EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into on April 2, 1996 by
and between J. Xxxxx Xxxxxxxx, an Individual ("Executive"), and Tranzparts,
Inc., a Wisconsin corporation (the "Company").
1. EMPLOYMENT BY THE COMPANY AND TERM.
(a) FULL TIME AND BEST EFFORTS. Subject to the terms set forth
herein, the Company agrees to employ Executive as President and General Manager
and Executive hereby accept such employment. During the term of his employment
with the Company, Executive will devote his full time, best efforts and
attention to the performance of his duties hereunder and to the business and
affairs of the Company.
(b) DUTIES. Executive shall serve in an executive capacity and
shall perform such duties as are customarily associated with his then current
title, consistent with the Bylaws of the Company and as required by the
Company's Board of Directors (the "Board") and the officers to whom the
Executive reports, including Xxxxxxx X. Xxxxx as Chairman and Chief Executive
Officer of Aftermarket Technology Corp., a Delaware corporation and the sole
stockholder of the Company ("ATC"), participating as a member of the
Company's management team in developing and implementing strategic and
operating plans, executing day-to-day general management of the Company,
maintaining and solidifying relationships with the Company's key customers
and supporting the distribution growth, process and efficiency at existing
and future entities affiliated with the Company. Executive will initially
manage and optimize ATC's Chicago and Janesville operations and will be
responsible for integrating Tranzparts into the operations of ATC's other
subsidiaries.
(c) COMPANY POLICIES. The employment relationship between the
parties shall be governed by the general employment policies and practices of
the Company, including but not limited to those relating to protection of
confidential information and assignment of inventions, except that when the
terms of this Agreement differ from or are in conflict with the Company's
general employment policies and practices, this Agreement shall control.
(d) TERM. The initial term of employment of Executive under this
Agreement shall begin as of the date hereof and end on the third anniversary
hereof (such three year period, the "Initial Term"), subject to the provisions
for termination set forth herein and renewal as provided in Section 1(e) below.
(e) RENEWAL. Unless the Company shall have given the Executive
notice that this Agreement shall not be renewed at least two (2) months prior to
the end of the Initial Term, the term of this Agreement shall be automatically
extended for a period of one year, such procedure to be followed in each such
successive period.
2. COMPENSATION AND BENEFITS.
(a) SALARY. Executive shall receive for services to be rendered
hereunder an annual base salary of One Hundred Twenty-Eight Thousand Four
Hundred Eighty Dollars ($128,480) payable on a weekly basis, subject to increase
at the sole discretion of the Board, and subject to standard withholdings for
taxes and social security and the like. The Board of Directors shall review
Executive's salary on an annual basis and may, in their sole discretion,
increase Executive's salary.
(b) PARTICIPATION IN BENEFIT PLANS. During the term hereof,
Executive shall be entitled to participate in any group insurance,
hospitalization, medical, dental, health and accident, disability or similar
plan or program of the Company now existing or established hereafter to the
extent that he is eligible under the general provisions thereof. The Company,
may, in its sole discretion and from time to time, establish additional senior
management benefit programs as it deems appropriate. Executive understands that
any such plans may be modified or eliminated in the Company's discretion in
accordance with applicable law.
(c) VACATION. Executive shall be entitled to a period of annual
vacation time equal to that provided to managers of equal position by the
Company's policies and procedures regarding vacation, but in any event not less
than three weeks per year. The days selected for Executive's vacation must be
mutually agreeable to Company and Executive.
3. BONUSES. If, among other matters, the Company achieves the business
and financial objectives for a full fiscal year and throughout such fiscal year
Executive is employed pursuant to this Agreement, the Board may, at its sole
discretion, grant Executive a bonus during the term of this Agreement up to
fifty percent (50%) of his then annual base salary. Additional performance
awards may be considered at the sole discretion of the Board for outstanding
leadership, integration support, superior business growth, organizational
development and overall contribution to ATC and its subsidiaries.
Notwithstanding the foregoing, Executive shall be eligible for a bonus at the
end of the Company's first fiscal year during the term of this Agreement whether
or not such fiscal year is a full fiscal year.
4. REASONABLE BUSINESS EXPENSES AND SUPPORT. Executive shall be
reimbursed for documented and reasonable business expenses in connection with
the performance of his duties hereunder. Executive shall be furnished
reasonable office space, assistance and facilities.
5. TERMINATION OF EMPLOYMENT. The date on which Executive's employment
by the Company ceases, under any of the following circumstances, shall be
defined herein as the "Termination Date."
(a) TERMINATION FOR CAUSE.
(i) TERMINATION; PAYMENT OF ACCRUED SALARY AND VACATION. The
Board may terminate Executive's employment with the Company at any time for
cause, immediately upon notice to Executive of the circumstances leading to such
termination for cause. In the event that Executive's employment is terminated
for cause, Executive shall receive payment for all
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accrued salary and vacation time through the Termination Date, which in this
event shall be the date upon which notice of termination is given. The Company
shall have no obligation to pay severance of any kind nor to make any payment in
lieu of notice.
(ii) DEFINITION OF CAUSE. "CAUSE" means the occurrence or
existence of any of the following with respect to Executive, as determined by
the Board in its sole discretion: (a) a material breach by the Executive of his
duty not to engage in any transaction that represents, directly or indirectly,
self-dealing with the Company or any of its Affiliates which has not been
approved by the Board or of the terms of his employment, if in any such case
such material breach remains uncured after the lapse of 30 days following the
date that the Company has given the Executive written notice thereof; (b) the
repeated material breach by the Executive of any duty referred to in clause (a)
above as to which at least one written notice has been given pursuant to such
clause (a); (c) any act of dishonesty, misappropriation, embezzlement,
intentional fraud or similar conduct involving the Company or any of its
Affiliates; (d) the conviction or the plea of nolo contendere or the equivalent
in respect of a felony involving moral turpitude; (e) any intentional damage of
a material nature to any property of the Company or any of its Affiliates; (f)
the repeated non-prescription use of any controlled substance or the repeated
use of alcohol or any other non-controlled substance which, in the reasonable
determination of the Board, in any case described in this clause (f), renders
the Executive unfit to serve in his capacity as an officer or employee of the
Company or its Affiliates; or (g) conduct by the Executive which in the
reasonable determination of the Board demonstrates gross unfitness to serve in
his capacity as an officer or employee of the Company or its Affiliates.
(b) VOLUNTARY TERMINATION. Executive may voluntarily terminate his
employment with the Company at any time upon ninety (90) days prior written
notice, after which termination no further compensation of any kind or severance
payment will be payable under this Agreement.
(c) TERMINATION UPON DISABILITY. Company may terminate Executive's
employment in the event Executive suffers a disability that renders Executive
unable to perform the essential functions of his position, even with reasonable
accommodation, for three (3) consecutive months within any six (6) month period.
After the Termination Date, which in this event shall be the date upon which
notice of termination is given, no further compensation will be payable under
this Agreement.
(d) TERMINATION WITHOUT CAUSE.
(i) Termination Payment. In the event Executive's employment
is terminated without "cause," as defined above, or due to disability, as
defined above, the Company shall pay Executive as severance an amount equivalent
to his then base salary for six months, less standard withholdings for tax and
social security purposes, payable over such term in weekly PRO RATA payments
commencing as of the Termination Date.
(ii) Fundamental Changes. In the event that Company makes a
substantial change which results in diminution in the Executive's duties,
authority, responsibility or compensation without performance or market
justification, he may terminate his employment;
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PROVIDED, HOWEVER, that Executive shall provide the Company 15 days' notice
prior to any such termination and the Company shall have until the end of such
15-day period to cure such diminution. A termination in such circumstances
shall be treated as a Company termination without cause and Executive shall be
entitled to his same severance payments provided in paragraph 5(d)(i).
(e) BENEFITS UPON TERMINATION. All benefits provided under paragraph
2(b) hereof shall be extended, at Executive's election and cost, to the extent
permitted by the Company's insurance policies and benefit plans, for one year
after Executive's Termination Date, except (a) as required by law (e.g., COBRA
health insurance continuation election) or (b) in the event of a termination
described in paragraphs 5(a).
(f) TERMINATION UPON DEATH. If Executive dies prior to the
expiration of the term of this Agreement, the Company shall continue coverage of
Executive's dependents (if any) under all benefit plans or programs of the type
listed above in paragraph 2(b) herein for a period of three (3) months.
6. PROPRIETARY INFORMATION OBLIGATIONS. During the term of employment
under this Agreement, Executive will have access to and become acquainted with
the Company's confidential and proprietary information, including but not
limited to confidential and proprietary information or plans regarding the
Company's customer relationships, personnel, or sales, marketing, and financial
operations and methods; trade secrets; formulas; devices; secret inventions;
processes and other compilations of information, records, and specifications
(collectively "Proprietary Information"). Executive shall not disclose any of
the Company's Proprietary Information directly or indirectly, or use it in any
way, either during the term of this Agreement, or at any time thereafter, except
as required in the course of his employment for the Company or as authorized in
writing by the Company. All files, records, documents, computer-recorded
information, drawings, specifications, equipment and similar items relating to
the business of the Company, whether prepared by Executive or otherwise coming
into his possession, shall remain the exclusive property of the Company and
shall not be removed from the premises of the Company under any circumstances
whatsoever without the prior written consent of the Company, except when (and
only for the period) necessary to carry out Executive's duties hereunder, and if
removed shall be immediately returned to the Company upon any termination of his
employment and no copies thereof shall be kept by Executive; PROVIDED, HOWEVER,
that Executive shall be entitled to retain documents reasonably related to his
interest as a shareholder and any documents that were personally owned or
acquired.
7. NONINTERFERENCE. While employed by the Company and for a period of
one year thereafter, Executive agrees not to interfere with the business of the
Company by directly or indirectly soliciting, attempting to solicit, inducing,
or otherwise causing any employee who is an employee of the Company at the time
of such solicitation to terminate his or her employment in order to become an
employee, consultant or independent contractor to or for any other employer.
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8. MISCELLANEOUS.
(a) NOTICES. Any Notices provided hereunder must be in writing and
shall be deemed effective upon the earlier of personal delivery (including
personal delivery by telecopy or telex) or the third day after mailing by first
class mail to the recipient at the address indicated below:
To the Company:
Tranzparts, Inc.
c/o Aurora Capital Partners L.P.
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention; Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
To Executive:
J. Xxxxx Xxxxxxxx
Tranzparts, Inc.
0000 Xxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
or to such other address or to the attention of such other person as the
recipient party will have specified by prior written notice to the sending
party.
(b) SEVERABILITY. If any term or provision (or any portion thereof)
of this Agreement is determined by a court to be invalid, illegal or incapable
of being enforced by any rule of law or public policy, all other terms and
provisions (or other portions thereof) of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or provision (or
any portion thereof), is invalid, illegal or incapable of being enforced, this
Agreement shall be deemed to be modified so as to effect the original intent of
the parties as closely as possible to the end that the transactions contemplated
hereby and the terms and provisions hereof are fulfilled to the greatest extent
possible.
(c) ENTIRE AGREEMENT. This document constitutes the final, complete,
and exclusive embodiment of the entire agreement, and understanding between the
parties related to the subject matter hereof and supersedes and preempts any
prior or contemporaneous understandings, agreements, or representations by or
between the parties, written or oral.
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(d) COUNTERPARTS. This Agreement may be executed on separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
agreement.
(e) SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors and assigns, except that Executive may not assign
any of his duties hereunder and he may not assign any of his rights hereunder
without the prior written consent of the Company.
(f) ATTORNEY'S FEES. If any legal proceeding is necessary to enforce
or interpret the terms of this Agreement, or to recover damages for breach
therefore, the prevailing party shall be entitled to reasonable attorney's fees,
as well as costs and disbursements, in addition to any other relief to which he
or it may be entitled.
(g) AMENDMENTS. No amendments or other modifications to this
Agreement may be made except by a writing signed by both parties. No amendment
or waiver of this Agreement requires the consent of any individual, partnership,
corporation or other entity not a party to this Agreement. Nothing in this
Agreement, express or implied, is intended to confer upon any third person any
rights or remedies under or by reason of this Agreement.
(h) CHOICE OF LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the internal
law, and not the law of conflicts, of the State of Wisconsin.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.
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J. Xxxxx Xxxxxxxx
TRANZPARTS, INC.
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Xxxxxxx X. Xxxxx
Chief Executive Officer
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