EXHIBIT 10.3(e)
EMPLOYMENT AGREEMENT
This Agreement, made and dated as of December 12, 1996 (the "Effective
Date"), by and between Starcraft Corporation, an Indiana corporation
("Employer"), and Xxxxxxx X. Xxxxxxxxxx, 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 President, and is employed
as its Chief Financial 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;
WHEREAS, Employer desires to provide fair and reasonable benefits to
Employee on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, Employer desires reasonable protection of its confidential business
and customer information which it has developed over the years at substantial
expense and assurance that Employee will not compete with Employer for a
reasonable period of time after termination of his employment with Employer,
except as otherwise provided herein.
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 President and Chief Financial
Officer for Employer and its subsidiaries in connection with the Job
Responsibilities and to perform such Job Responsibilities in that office as may
reasonably be assigned to him by Employer's Board of Directors; 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 45 days in any calendar year. Employer shall not, without the written
consent of Employee, relocate or transfer Employee to a location more than 30
miles from his principal residence. Employee shall perform Job Responsibilities
for Employer as President and Chief Financial 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.
3. The term of this Agreement shall begin on the "Effective Date" and shall
end on the date which is one (1) year following such date (the "Anniversary
Date"); provided, however, that such term shall be extended for additional one
(1) year terms on each Anniversary Date, unless either party hereto gives
written notice to the other party not to so extend within ninety (90) days prior
to such Anniversary Date, in which case no further extension shall occur and the
term of this Agreement shall end on 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 extend by either party shall be a
termination of employment prior to expiration of the Term of this Agreement for
all purposes of this Agreement, including section 7 and section 8 hereof. 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. Employee shall receive an annual salary of Two Hundred Thousand Dollars
($200,000.00) ("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. Prior to a Change of
Control, Employer may also declare decreases in the salary it pays Employee if
the operating results of Employer are significantly less favorable than those
for the fiscal year then ending, and Employer makes similar decreases in the
salary it pays to all other senior executive officers of Employer. After a
Change in Control, Employer may only consider and declare salary increases (but
not decreases) based upon the following standards: inflation; adjustments to the
salaries of all other senior executive officers; and past performance of
Employee
and the contribution which Employee makes to the business and profits of
Employer during the Term.
Any and all increases or decreases in Employee's salary pursuant to this
section shall cause the level of Base Compensation to be increased or decreased
by the amount of each such increase or decrease for purposes of this Agreement.
The increased or decreased 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 or decrease in Base
Compensation as provided herein.
For purposes of this Agreement, a "Change of Control" shall be deemed to
have occurred if during, or following the consummation of, a stock purchase
program, tender offer, exchange offer, merger, consolidation, sale of assets,
contested election, or any combination of the foregoing transactions, any
person, entity or group of persons acting in concert (other than the Employee),
directly or indirectly (1) acquires the power to vote in excess of twenty-five
percent (25%) of the voting securities of Employer and one or more of its
representatives are elected to the Board, (2) acquires ownership of the power to
vote in excess of 50% of the voting securities of Employer, or (3) otherwise
acquires effective control of the business and affairs of Employer; provided,
however, that a Change of Control shall not be deemed to occur as a result of
any acquisition of shares of Employer capital stock by Employee, or Xxxxx X.
Xxxx and/or Xxxxx Xxxx, or any voting trust(s) of Employee, Xxxxx X. Xxxx,
and/or Xxxxx Xxxx to which any of their Employer capital stock is transferred
and further provided that a Change of Control shall not be deemed to occur so
long as Xxxxx X. Xxxx is Chairman of the Board and Chief Executive Officer of
Employer.
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 President of Employer and Chief Financial Officer of Employer
and 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, unless prior to a Change of Control the operating results of
Employer are significantly less favorable than those for the last fiscal year,
and unless either before or after a Change of Control changes in the accounting
or tax treatment of such plans would adversely affect Employer's operating
results or financial condition in a material way, and the Board of Directors of
Employer concludes that modifications to such plans need to be made to avoid
such adverse effects, and such modifications similarly affect all other senior
executive officers of Employer.
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) willful misconduct, (ii) breach of fiduciary duty
involving personal profit, (iii) intentional failure to perform stated
duties, (iv) conviction of a violation of any law, rule, or regulation
(other than traffic violations or similar offenses) or final
cease-and-desist order, or (v) any material breach of any term,
condition or covenant of this Agreement.
(B) Employer, by action of its Board of Directors, may fail to renew this
Agreement effective any Anniversary Date, or may terminate Employee's
employment with Employer at any time without cause.
(C) Employee, by written notice to Employer, may terminate his employment
with Employer at any time for cause. For purposes of this subsection
7(C), "cause" shall be defined as (i) any action by Employer's Board of
Directors to remove the Employee as President of Employer and Chief
Financial Officer of Employer and 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 President of
Employer and as Chief Financial Officer of Employer and 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 its subsidiaries by the Employer's Board
of Directors..
(D) 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.
(E) Employee's employment with Employer shall terminate in the event of
Employee's death or disability. For purposes hereof, "disability" shall
be defined as Employee's inability by reason of illness or other
physical or mental incapacity to perform the duties required by his
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(D), 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 without cause by Employer or with cause by
Employee pursuant to subsection 7(B) 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. In addition, Employee shall be entitled to continue
to receive from Employer his Base Compensation at the rates in effect at
the time of termination for one (1) additional twelve (12) month period,
provided, however in the event that termination pursuant to subsection
7(B) or 7(C) follows a Change of Control, then the additional period
referred to herein as "one (1) additional twelve (12) month period"
shall rather be "three (3) 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, provided,
however, that in the event that Employee shall be entitled to receive
from Employer his Base Compensation at the rates in effect at the time
of termination for three (3) additional twelve (12) month periods, then
Employee at his option may elect to receive such Base Compensation for
such three (3) 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. 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. The right of Employee to continued coverage
under the health and medical insurance plans of Employer shall commence
upon the expiration of such period.
(C) In the event of termination pursuant to subsection 7(E), 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 disability, through the date of proper notice of
disability as required by subsection 7(E). 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 (3) months following termination of
Employee's employment by Employer without cause as set forth in
subsection 7(B), or Employee's termination of his employment with
Employer for cause as set forth in subsection 7(C), 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) For a period of two years after termination of Employee's employment by
Employer for reasons other than those set forth in subsections 7(B) or
(C) of this Agreement, Employee shall not (a) compete, directly or
indirectly, with the business of Employer as conducted during the term
of this Agreement (defined as van, sport utility, and truck
conversions), or have any interest (including any interest or
association, including but not limited to, that of owner, part owner,
partner, shareholder, director, officer, employee, agent, consultant,
lender or advisor) in any person, firm or entity which competes with
Employer in the geographic area described on the attached Exhibit A
(each such person, firm or entity is --------- referred to as
"Competitor"); (b) solicit or accept business for or on behalf of any
Competitor; (c) solicit, induce or persuade, or attempt to solicit,
induce or persuade, any person to work for or provide services to or
provide financial assistance to, any Competitor; or (d) solicit or
accept for or on behalf of or for the benefit of any Competitor, any
business from any person, firm or entity which during the term of this
Agreement was a vendor or supplier to, or subcontractor for, or
commercial purchaser from, Employer.
(C) 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.
(D) If Employee's employment by Employer is terminated during the Term of
this Agreement for reasons set forth in subsections 7(B) or (C) of this
Agreement, Employee shall have no obligations to Employer with respect
to noncompetition under subsections 9(A) and 9(B).
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), 7(D) or 7(E), 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 and noncompetition covenants of section 9 hereof and shall be
payable whether or not deductible by the Employer for federal income tax
purposes.
12. If a dispute arises regarding the grounds for termination of Employee
pursuant to 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 and noncompetition 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. The prevailing party shall be
entitled to its costs, expenses and reasonable attorney's fees.
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: Xxxxxxx X. Xxxxxxxxxx
00000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
If to Employer: Starcraft Corporation
0000 Xxxxxxx Xxxxxx
Post Office Box 1903
Goshen, IN 46526
Attention: Xxxxx X. Xxxx,
Chairman of the Board and
Chief Executive Officer
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 pursuant to subsection 7(C) hereof. As
used in this Agreement, "Employer" shall mean Employer and 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/ Xxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxx X. Xxxx
----------------------------- -----------------------------
Xxxxxxx X. Xxxxxxxxxx Xxxxx X. Xxxx
Its: Chief Executive Officer
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
