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EXHIBIT 10.8
EMPLOYMENT AGREEMENT BETWEEN THE REGISTRANT AND XXXX X. XXXXXXXX DATED JUNE 23,
1997.
EMPLOYMENT AGREEMENT
This Agreement is made as of June 23, 1997, between PENDA CORPORATION,
a Florida corporation (the "Company"), and XXXX X. XXXXXXXX (the "Executive").
NOW THEREFORE, in consideration of (a) the Executive's employment and
continued employment with the Company, (b) the compensation paid to the
Executive for his services hereunder and the benefits provided to the Executive
in connection therewith, (c) the use by the Executive of the facilities and
other resources of the Company, (d) the opportunity provided by the Company to
the Executive to acquire or use information relating to or based on the business
of the Company, and (e) the opportunity provided by the Company to the Executive
to acquire shares of capital stock of the Company, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Interpretation of this Agreement.
(a) Terms Defined. As used herein, the following
terms when used in this Agreement have the meanings set forth below:
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934, as amended.
"Base Salary" shall have the meaning given to it under
Section 2(b) of this Agreement.
"Board" means the Board of Directors of the Company.
"Bonus Year" shall have the meaning given to it in section
2(e) of this Agreement.
"Cause" means (i) the commission of any act by the Executive
constituting financial dishonesty against Company or its Affiliates, (ii) the
conviction by the Executive of a felony or other crime involving moral
turpitude, (iii) gross dereliction of duty to the Company or its Subsidiaries,
(iv) the Executive's breach of the fiduciary duty of loyalty to the Company or
its Subsidiaries, (v) any breach by the Executive of any of the material terms
of this Agreement (including without limitation Sections 3, 4, 5, 6, 7 or 8
hereof), or (vi) conduct by the Executive which could reasonably be expected to
have a material adverse effect on the business, properties, results of
operations, financial condition or prospects of the Company or its Subsidiaries.
"Company" has the meaning given to it in the first sentence
of this Agreement.
"Company Information" means Confidential Information and
Trade Secrets.
"Confidential Information" means confidential data and
confidential information relating to the business of the Company (which does not
rise to the status of a Trade Secret under applicable law) which is or has been
disclosed to the Executive or of which the Executive became aware as a
consequence of or through his employment with the Company and which has material
value to the Company and its Affiliates and is not generally known to the
competitors of the Company and its Affiliates. Confidential Information shall
not include any data or information that (i) has been voluntarily disclosed to
the general public by the Company or its Affiliates, (ii) has been independently
developed and disclosed to the general public by others, or (iii) otherwise
enters the public domain through lawful means.
"Continuation Period" shall have the meaning given to it in
Section 2(d) hereof.
"Disability" means the Executive's inability to perform his
normal duties for any 180 consecutive calendar day period or any 180 business
days (whether or not consecutive) during any 365 calendar day period.
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"Employment Period" shall have the meaning given to it in
Section 2(a) hereof.
"Executive" shall have the meaning given to it in the first
sentence of this Agreement.
"Incentive Compensation" shall have the meaning given to it
in Section 2(e) of this Agreement.
"Independent Third Party" shall have the meaning given to it
in Section 2(a) hereof.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a governmental entity (or any
department, agency or political subdivision thereof).
"Stock Option Plan" means the Company's Management Stock
Option Plan and Agreement for Xxxx X. Xxxxxxxx, as the same may be amended from
time to time.
"Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns, directly or indirectly, a
majority of the common stock or has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors.
"Trade Secrets" means information of the Company and its
Subsidiaries including, but not limited to, technical or nontechnical data,
formulas, patterns, compilations, programs, financial data, financial plans,
product or service plans or lists of actual or potential customers or suppliers
which (i) derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use, and (ii) is the
subject of efforts that are reasonable under the circumstances to maintain its
secrecy.
(b) Interpretation. The words "herein," "hereof," "hereunder"
and other words of similar import refer to this Agreement as a whole, as the
same from time to time may be amended or supplemented and not any particular
section, paragraph, subparagraph or clause contained in this Agreement. Wherever
from the context it appears appropriate, each term stated in either the singular
or plural shall include the singular and the plural, and pronouns stated in
masculine, feminine or neuter gender shall include the masculine, feminine and
the neuter.
2. Employment.
(a) Duration. The Company agrees to employ the Executive and
the Executive accepts such employment for the period (the "Employment Period")
beginning on the date hereof and ending upon the first to occur of (i) December
31, 2001, (ii) the Executive's voluntary resignation, (iii) the date on which
the Executive is terminated for Cause, (iv) the date on which the Board
determines in its discretion that the Executive's employment with the Company is
no longer in the best interest of the Company (in which latter event, the
Executive will be entitled to severance pay as described in Section 2(d) below)
(termination pursuant to this clause (iv) is sometimes referred to in this
Agreement as "termination without Cause"), (v) the Executive's death, (vi) the
Executive's Disability, or (vii) the sale of the Company to an Independent Third
Party (including without limitation, by merger, consolidation, sale of all or
substantially all of its assets, sale of all of the outstanding Common Stock or
otherwise). For purposes hereof, the term "Independent Third Party" means any
person who, prior to any sale of the company referred to in clause (vii), does
not own in excess of 5% of the Company's common stock on a fully-diluted basis,
who is not controlling, controlled by or under common control with any such 5%
owner of the Company's common stock and who is not the spouse, ancestor or
descendant (by birth or adoption) of any such 5% owner of the Company's common
stock. The Executive agrees to give the Board at least 90 days prior written
notice of his resignation. In the event the Executive's Employment shall be
terminated without Cause, the Company and the Executive shall in good faith
agree on a form of public announcement to be made by the Company in connection
with such termination of employment.
(b) Salary and Benefits. During the Employment Period, the
Company will pay the Executive a base salary at the rate of $250,000 per annum
(the "Base Salary"), payable in installments consistent with the
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Company's normal payroll schedule, subject to applicable withholding and other
taxes. The Executive's Base Salary shall be reviewed at least annually for merit
increases and may, by action and in the sole discretion of the Board, be
increased at any time or from time to time. The Executive's Base Salary
(including any increase thereto made pursuant to the preceding two sentences)
for any partial year during the Employment Period will be prorated based upon
the number of days elapsed in such year. In addition to the salary payable to
Executive pursuant to this Section 2(b), the Executive will be entitled to the
following benefits during the Employment Period, unless otherwise altered by the
Board:
(i) The Executive will be entitled to participate in
all medical and hospitalization, dental, group life insurance, and any
and all other fringe benefit plans as are presently and hereinafter
provided by the Company to its executives.
(ii) The Executive will be entitled to reimbursement
for reasonable business expenses incurred by the Executive, upon
submission of appropriate substantiation by the Executive.
(iii) The Company shall provide the Executive with
the use of a leased automobile (either a Lincoln Town Car or a vehicle
of similar cost).
(v) The Company shall provide the Executive with
furnished rental living accommodations in the Madison/Portage Wisconsin
geographic area. Such accommodations shall be selected by the
Executive; however, the rental terms (including, without limitation,
the amount of the periodic lease payments) shall be reasonably
acceptable to the Company. The Company shall be responsible for any
security deposit (and shall be entitled to any refund thereof), as well
as all utility and incidental expenses in connection therewith.
(vi) The Company shall, upon the receipt of proper
substantiation, reimburse the Executive for amounts actually paid by
him for air travel for him and his spouse between Detroit, Michigan and
Madison, Wisconsin.
(c) Services. During the Employment Period, the Executive will
serve as the President and Chief Executive Officer of the Company and will
render such services of an executive and administrative character to the Company
as the Board or the Chairman of the Board may from time to time direct. The
Executive will devote his best efforts and his business time and attention
(except for vacation periods and reasonable periods of illness or other
incapacity) to the business of the Company and its Affiliates. During the
Employment Period, the Executive will serve as a member of the Board.
(d) Severance Pay; Continuation of Certain Benefits. In the
event that the Executive's employment is terminated by the Board without Cause
pursuant to Section 2(a)(iv) above, the Company will pay to the Executive all
amounts due to the Executive as Base Salary pursuant to Section 2(b) above for
a period of twelve months after the date on which the Executive's
employment is terminated pursuant to Section 2(a)(iv) hereof. Any such
severance pay shall be payable in installments on the payment dates on which
such Base Salary would have been paid if the Employment Period had continued
for such twelve month period and, except as otherwise provided in the next
sentence and in Section 2(e) hereof, the Company will have no further
obligation to the Executive. During twelve month period commencing on the date
the Executive's employment is terminated without Cause pursuant to Section
2(a)(iv) above (the "Continuation Period"), the Company will use its best
efforts to cause the Executive, his spouse and dependents to be provided with
medical, dental and any other health benefits and coverage in amounts and on
terms no less favorable than provided immediately prior to the expiration of
the Employment Period, and in all other respects shall use all reasonable
efforts to cause the Executive to be treated in a manner that will cause him to
remain eligible for said coverage through and until the expiration of the
Continuation Period, at no cost to him (subject, however, to (x) any applicable
deductibles, (y) applicable co-payment charges, and (z) the employee portion of
premium charges, if applicable).
(e) Incentive Compensation. The Executive shall be entitled to
receive incentive compensation with respect to the period beginning on the date
hereof and ending December 31, 1997 by action and in an amount determined in the
discretion of the Board. The Company and the Executive acknowledge that the
target amount of such incentive compensation for the Company's 1997 fiscal year
shall be $150,000 (which shall be
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prorated for the period from the date hereof through December 31, 1997), based
on the Board's assessment of the Executive's performance. The Executive shall
also be entitled to receive incentive compensation (the "Incentive
Compensation") with respect to each of the Company's fiscal years ending
December 31, 1998, 1999, 2000 and 2001 (a "Bonus Year"), in an amount
determined pursuant to a performance-based plan to be agreed to, in good faith,
by the Company and Executive on or before December 31, 1997. Exhibit A hereto
sets forth certain preliminary understandings of the Company and the Executive
with respect to such performance-based plan. Except as otherwise provided in
the penultimate sentence of this Section 2(e), the Executive shall not be
entitled to any Incentive Compensation with respect to any such fiscal year if
he is not an employee of the Company through the end of such fiscal year. For
purposes of this Agreement, the amount of Incentive Compensation payable with
respect to any fiscal year of the Company (net of any tax or other amount
properly withheld therefrom) shall be paid by the Company to the Executive
within 75 days after the end of such fiscal year; provided, however, that in
the event any Incentive Compensation is paid prior to the issuance of the
Company's audited financial statements with respect to such fiscal year, any
amount paid shall be subject to increase or decrease based upon the results of
such audited financial statements. Notwithstanding the foregoing, if the
Executive's employment hereunder is terminated without Cause during any of the
fiscal years ending December 31, 1998, 1999, 2000 or 2001, then notwithstanding
the fact that the Executive is not employed by the Company through the end of
the fiscal year in which such termination occurs, the Executive shall be
entitled to receive the Incentive Compensation that would have otherwise been
payable to him had he been employed by the Company through the end of such
fiscal year, prorated based upon the number of days elapsed in such year
through the effective date of such termination without Cause. Any such prorated
Incentive Compensation shall be paid to the Executive within 75 days after the
end of such fiscal year; provided, however, that in the event any Incentive
Compensation is paid prior to the issuance of the Company's audited financial
statements with respect to such fiscal year, any amount paid shall be subject
to increase or decrease based upon the results of such audited financial
statements.
3. Nondisclosure. While employed by the Company and during the periods
described in the last sentence of this Section 3 the Executive (a) will receive
and hold all Company Information in trust and in strictest confidence, (b) will
take reasonable steps to protect the Company Information from disclosure and
will in no event take any action causing, or fail to take any action reasonably
necessary to prevent, any Company Information to lose its character as Company
Information, and (c) except as required by the Executive's duties in the course
of his employment by the Company, will not, directly or indirectly, use,
disseminate or otherwise disclose any Company Information to any third party
without the prior written consent of the Company, which may be withheld in the
Company's absolute discretion. The provisions of this Section 3 shall survive
the termination of the Executive's employment (i) for a period of three years
with respect to Confidential Information, and (ii) with respect to Trade
Secrets, for so long as any such information qualifies as a Trade Secret under
applicable law.
4. Books and Records. All books, records, reports, writings, notes,
notebooks, computer programs, sketches, drawings, blueprints, prototypes,
formulas, photographs, negatives, models, equipment, chemicals, reproductions,
proposals, flow sheets, supply contracts, customer lists and other documents
and/or things relating in any manner to the business of the Company and its
Affiliates (including but not limited to any of the same embodying or relating
to any Confidential Information or Trade Secrets), whether prepared by the
Executive or otherwise coming into the Executive's possession, shall be the
exclusive property of the Company and shall not be copied, duplicated,
replicated, transformed, modified or removed from the premises of the Company
except pursuant to the business of the Company and its Affiliates and shall be
returned immediately to the Company on termination of the Executive's employment
hereunder or on the Company's request at any time.
5. Inventions and Patents. The Executive agrees that all inventions,
innovations or improvements in the Company's method of conducting its business
(including new contributions, improvements, ideas and discoveries, whether
patentable or not) conceived or made by him during his employment with the
Company belong to the Company. The Executive will promptly disclose such
inventions, innovations or improvements to the Board and perform all actions
reasonably requested by the Board to establish and confirm such ownership.
6. Other Businesses. During the Employment Period, the Executive agrees
that he will not, except with the express written consent of the Board, become
engaged in, render services for, or permit his name to be used in connection
with, any business other than the business of the Company and its Subsidiaries
and Affiliates.
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7. Noncompetition. During the one year period following the expiration
of the Employment Period, the Executive will not, directly or indirectly,
engage in or have any interest in any sole proprietorship, partnership,
corporation, limited liability company or business or any other Person (other
than the Company or any of its Subsidiaries), whether as an employee, officer,
director, partner, agent, security holder, creditor, consultant or otherwise,
that directly or indirectly is engaged in the design, manufacture or sale of
(a) pickup truck bedliners or (b) any other light truck accessory that is sold
by the Company or any of its Subsidiaries as of the date hereof, in the United
States of America, Australia, Brazil or Mexico; provided, however, that nothing
herein shall be deemed to prevent the Executive from acquiring through market
purchases and owning, solely as an investment, less than one percent in the
aggregate of the equity or debt securities of any class of any issuer whose
shares are registered under Section 12(b) or 12(g) of the Securities Exchange
Act of 1934, as amended, and are listed or admitted for trading on any United
States national securities exchange or are quoted on the National Association
of Securities Dealers Automated Quotations System, or any similar system of
automated dissemination of quotations of securities prices in common use, so
long as he is not a member of any "control group" (within the meaning of the
rules and regulations of the United States Securities and Exchange Commission)
of any such issuer. The Executive agrees that the covenant provided for in this
Section 7 is reasonable and necessary in terms of time, activity and territory
to protect the Company's interests and in protecting (i) the Trade Secrets,
(ii) substantial relationships of the Company and its Subsidiaries with
customers throughout the United States of America, Australia, Brazil and
Mexico, and (iii) customer goodwill associated with the business of the Company
and its Subsidiaries. The Executive acknowledges that this Section 7 may be
enforced by the Company and any other permitted assignees of the Company. To
the extent that the covenant provided for in this Section 7 may later be deemed
by a court to be too broad to be enforced with respect to its duration or with
respect to any particular activity or geographic area, the court making such
determination shall have the power to reduce the duration or scope of the
provision, and to add or delete specific words or phrases to or from the
provision.
8. Non-Solicitation. The Executive agrees that during the Employment
period and during the two year period following the expiration of the Employment
Period, he will not, directly or indirectly, solicit for employment or employ
(or attempt to solicit for employment or employ), for himself or on behalf of
any sole proprietorship, partnership, corporation, limited liability company or
business or any other Person (other than the Company or any of its Subsidiaries)
any of the employees of the Company or any of its Subsidiaries or encourage any
such employee to leave his or her employment with the Company or any of its
Subsidiaries.
9. Notices. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, or mailed by certified or
registered mail, return receipt requested, postage prepaid to the recipient at
the address below indicated:
To the Company:
c/o Trivest II, Inc.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: General Counsel
To Executive:
c/o Penda Corporation
0000 X. Xxxxxxxxx Xxxxxx
P.O. Box 449
Portage, Wisconsin 53901-0449
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or mailed.
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10. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
11. Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
12. Counterparts. This Agreement may be executed on separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement. Any telecopied signature shall
be deemed a manually executed and delivered original.
13. Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by the Executive and the Company and
their respective successors and assigns (and, in case of the Executive, heirs
and personal representatives), except that Executive may not assign any of his
rights or delegate any of his obligations hereunder.
14. Remedies. The Company will be entitled to enforce its rights under
this Agreement specifically, to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that the
Company may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief in
order to enforce or prevent any violations of the provisions of this Agreement.
15. Damages. Nothing contained herein shall be construed to prevent any
party hereto from seeking and recovering from the other damages sustained by
either or both of them as a result of its or his breach of any term or provision
of this Agreement. In the event that either party hereto brings suit for the
collection of any damages resulting from, or for the injunction of any action
constituting, a breach of any of the terms or provisions of this Agreement, then
the party found to be at fault shall pay all reasonable costs, fees (including
reasonable attorneys' fees) and expenses of the other party.
16. Choice of Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Florida without regard to conflicts of
laws principles thereof and all questions concerning the validity and
construction hereof shall be determined in accordance with the laws of said
state. Each party hereby irrevocably submits to the exclusive jurisdiction of
any state or federal court sitting in the County of Dade, State of Florida in
any action or proceeding arising out of or relating to this Agreement and hereby
irrevocably agrees, on behalf of himself or itself and on behalf of such party's
successor's and assigns, that all claims in respect of such action or proceeding
may be heard and determined in any such court and irrevocably waives any
objection such person may now or hereafter have as to the venue of any such
suit, action or proceeding brought in such a court or that such court is an
inconvenient forum. The parties further agree that the mailing by certified or
registered mail, return receipt requested, to the addresses specified for notice
in this Agreement, of any process or summons required by any such court shall
constitute valid and lawful service of process against them, without the
necessity for service by any other means provided by statute or rule of court.
In the event that an action or proceeding arising out of or relating to this
Agreement shall be commenced in a court described in the second sentence of this
Section 16 and such court, by a final and nonappealable order, shall refuse to
exercise in personam jurisdiction over the Company or the Executive, as the case
may be, then the parties hereto shall not be precluded from litigating such
action or proceeding in any other court of competent jurisdiction.
17. Waiver of Jury Trial. THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED
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WITH THIS AGREEMENT, THE RELATED DOCUMENTS OR THE RELATIONSHIP ESTABLISHED
HEREUNDER.
18. Amendments and Waivers. No provision of this Agreement may be
amended or waived without the prior written consent of the parties hereto.
19. Business Days. Whenever the terms of this Agreement call for the
performance of a specific act on a specified date, which date falls on a
Saturday, Sunday or legal holiday, the date for the performance of such act
shall be postponed to the next succeeding regular business day following such
Saturday, Sunday or legal holiday.
20. No Third Party Beneficiary. Except for the parties to this
Agreement and their respective successors and assigns, nothing expressed or
implied in this Agreement is intended, or will be construed, to confer upon or
give any person other than the parties hereto and their respective successors
and assigns any rights or remedies under or by reason of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
PENDA CORPORATION
By: __________________________________
Xxxxx X. Xxxxxxxx
Chairman of the Board
______________________________________
XXXX X. XXXXXXXX
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EXHIBIT A
PRELIMINARY INCENTIVE COMPENSATION TERMS
1. The target amount for annual Incentive Compensation shall be $150,000.
2. The target amount will be earned if performance objectives in a
mutually agreed upon plan for the business are met.
3. The actual Incentive Compensation for any Bonus Year can be lower or
higher than the target amount, depending on the Company's performance
relative to the agreed upon performance objectives.
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