
16. Employer shall require any successor, assignee, distributee or other
transferee of all or substantially all of its or its subsidiaries' assets or
business ("Succession") (whether direct or indirect, by purchase, merger,
dissolution, liquidation, consolidation or otherwise) by agreement in form and
substance satisfactory to Employee to expressly assume and agree to perform this
Agreement in the same manner and same extent that Employer would be required to
perform it if no such Succession had taken place. Failure of Employer to obtain
such agreement prior to the effectiveness of any such Succession shall be a
material intentional breach of this Agreement and shall entitle Employee to
terminate his employment with Employer for cause pursuant to subsection 7(B)
hereof. As used in this Agreement, "Employer" shall mean Employer or any of its
subsidiaries from time to time and any successor to its or their business or
assets as aforesaid.
17. No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
Employee and Employer. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of dissimilar provisions or conditions at the same or any prior or
subsequent time. No agreements or representation, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
18. The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provisions of this
Agreement which shall remain in full force and effect.
19. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same agreement.
20. This Agreement is personal in nature and neither party hereto shall,
without consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder except as provided in Section 13 and Section 16 above.
Without limiting the foregoing, Employee's right to receive compensation
hereunder shall not be assignable or transferable, whether by pledge, creation
of a security interest or otherwise, other than a transfer by his will or by the
laws of descent or distribution as set forth in Section 13 hereof, and in the
event of any attempted assignment or transfer contrary to this paragraph,
Employer shall have no liability to pay any amounts so attempted to be assigned
or transferred.
IN WITNESS WHEREOF, the parties have caused the Agreement to be executed and
delivered this 18th day of December, 1996.
"Employee" "Employer"
STARCRAFT CORPORATION
/s/ Xxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------- -----------------------
Xxxxx X. Xxxx Xxxxxxx X. Xxxxxxxxxx
Its:President
EXHIBIT A
In Japan, Europe, and any of the 48 contiguous States of the United States
of America; it being acknowledged by Employee that the Company conducts business
in all such States, and also it is acknowledged by Employee that the Company
presently conducts a substantial amount of its business in each of the following
States:
Wisconsin
Michigan
Illinois
Indiana
Ohio
Pennsylvania
New York
Oklahoma
Texas
California
