Exhibit 10.24
EMPLOYMENT AGREEMENT
AGREEMENT, made as of this 1st day of March, 1999, by and among MILLBROOK
CAPITAL MANAGEMENT INC. ("MCM"), KEY COMPONENTS, INC., a New York corporation
(the "Company"), having its executive offices and principal place of business in
New York, New York, and XXXXXX XXX the undersigned individual ("Executive").
In consideration of the mutual covenants and agreements hereinafter set
forth, the Company and Executive agree as follows:
1. Employment. The Company hereby agrees to employ Executive in the
position of Chief Financial Officer, subject to the terms and conditions
hereinafter set forth and Executive hereby accepts such employment. Executive
shall have those responsibilities, duties, and authorities consistent with his
status as an executive of the Company. Executive shall report to the President
of the Company, and shall serve in such other executive capacities with the
Company or its affiliates, without additional compensation, as may be assigned
by the President from time to time. During the Employment Term (as defined
herein), Executive shall faithfully, honestly, and diligently serve the Company,
shall use his best efforts to promote the interests of the Company, and shall
devote all of his business time, attention, skill, and efforts to the
performance of his duties hereunder.
2. Employment Term. Executive's employment with the Company shall be for a
term commencing on December 21, 1998 and ending on December 21, 2003, unless
sooner terminated pursuant to the provisions hereof. Without regard to anything
else in this Agreement, the provisions of Sections 5, 6, and 7 shall survive and
remain in effect notwithstanding the termination of the Employment Term or a
breach or repudiation or alleged breach or repudiation by either party to this
Agreement of any one or more of its terms.
3. Compensation and Benefits.
(a) Base Salary. The base salary ("Base Salary") of Executive for
employment hereunder shall be $250,000 per calendar year. Such amount shall be
paid to Executive by either or both of the Company and MCM (on behalf of the
Company). Executive shall be eligible for an annual increase to the Base Salary
on each January 1 (each, an "Increase Date") during the Employment Term, which
increase shall be equal to the percentage increase of the Consumer Price Index
(the "CPI") over the year preceding the Increase Date calculated by comparing
the CPI for the month of December immediately preceding the Increase Date in
question to the CPI for the prior December. As used in this Agreement the term
"Consumer Price Index" shall mean the Consumer Price Index for All Urban
Consumers (1982-84 = 100) specified for "All Items" issued by the Bureau of
Labor Statistics of the U.S. Department of Labor or the successor thereto. The
Base Salary shall be payable in installments consistent with the Company's
payroll practices then in effect. In addition, in the sole discretion of the
Company, Executive shall be eligible for a merit increase in the Base Salary
after his second year of employment hereunder.
(b) Incentive Compensation. During the Employment Term, Executive
shall be eligible for an annual cash bonus in respect of each calendar year of
up to 50% of the Base Salary, to be paid within thirty (30) days after the
annual audited financial statements of the Company are delivered to the Company
by the Company's accountants. One-half of such bonus shall be based on
Executive's achievement of yearly individual performance goals and one-half
shall be based on the Company's achievement of yearly Company performance goals
in each case to be jointly established by the Company and Executive. In
addition, any such bonus received shall be pro rated in respect of any partial
year during the Employment Term.
(c) Vacation. Upon completion of six months of continuous employment
hereunder, Executive shall accrue 10 days of paid vacation. Thereafter,
Executive will be entitled to receive a total of 20 days of paid vacation per
calender year, which shall accrue monthly on a ratable basis, provided, however,
that Executive shall not be entitled to carry forward unused vacation days from
year to year or to be compensated for any unused vacation days upon termination
of this Agreement.
(d) Benefits. During the Employment Term, the Company shall allow
Executive to participate in, to the extent Executive is eligible, the benefit
plans and programs, including medical plans, generally provided to employees of
the same level and responsibility as Executive. Nothing in this Agreement shall
preclude the Company from terminating or amending from time to time any employee
benefit plan or program.
(e) Travel and Business Expenses. Upon submission of itemized
expense statements in the manner specified by the Company, Executive shall be
entitled to reimbursement for reasonable travel and other reasonable business
expenses duly incurred by Executive in the performance of Executive's duties
under this Agreement in accordance with the policies and procedures established
by the Company from time to time for employees of the same level and
responsibility as Executive.
(f) No Other Compensation or Benefits; Payment. The compensation and
benefits specified in Sections 3 and 5 of this Agreement shall be in lieu of any
and all other compensation and benefits. Payment of all compensation and
benefits to Executive hereunder shall be made in accordance with the relevant
Company policies in effect from time to time, including normal payroll
practices, and shall be subject to all applicable employment and withholding
taxes.
(g) Car Allowance. The Company shall either (i) assume all costs
relating to the car currently leased by Executive, or (ii) lease on behalf of
Executive a car of comparable quality to the car currently leased by Executive
and reimburse Executive for all costs associated therewith, including reasonable
insurance and parking expenses.
(h) Cessation of Employment. In the event Executive shall cease to
be employed by the Company for any reason, then Executive's compensation and
benefits shall cease on the date of such event, except as otherwise provided
herein or in any applicable employee benefit plan or
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program.
4. Termination. Executive's employment with the Company and the Employment
Term shall terminate prior to December 21, 2003 upon occurrence of the first of
the following events:
(a) On the date of Executive's death, retirement, or voluntary
termination;
(b) Upon written notice by the Company to Executive of a termination
for Disability. For purposes of this Agreement, "Disability" shall mean
Executive's failure to perform the material duties of his position by reason of
mental or physical illness or incapacity for either (i) ninety (90) days within
any six-month period, or (ii) sixty (60) consecutive days, and within thirty
(30) days after written notice of termination is given shall not have returned
to the performance of Executive's duties hereunder on a full-time basis; or
(c) Upon written notice by the Company to Executive of a termination
with or without Cause on the date indicated in such notice. For purposes of this
Agreement, "Cause" shall mean: (i) Executive's conviction of, or indictment for
or pleading nolo contendere to, a felony or a crime involving moral turpitude;
(ii) Executive's willful misconduct or gross negligence with regard to the
Company or its affiliates or their business, assets or employees (including but
not limited to Executive's fraud, embezzlement, or other act of dishonesty with
regard to the Company (excluding good faith expense account disputes)); (iii)
Executive's refusal promptly to follow any lawful direction of the Board or more
senior officer or Executive's failure to attempt to perform his duties
hereunder; (iv) Executive's breach of any fiduciary duty owed to the Company or
its affiliates or breach of the provisions of Sections 6 and 7 hereof; (v) use
of alcohol or other chemical substance in a manner adversely affecting
Executive's ability to perform his duties hereunder; or (vi) any other breach by
Executive of this Agreement that remains uncured for ten (10) days after written
notice thereof is given to Executive.
5. Consequences of Termination of Employment. (a) Upon the
termination of Executive's employment and the Employment Term, the Company shall
pay and provide Executive (or, if applicable, his surviving spouse or, if none,
his estate) the following amounts and benefits: (i) any unpaid Base Salary; (ii)
reimbursement for any expenses incurred in connection with the business of the
Company prior to his date of termination to which he would be otherwise
entitled; and (iii) any benefits, fringes, or payments, if any, due under any
benefit, fringe benefit, or incentive plan or arrangement in accordance with the
terms of said plan or arrangement due for the period prior to such termination
(the payments referred to in Section 5(a)(i),(ii) and (iii) hereof are
collectively referred to herein as the "Accrued Benefits").
(b) If Executive's employment is terminated by the Company without
Cause (and other than for Disability), in addition to the Accrued Benefits, the
Company shall, subject to Executive's execution of a general release of all
claims and rights that Executive may have against the Company and its related
entities and their respective officers, directors, and employees, including but
not limited to all claims and rights relating to Executive's employment and/or
termination, in a form
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acceptable to the Company, continue to pay Executive (or, if applicable, his
surviving spouse or, if none, his estate) his then current Base Salary for a
period of twelve (12) months (the "Severance"), provided that the Severance
payments shall be offset by any amounts earned by Executive through other
employment, consulting position, or unemployment benefits. The Severance is
expressly understood and agreed not to be salary or payroll compensation to an
employee, but rather, severance to a former employee. Executive shall have no
obligation to mitigate with regard to the Severance; but Executive shall notify
the Company in writing of any unemployment benefits or employment or consulting
activities he is engaged in, keep the Company informed of whether it is on a
full or part-time basis, and provide the Company with such other details as it
shall reasonably request. Notwithstanding anything herein to the contrary, the
Severance payments shall immediately terminate if Executive breaches any of the
provisions of Sections 6 or 7 of this Agreement.
6. Exclusive Employment; Noncompetition.
(a) No Conflict: No Other Employment. During the period of
Executive's employment with the Company, Executive shall not: (i) engage in any
activity which conflicts or interferes with or derogates from the performance of
Executive's duties hereunder, nor shall Executive engage in any other business
activity, whether or not such business activity is pursued for gain or profit,
except as approved in advance in writing by the Company; or (ii) accept any
other full-time or substantially full-time employment, whether as an executive
or consultant or in any other capacity, and whether or not compensated therefor.
(b) No Competition. Without limiting the generality of the
provisions of Sections 6 or 7, during the period of Executive's employment with
the Company, any Severance Period (as defined below), and for a period of two
years thereafter (the "Restricted Period"), Executive shall not, directly or
indirectly, own, manage, operate, join, control, participate in, invest in, or
otherwise be connected or associated with, in any manner, including as an
officer, director, employee, partner, stockholder, joint venturer, lender,
consultant, advisor, agent, proprietor, trustee or investor, any Competing
Business located in the United States or in any other location where the Company
operates or sells its products or services; provided, however, that, if
Executive's employment hereunder is terminated by the Company under Section
5(b), then the provisions of this Section 6(b) shall remain in effect only so
long as the Company continues to pay to Executive amounts as severance pursuant
to Section 5(b).
(i) As used in this Agreement, the term "Competing Business"
shall mean any business or venture which engages in any business area or sells
or provides products or services that compete or overlap with any business area
in which the Company engages or contemplates engaging in, or the products or
services as sold or provided, or as contemplated to be sold or provided, by the
Company.
(ii) For purposes of this Section 6, the term "invest" shall
not preclude an investment in not more than one percent (1%) of the outstanding
capital stock of a corporation whose capital stock is listed on a national
securities exchange or included in the NASDAQ Stock Market,
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so long as Executive does not have the power to control or direct the management
of, or is not otherwise associated with, such corporation.
(c) No Solicitation of Employment. Executive shall not at any time
solicit or encourage any employee of the Company to leave the employ, or cease
his or her relationship with, the Company for any reason, nor employ such an
employee in a Competing Business or any other business.
(d) Company Customers. Executive shall not at any time, directly or
indirectly, contact, solicit or do business with any "customers" (as defined
below) of the Company for the purpose of selling or providing any product or
service then sold or provided by the Company to such customers or proposed to be
sold or provided to such customers during Executive's employment by the Company
or at the time of termination of Executive's employment hereunder.
For the purposes of the provisions of this Section 6, "customer"
shall include any entity that purchased any product or service from the Company
during the Employment Term. The term "customer" also includes any former
customer or potential customer of the Company which the Company has solicited
during the Employment Term, for the purpose of selling or providing any product
or service then sold or provided, or then contemplated to be sold or provided,
by the Company.
(e) Modification of Covenants. The restrictions against competition
set forth in this Section 6 are considered by the parties to be reasonable for
the purposes of protecting the business of the Company. However, if any such
restriction is found by any court of competent jurisdiction to be unenforceable
because it exceeds for too long a period of time or over too great a range of
activities or in too broad a geographic area, it shall be interpreted to extend
only over the maximum period of time, range of activities, or geographic area as
to which it may be enforceable.
7. Confidential Information.
(a) Existence of Confidential Information. The Company owns and has
developed and compiled, and will develop and compile, certain proprietary
technology, know-how and confidential information which have great value to its
business (referred to in this Agreement, collectively, as "Confidential
Information"). Confidential Information includes not only information disclosed
by the Company to Executive, but also information developed or learned by
Executive during the course or as a result of employment with the Company, which
information shall be the property of the Company. Confidential Information
includes all information that has or could have commercial value or other
utility in the business in which the Company is engaged or contemplates
engaging, and all information of which the unauthorized disclosure could be
detrimental to the interests of the Company, whether or not such information is
specifically labeled as Confidential Information by the Company. By way of
example and without limitation, Confidential Information includes any and all
information developed, obtained, licensed by or to, or owned by the Company
concerning trade secrets, techniques, know-how (including research data,
designs, plans, procedures,
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merchandising, marketing, distribution, and warehousing know-how, processes, and
research records), software, computer programs, and any other intellectual
property created, used or sold (through a license or otherwise) by the Company,
product know-how and processes, innovations, discoveries, improvements,
research, development, test results, reports, specifications, data, formats,
marketing data and plans, business plans, strategies, forecasts, unpublished
financial information, orders, agreements, and other forms of documents, price
and cost information, merchandising opportunities, expansion plans, budgets,
projections, customer, supplier, licensee, licensor and subcontractor
identities, characteristics, agreements and operating procedures, and salary,
staffing, and employment information.
(b) Protection of Confidential Information. Executive acknowledges
and agrees that in the performance of duties hereunder Executive will develop
and acquire, and the Company will disclose to and entrust Executive with,
Confidential Information which is the exclusive property of the Company and
which Executive may possess or use only in the performance of duties for the
Company. Executive also acknowledges that Executive is aware that the
unauthorized disclosure of Confidential Information, among other things, may be
prejudicial to the Company's interests, an invasion of privacy, and an improper
disclosure of trade secrets. Executive shall not, directly or indirectly, use,
make available, sell, disclose, or otherwise communicate to any corporation,
partnership, individual, or other third party, other than in the course of
Executive's assigned duties and for the benefit of the Company, any Confidential
Information, either during the Employment Term or thereafter. In the event
Executive desires to publish the results of Executive's work for or experiences
with the Company through literature, interviews, or speeches, Executive will
submit requests for such interviews or such literature or speeches to the
Company's Board at least fourteen (14) days before any anticipated dissemination
of such information for a determination of whether such disclosure is in the
best interests of the Company, including whether such disclosure may impair
trade secret status or constitute an invasion of privacy. Executive agrees not
to publish, disclose or otherwise disseminate such information without the prior
written approval of the Company's Board.
(c) Delivery of Records, Etc. In the event Executive's employment
with the Company ceases for any reason, Executive will not remove from the
Company's premises without its prior written consent any records, notes,
notebooks, files, drawings, documents, equipment, materials, and writings
received from, created for or belonging to the Company, including those which
relate to or contain Confidential Information, or any copies thereof. Upon
request or when employment with the Company terminates, Executive will
immediately deliver to the Company any of the same still in his custody or
control.
8. Assignment and Transfer
(a) Company. This Agreement shall inure to the benefit of and be
enforceable by, and may be assigned by the Company to: (i) any purchaser of all
or substantially all of the Company's business or assets; (ii) any successor to
the Company; and/or (iii) any assignee of the Company (whether direct or
indirect, by purchase, merger, consolidation, or otherwise). The Company will
require any such purchaser, successor, or assignee expressly to assume and agree
to perform this
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Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such purchase, succession, or assignment had taken
place.
(b) Executive. Executive's rights and obligations under this
Agreement shall not be transferable by Executive by assignment or otherwise, and
any purported assignment, transfer, or delegation thereof shall be void;
provided, however, that if Executive shall die, all amounts then payable to
Executive hereunder shall be paid in accordance with the terms of this Agreement
to Executive's devisee, legatee, or other designee or, if there be no such
designee, to Executive's estate.
9. Miscellaneous
(a) Other Obligations. Executive represents and warrants that he is
not a party to any other employment agreement and that neither Executive's
employment with the Company nor Executive's performance of Executive's
obligations hereunder will conflict with or violate or otherwise are
inconsistent with any other agreements to which Executive is or has been a party
or with any other obligations, legal or otherwise, which Executive may have.
(b) Nondisclosure: Other Employers. Executive will not disclose to
the Company, or use, or induce the Company to use, any proprietary information,
trade secrets, or confidential business information of others. Executive
represents and warrants that Executive has returned all property, proprietary
information, trade secrets, and confidential business information belonging to
all prior employers.
(c) Cooperation. Following termination of employment with the
Company, Executive shall cooperate with the Company, as requested by the
Company, to affect a transition of Executive's responsibilities and to ensure
that the Company is aware of all matters being handled by Executive.
(d) Protection of Reputation. During the Employment Term and
thereafter Executive agrees that he will take no action which is intended, or
could reasonably be expected, to harm the Company or its reputation or which
could reasonably be expected to lead to unwanted or unfavorable publicity to the
Company.
(e) Governing Law. This Agreement, including the validity,
interpretation, construction and performance of this Agreement, shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in such state without regard
to such state's conflicts of law principles. All actions and proceedings
relating directly or indirectly to this Agreement shall be litigated in any
state court or federal court located in New York, New York. The parties hereto
expressly consent to the jurisdiction of any such court and to venue therein and
consent to the services of process in any such action or proceeding by certified
or registered mailing of the summons and complaint therein directed to Executive
at the address as provided in Section 9(m) hereof and to the Company's
designated agent for service of process (which initially shall be which agent
may be changed by the Company upon thirty (30) days'
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prior written notice to Executive). Each party hereby waives trial by jury in
connection with the trial of any action or dispute in connection with this
Agreement or any matter involving Executive's employment or termination thereof.
(f) Entire Agreement. This Agreement contains the entire agreement
and understanding between the parties hereto in respect of the subject matter
hereof and supersedes, cancels and annuls any prior or contemporaneous written
or oral agreements, understandings, commitments, and practices between them
respecting the subject matter hereof, including all prior employment agreements,
if any, between the Company and Executive, which agreement(s) hereby are
terminated and shall be of no further force or effect.
(g) Amendment. This Agreement may be amended only by a writing which
makes express reference to this Agreement as the subject of such amendment and
which is signed by Executive and, on behalf of the Company, by its duly
authorized officer.
(h) Severability. If any term, provision, covenant or condition of
this Agreement or part thereof, or the application thereof to any person, place
or circumstance, shall be held to be invalid, unenforceable or void, the
remainder of this Agreement and such term, provision, covenant, or condition
shall remain in full force and effect, and any such invalid, unenforceable or
void term, provision, covenant or condition shall be deemed, without further
action on the part of the parties hereto, modified, amended and limited to the
extent necessary to render the same and the remainder of this Agreement valid,
enforceable and lawful. In this regard, Executive acknowledges that the
provisions of Sections 6 and 7 are reasonable and necessary for the protection
of the Company.
(i) Construction. The headings and captions of this Agreement are
provided for convenience only and are intended to have no effect in construing
or interpreting this Agreement. The language in all parts of this Agreement
shall be in all cases construed according to its fair meaning and not strictly
for or against the Company or Executive. The use herein of the word "including,"
when following any general provision, sentence, clause, statement, term or
matter, shall be deemed to mean "including but not limited to." As used herein,
"Company" shall mean the Company and its subsidiaries and any purchaser of,
successor to or assignee (whether direct or indirect, by purchase, merger,
consolidation or otherwise) of all or substantially all of the Company's
business or assets which is obligated to perform this Agreement by operation of
law, agreement pursuant to Section 8 hereof, or otherwise. As used herein, the
words "day" or "days" shall mean a calendar day or days. Should any provision of
this Agreement require interpretation or construction, Executive and the Company
agree that the presumption providing that a document or agreement is to be
interpreted or construed more strictly against the party who or which prepared
such document or agreement shall not apply, it being agreed that both Executive
and the Company have availed themselves of the opportunity to participate in the
preparation of all provisions of this Agreement
(j) Knowing and Voluntary. Executive acknowledges that he has
carefully read this Agreement in its entirety, understands its terms, was
advised to consult and has had an
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opportunity to consult with independent legal counsel about this Agreement, and
is signing it knowingly and voluntarily.
(k) Nonwaiver. No failure or delay by either party in exercising any
right, option, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof, or the exercise of any other right, option, power or
privilege. Neither any course of dealing nor any failure, delay, or neglect of
either party hereto in any instance to exercise any right, option, power, or
privilege hereunder or under law shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof, or the exercise of any other right, option, power, or privilege. All
waivers by either party hereto must be contained in a written instrument signed
by the party to be charged and, in the case of the Company, by its duly
authorized officer.
(l) Remedies for Breach. The parties hereto agree that Executive is
obligated under this Agreement to render personal services during the Employment
Term of a special, unique, unusual, extraordinary, and intellectual character,
thereby giving this Agreement peculiar value, and, in the event of a breach or
threatened breach of any covenant of Executive herein, the injury or imminent
injury to the value and the goodwill of the Company's business could not be
reasonably or adequately compensated in damages in an action at law.
Accordingly, Executive expressly acknowledges that the Company shall be entitled
to specific performance, injunctive relief or any other equitable remedy against
Executive, without the posting of a bond, in the event of any breach or
threatened breach of any provision of this Agreement by Executive (including but
not limited to Sections 6 and 7 hereof). Without limiting the generality of the
foregoing, if Executive breaches Sections 6 or 7 hereof, such breach will
entitle the Company to enjoin Executive from disclosing any Confidential
Information to any Competing Business, to enjoin such Competing Business from
receiving Executive or using any such Confidential Information and/or to enjoin
Executive from rendering personal services to or in connection with such
Competing Business. The rights and remedies of the parties hereto are cumulative
and shall not be exclusive, and each such party shall be entitled to pursue all
legal and equitable rights and remedies and to secure performance of the
obligations and duties of the other under this Agreement, and the enforcement of
one or more of such rights and remedies by a party shall in no way preclude such
party from pursuing, at the same time or subsequently, any and all other rights
and remedies available to it.
(m) Notices. Any notice, request, consent, or approval required or
permitted to be given under this Agreement or pursuant to law shall be
sufficient if in writing, and if and when sent by certified or registered mail,
return receipt requested, to Executive's residence (as reflected in the
Company's records or as otherwise designated by Executive on thirty (30) days'
prior written notice to the Company) or to Executive at the Company's principal
executive office (with copies to the General Counsel), as the case may be. All
such notices, requests, consents, and approvals shall be effective upon being
deposited in the United States mail. However, the time period in which a
response thereto must be given shall commence to run from the date of receipt on
the return receipt of the notice, request, consent, or approval by the addressee
thereof. Rejection or other refusal to accept, or the inability to deliver
because of changed address of which no notice was given as
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provided herein, shall be deemed to be receipt of the notice, request, consent,
or approval sent.
(n) Assistance in Proceedings, Etc. Executive shall, without
additional compensation, during and after expiration of the Employment Term,
upon reasonable notice, furnish such information and proper assistance to the
Company as may reasonably be required by the Company in connection with any
legal or quasi-legal proceeding, including any external or internal
investigation, involving the Company or any of its affiliates or in which any of
them is, or may become, a party.
(o) Survival. Cessation or termination of Executive's employment
with the Company shall not result in termination of this Agreement. The
respective obligations of Executive and rights and benefits afforded to the
Company as provided in this Agreement shall survive cessation or termination of
Executive's employment hereunder. This Agreement shall not terminate upon, and
shall remain in full force and effect following, expiration of the Employment
Term and all rights and obligations of the parties hereto as and to the extent
provided herein shall survive such expiration.
IN WITNESS WHEREOF, the parties have duly executed this Agreement,
all as of the date and year first written above.
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XXXXXX XXX
KEY COMPONENTS, INC.
By:
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Name:
Title:
MILLBROOK CAPITAL MANAGEMENT INC.
By:
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Name:
Title:
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