EXHIBIT 10.16
EMPLOYMENT AGREEMENT
This employment agreement (this "AGREEMENT") dated as of November 1, 2003 (the
"EFFECTIVE DATE"), is entered into by and between MOTORCAR PARTS & ACCESSORIES,
INC., a New York corporation currently having an address at 0000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 (together with its subsidiaries and
affiliates, the "COMPANY"), and Xxxx Xxxxxxxx, an individual residing at 0000
Xxx xx Xxx Xxxxx, Xxxxxx, Xxxxx Xxxxxxxx 00000 ("EXECUTIVE").
WITNESSETH:
WHEREAS, the COMPANY desires to employ EXECUTIVE as its Vice President Sales,
Traditional Aftermarket Group (or such other position as shall be determined by
the Board of Directors of the COMPANY, or any duly authorized and acting
committee thereof, the "BOARD OF DIRECTORS") and EXECUTIVE desires to be so
employed by the COMPANY, all upon the terms and subject to the conditions
contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. EMPLOYMENT. Subject to and upon the terms and conditions contained in this
AGREEMENT, the COMPANY hereby agrees to employ EXECUTIVE and EXECUTIVE
agrees to continue in the employ of the COMPANY, for the period set forth
in Paragraph 2 hereof, to render the services to the COMPANY, its
Affiliates and/or subsidiaries.
2. TERM. EXECUTIVE'S term of employment under this AGREEMENT shall commence
on the EFFECTIVE DATE and shall continue for a period through and
including October 31, 2005 (the "EMPLOYMENT TERM") unless extended in
writing by both parties or earlier terminated pursuant to the terms and
conditions set forth herein.
3. DUTIES.
(a) Unless otherwise determined by the BOARD OF DIRECTORS, EXECUTIVE
shall be employed as the COMPANY'S Vice President Sales, Traditional
Aftermarket Group and shall report to the COMPANY'S Chairman,
President and Chief Executive Officer. In this connection EXECUTIVE
will serve as a member of the COMPANY'S Executive Committee, which
is made up of its senior executives. It is agreed that EXECUTIVE
shall perform his service from the COMPANY'S facility to be
established by it in the Charlotte, North Carolina vicinity, or any
other facility mutually agreeable to the parties.
(b) EXECUTIVE agrees to abide by all By-Laws and applicable policies of
the Company, including but not limited to the Company's Code of
Business Conduct and Ethics, promulgated at any time and from time
to time by the BOARD OF DIRECTORS, and the directions of the
COMPANY'S Chairman, President and Chief Executive Officer.
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4. EXCLUSIVE SERVICES AND BEST EFFORTS. EXECUTIVE shall devote all of his
working time, attention, best efforts and ability to the service of the
COMPANY during the term of this AGREEMENT.
5. COMPENSATION. As compensation for his services and covenants hereunder,
the COMPANY shall pay EXECUTIVE the following:
(a) Base Salary and Signing Bonus. The COMPANY shall pay EXECUTIVE a
base salary ("SALARY") of One Hundred Eighty Five Thousand Dollars
($185,000) per year. In addition, no later than November 30, 2003,
COMPANY shall pay EXECUTIVE a one-time "signing bonus" of $18,000.
(b) Bonus. In addition to the Sales Bonus Plan described in Schedule A
hereto, EXECUTIVE shall participate in the COMPANY'S Executive Bonus
Program as and when adopted and amended from time to time by the
BOARD OF DIRECTORS. In the event of any part-year service by the
EXECUTIVE, any Bonus shall be prorated (as reasonably determined by
the BOARD OF DIRECTORS) for any part year service by EXECUTIVE.
6. BUSINESS EXPENSES. EXECUTIVE shall be reimbursed for, and entitled to
advances if permitted by applicable law (subject to repayment to the
COMPANY if not actually incurred by EXECUTIVE) with respect to, only those
business expenses incurred by him which are reasonable and necessary for
EXECUTIVE to perform his duties under this AGREEMENT in accordance with
policies established from time to time by the COMPANY. All expenditures
and advances in excess of Five Hundred Dollars ($500.00) must be approved
by the President and Chief Executive Officer of the COMPANY prior to being
incurred or advanced.
7. EMPLOYMENT BENEFITS AND OTHER ARRANGEMENTS.
(a) EXECUTIVE shall be entitled to three (3) weeks paid vacation each
year during the EMPLOYMENT TERM at such times as do not, in the
opinion of the Chairman, President and Chief Executive Officer,
interfere with EXECUTIVE'S performance of his duties hereunder.
(b) EXECUTIVE shall be entitled to those benefits (including equity
participation plan opportunities) usually provided from time-to-time
to Vice President level employees of the COMPANY. During the term of
this AGREEMENT, if EXECUTIVE does not elect or receive medical
insurance coverage for himself and his eligible family through the
COMPANY, he shall receive as an allowance for such medical insurance
an amount equal to the then cost which would be incurred by the
COMPANY in supplying such coverage for EXECUTIVE and his eligible
family. The COMPANY may withhold from any benefits payable to
EXECUTIVE all federal, state, local and other taxes and amounts as
shall be permitted or required pursuant to law, rule or regulation.
All of the benefits to which EXECUTIVE may be entitled may be
changed from time to time or withdrawn at any time in the sole
discretion of the COMPANY.
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(c) During the EMPLOYMENT TERM the COMPANY shall provide to executive an
automobile allowance in the amount of Five Hundred Dollars ($500.00)
per month.
(d) EXECUTIVE shall have the benefit of at least six months notice of
the termination of his employment under this Agreement, including at
the end of the EMPLOYMENT TERM, provided the foregoing shall not
apply in the event of a termination for cause pursuant to Paragraph
9.
(e) This AGREEMENT may be terminated by the COMPANY without Cause. In
such event, EXECUTIVE shall continue to receive payments of SALARY
and benefits as set forth in this AGREEMENT; provided, however, that
EXECUTIVE shall be obligated to mitigate his damages as a result of
the COMPANY'S termination of this AGREEMENT without Cause by seeking
appropriate alternative paid employment, which employment shall be
consistent with his expertise and employment history, and any SALARY
otherwise payable to him thereafter shall be reduced by an amount
equal to any amounts earned by EXECUTIVE from any person or entity
during the period EXECUTIVE is to receive SALARY. In connection with
EXECUTIVE'S obligation to mitigate his damages, EXECUTIVE shall use
his best efforts to seek appropriate alternative employment and
shall submit to COMPANY monthly reports as the COMPANY may
reasonably request explaining Employee's efforts in connection
therewith.
8. DEATH AND DISABILITY.
(a) The EMPLOYMENT TERM shall terminate on the date of EXECUTIVE'S
death, in which event EXECUTIVE'S accrued SALARY and BONUS,
reimbursable expenses and benefits, including accrued but unused
vacation time, owing to EXECUTIVE through the date of EXECUTIVE'S
death shall be paid to the EXECUTIVE'S estate. EXECUTIVE'S estate
will not be entitled to any other compensation upon termination of
this AGREEMENT pursuant to this Paragraph 8 (a)
(b) If, during the EMPLOYMENT TERM, EXECUTIVE, because of physical or
mental illness or incapacity, shall become substantially unable to
perform the duties and services required of him under this AGREEMENT
for a period of three (3) consecutive months, the COMPANY may, upon
at least ten (10) days' prior written notice given at any time after
the expiration of such three (3) month period to EXECUTIVE of its
intention to do so, terminate this AGREEMENT as of such date as may
be set forth in the notice. In any case of such termination,
EXECUTIVE shall be entitled to receive his accrued SALARY and BONUS,
if any, reimbursable expenses and benefits owing to EXECUTIVE
through the date of termination. EXECUTIVE will not be entitled to
any other compensation upon termination of this AGREEMENT.
9. TERMINATION FOR CAUSE.
(a) The COMPANY may terminate the employment of EXECUTIVE for Cause (as
hereinafter defined) without prior notice. Upon any such
termination, the COMPANY shall be released from any and all further
obligations under this AGREEMENT, except that the COMPANY shall be
obligated to pay
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EXECUTIVE his SALARY, reimbursable expenses and benefits owing to
EXECUTIVE through the day on which EXECUTIVE is terminated.
EXECUTIVE will not be entitled to any other compensation upon
termination of this AGREEMENT pursuant to this Paragraph 9 (a).
(b) As used herein, the term "Cause" shall mean: (i) the willful failure
of EXECUTIVE to perform his duties pursuant to Paragraph 3 hereof,
which failure is not cured by EXECUTIVE within ten (10) days
following notice thereof from the COMPANY; (ii) any other material
breach of this AGREEMENT by EXECUTIVE, including any of the material
representations or warranties made by EXECUTIVE; (iii) any act, or
failure to act by EXECUTIVE in bad faith or to the detriment or to
the detriment of the COMPANY; (iv) the commission by EXECUTIVE of an
act involving moral turpitude, dishonesty, theft, unethical business
conduct, or any other conduct which significantly impairs the
reputation of, or xxxxx, the COMPANY, its subsidiaries or
affiliates; (v) any misrepresentation, concealment or omission by
EXECUTIVE of any material fact in seeking or continuing employment
hereunder, or (vi) any other occurrence or circumstance generally
recognized a "cause" for employment termination under applicable
law.
10. DISCLOSURE OF INFORMATION AND RESTRICTIVE COVENANT. EXECUTIVE acknowledges
that, by his employment, he has been and will be in a confidential
relationship with the COMPANY and will have access to confidential
information and trade secrets of the COMPANY, its subsidiaries and
affiliates. Confidential information and trade secrets include, but are
not limited to, customer, supplier, and client lists, marketing,
distribution and sales strategies and procedures, operational and
equipment techniques, business plans and system, quality control
procedures and systems, special projects and technological research,
including projects, research and reports for any entity or client or any
project, research, report or the like concerning sales or manufacturing or
new technology, EXECUTIVE compensation plans and any other information
relating thereto, and any other records, files, drawings, inventions,
discoveries, applications, processes, data, and information concerning the
business of the COMPANY which are not in the public domain. EXECUTIVE
agrees that in consideration of the execution of this AGREEMENT by the
COMPANY:
(a) EXECUTIVE will not, during the term of this AGREEMENT or at any time
thereafter, use, or disclose to any third party, trade secrets or
confidential information of the COMPANY, including but not limited
to, confidential information or trade secrets belonging or relating
to the COMPANY, its subsidiaries, affiliates, customers and clients
or proprietary processes or procedures of the COMPANY, its
subsidiaries, affiliates, customers and clients. Proprietary
processes and procedures shall include, but shall not be limited to,
all information which is known or intended to be known only to
executives of the COMPANY, its respective subsidiaries and
affiliates or others in a confidential relationship with the COMPANY
or its respective subsidiaries and affiliates which relates to
business matters.
(b) EXECUTIVE will not, during the term of the AGREEMENT, directly or
indirectly, under any circumstance other than at the direction and
for the benefit of the
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COMPANY, engage in or participate in any business activity,
including, but not limit to, acting as a director, franchisor or
franchisee, proprietor, syndicate member, shareholder or creditor or
with a person having any other relationship with any other business,
company, firm occupation or business activity, in any geographic
area within the United States that is, directly or indirectly,
competitive with any business completed by the COMPANY or any of its
subsidiaries or affiliates during the term of this AGREEMENT or
thereafter. Should EXECUTIVE own 5% or less of the issued and
outstanding shares of a class of securities of a corporation the
securities of which are traded on a national securities exchange or
in the over-the-counter market, such ownership shall not cause
EXECUTIVE to be deemed a shareholder under this Paragraph 10 (b).
(c) EXECUTIVE will not, during the term of this AGREEMENT and for a
period of two (2) years thereafter on his behalf or on behalf of any
other business enterprise, directly or indirectly, under any
circumstance other than at the direction and for the benefit of the
COMPANY, solicit or induce any creditor, customer, supplier,
officer, EXECUTIVE or agent of the COMPANY or any of its
subsidiaries or affiliates to sever its relationship with or leave
the employ of any such entities.
(d) This Paragraph 10 and Paragraphs 11, 12 and 13 hereof shall survive
the expiration or termination of this AGREEMENT for any reason.
(e) It is expressly agreed by EXECUTIVE that the nature and scope of
each of the provisions set forth above in this Paragraph 10 are
reasonable and necessary. If, for any reason, any aspect of the
above provisions as it applies to EXECUTIVE is determined by a court
of competent jurisdiction to be unreasonable, or unenforceable, the
provision shall only be modified to the minimum extent required to
make the provisions reasonable and/or enforceable, as the case may
be. EXECUTIVE acknowledges and agrees that his services are of a
unique character and expressly grants to the COMPANY or any
subsidiary, successor or assignee of the COMPANY, the right to
enforce the provisions above through the use of all remedies
available at law or in equity, including, but not limited to,
injunctive relief.
11. COMPANY PROPERTY.
(a) Any patents, inventions, discoveries, applications or process,
designs, devised, planned, applied, created, discovered or invented
by EXECUTIVE in the course of EXECUTIVE'S employment under this
AGREEMENT and which pertain to any aspect of the COMPANY'S or its
respective subsidiaries' or affiliates' business shall be the sole
and absolute property of the COMPANY, and EXECUTIVE shall make
prompt report thereof to the COMPANY and promptly execute any and
all documents reasonably requested to assure the COMPANY the full
and complete ownership thereof.
(b) All records, files, lists, including computer generated lists,
drawings, documents, equipment and similar items relating to the
COMPANY'S business which EXECUTIVE shall prepare or receive from the
COMPANY shall remain the COMPANY'S sole and exclusive property. Upon
termination of this
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AGREEMENT, EXECUTIVE shall promptly return to the COMPANY all
property of the COMPANY in his possession. EXECUTIVE further
represents that he will not copy or cause to be copied, print out or
cause to be printed out any software, documents or other materials
originating with or belonging to the COMPANY. EXECUTIVE additionally
represents that, upon termination of his employment with the
COMPANY, he will not retain in his possession any such software,
documents or other materials.
12. REMEDY. It is mutually understood and agreed that EXECUTIVE'S services are
special, unique, unusual, extraordinary and of an intellectual character
giving them a peculiar value, the loss of which cannot be reasonably or
adequately compensated in damages in an action at law. Accordingly, in the
event of any breach of this AGREEMENT by EXECUTIVE, including but not
limited to, the breach of the non-disclosure, non-solicitation and
non-compete clauses of Paragraph 10 hereof, the COMPANY shall be entitled
to equitable relief by way of injunction or otherwise in addition to
damages the COMPANY may be entitled to recover.
13. REPRESENTATIONS AND WARRANTIES OF EXECUTIVE. In order to induce the
COMPANY to enter into this AGREEMENT, EXECUTIVE hereby represents and
warrants to the COMPANY as follows: (i) EXECUTIVE hereby has the legal
capacity to unrestricted right to execute and deliver this AGREEMENT and
to perform all of his obligations hereunder; (ii) the execution and
delivery of this AGREEMENT by EXECUTIVE and the performance of his
obligations hereunder will not will not violate or be in conflict with any
fiduciary or other duty, instrument, agreement, document, ,arrangement or
other understanding to which EMPOLOYEE is a party or by which he is or may
be bound or subject; and (iii) EXECUTIVE is not a party to any instrument,
agreement, document, arrangement or other understanding with any person
(other than the COMPANY) requiring or restricting the use or disclosure of
any confidential information or the provision of any employment,
consulting or other services.
14. NOTICES. All notices given hereunder shall be in writing and shall be
deemed effectively given when hand-delivered or mailed, if sent by
registered or certified mail, return receipt requested, addressed to
EXECUTIVE at his address set forth on the first page of this AGREEMENT or
to the COMPANY at its address set forth on the first page of this
AGREEMENT or to such changed address as may be properly noticed hereunder.
15. ENTIRE AGREEMENT. Other than any separate agreements which supplement and
are cumulative to paragraphs 10, 11 and 12 hereof, this AGREEMENT
constitutes the entire understanding of the parties with respect to its
subject matter and no change, alteration or modification hereof may be
made except in writing signed by the parties hereto. Any prior or other
agreements, promises, negotiations or representations not expressly set
forth in this AGREEMENT are of no force or effect.
16. SEVERABILITY. If any provision of this AGREEMENT shall be unenforceable
under any applicable law, then notwithstanding such unenforceability, the
remainder of this AGREEMENT shall continue in full force and effect.
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17. WAIVERS, MODIFICATIONS, ETC. No amendment, modification or waiver of any
provision of this AGREEMENT shall be effective unless the same shall be in
writing and signed by each of the parties hereto, and then such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given.
18. INDEMNIFICATION. COMPANY shall indemnify EXECUTIVE against any and all
claims of third parties arising out of the lawful and authorized
performance of his duties pursuant to this AGREEMENT by EXECUTIVE to the
fullest extent permitted by law.
19. ASSIGNMENT. Neither this AGREEMENT, nor any of EXECUTIVE'S rights, powers,
duties or obligation hereunder, may be assigned by EXECUTIVE. This
AGREEMENT shall be binding upon and inure to the benefit of EXECUTIVE and
his heirs and legal representatives and the COMPANY and its successors and
assigns.
20. APPLICABLE LAW. This AGREEMENT shall be deemed to have been made, drafted,
negotiated and the transactions contemplated hereby consummated and fully
performed in the State of California, without regard to the conflicts of
law rules thereof. Nothing contained in this AGREEMENT shall be construed
so as to require the commission of any act contrary to law, and whenever
there is any conflict between any provision of this AGREEMENT and any
statue, law, ordinance, order or regulation, contrary to which the parties
hereto have no legal right to contract, the latter shall prevail, but in
such event any provision of this AGREEMENT so affected shall be curtailed
and limited only to the extent necessary to bring it within applicable
legal requirements.
21. ARBITRATION; JURISDICTION AND VENUE; PREVAILING PARTY It is hereby
irrevocably agreed that all disputes or controversies between COMPANY and
EXECUTIVE arising out of, in connection with or relating to this AGREEMENT
shall be exclusively heard, settled and determined by arbitration before a
retired Federal or California judge to be held in the City of Los Angeles,
County of Los Angeles. The arbitration shall be administered by JAMS
pursuant to its Comprehensive Arbitration Rules and Procedures. The
parties also agree that judgment may be entered on the arbitrator's award
by any court having jurisdiction thereof and the parties consent to the
jurisdiction of any court located in the City of Los Angeles, County of
Los Angeles, for this purpose. The arbitrator shall allocate all of the
costs of the arbitration, including the fees of the arbitrator and the
reasonable attorneys' fees and expenses of the prevailing party, against
the party who did not prevail.
22. FULL UNDERSTANDING. EXECUTIVE represents and agrees that he fully
understands his rights to discuss all aspects of this AGREEMENT with his
private attorney, that to the extent, if any, that he desires, he availed
himself of this right, that he has carefully read and fully understands
all of the provisions of this AGREEMENT, that he is competent to execute
this AGREEMENT, that his agreement to execute this AGREEMENT has not been
obtained by any duress and that he freely and voluntarily enters into it,
and that he has read this document in its entirety and fully understands
the meaning, intent and consequences of this document.
23. COUNTERPARTS. This AGREEMENT may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
taken together shall constitute one and the same agreement.
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24. LEGAL REPRESENTATION. The parties hereto acknowledge that each has been
represented by independent counsel of such party's own choice throughout
all of the negotiations which preceded the execution of this AGREEMENT and
in connection with the preparation and execution of this AGREEMENT or has
had the opportunity to do so and has not availed himself or itself of it.
IN WITNESS WHEREOF, the parties have executed this AGREEMENT as of the date
first above written.
MOTORCAR PARTS & ACCESSORIES, INC.
By: /s/ XXXXXX XXXXX
-------------------------------------------------------
Name/Date: Xxxxxx Xxxxx
Title: Chairman of the Board, President and Chief
Executive Officer
/S/ XXXX XXXXXXXX
------------------------------------------
Xxxx Xxxxxxxx/October 2, 2003
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SCHEDULE A
SALES BONUS PLAN
[EXECUTIVE SHALL BE ELIGIBLE FOR AN ANNUAL SALES BONUS PLAN BONUS OF UP TO 25%
OF HIS SALARY, THE TERMS OF WHICH ARE TO BE AGREED TO BY DECEMBER 31, 2003
THROUGH NEGOTIATION BETWEEN EXECUTIVE AND THE COMPANY'S CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER.]
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