EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into on July 28, 1994
by and between Xxxxxxx X. Bear, an individual ("Executive"), and Aaron's
Automotive Products, Inc., a Missouri 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 Executive Vice President
and General Manager and Executive hereby accepts 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, as Executive Vice President and General
Manager, 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.
(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 or 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 and Four Thousand Dollars
($104,000) payable on a weekly basis, subject to increase at the sole
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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. OPTION AND BONUS PLANS.
(a) PARTICIPATION. During the term hereof, Executive shall be
entitled to participate in any stock option plan (an "Option Plan") and any
bonus or incentive plan (a "Bonus Plan") of the Company currently made
available by the Company to executive employees of the Company or which may
be made available in the future to executive employees of the Company,
subject to and on a basis consistent with the terms, conditions and
administration of any such plan. Executive understands that any such plan may
be modified or eliminated in the Company's discretion in accordance with
applicable law.
(b) OPTIONS. Executive shall be entitled to receive incentive
stock options ("ISOs") of Aftermarket Technology Holdings Corp., a Delaware
corporation ("Holdings") which owns all of the shares of capital stock of
Aftermarket Technology Corp., a Delaware corporation ("ATC"), which in its
turn owns all of the shares of capital stock of the Company, to purchase
Eleven Thousand Six Hundred and Ninety Six (11,696) shares of common stock of
Holdings (the "Common Stock"). Such ISOs shall vest for so long as Executive
shall be employed under this Agreement, as follows: (i) one-third on the
first anniversary of the date of their grant; (ii) one-third on the third
anniversary of the date of their grant; and (iii) one-third on the fifth
anniversary of the date of their grant. The ISOs shall have an exercise price
equal to the price paid by Aurora Equity Partners L.P. for Common Stock
Holdings on or before August 2, 1994.
ISOs granted to Executive as described above pursuant to an Option
Plan shall expire no sooner than ten (10) years from the date of their grant.
(c) BONUSES. If, among other matters, ATC, achieves the
management budget to be adopted by the Company for a full fiscal year and
throughout such fiscal year Executive is employed pursuant to this Agreement,
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the Board may, at its sole discretion, grant Executive a bonus during the term
of this Agreement equal to one hundred percent (100%) of his then annual base
salary.
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 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.
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(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 two (2) months within any four (4) 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 DURING THE INITIAL TERM. In the event
Executive's employment is terminated without "cause", as defined above, the
Company shall pay Executive as severance an amount equivalent to his then
base salary for the remaining period of the Initial Term, 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) TERMINATION PERIOD AFTER THE INITIAL TERM. In the event
that the term of this Agreement is extended pursuant to Section 1(e) hereof
(an "Extension Period") and during such Extension Period Executive's
employment is terminated without "cause", as defined above, the Company shall
pay Executive as severance an amount equal to twelve (12) months of his then
base salary, less standard withholdings for tax and social security
purposes, payable over such twelve (12) month term in weekly PRO RATA
payments commencing as of the Termination Date.
(iii) 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; 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 the
same severance payments provided in paragraphs 5(d)(i) and (5)(d)(ii), as
applicable.
(e) BENEFITS UPON TERMINATION. All benefits provided under
paragraph 2(b) hereof shall be extended, at Executives' 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
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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, the Consulting Agreement, if any, 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 of the Company to terminate his
or her employment in order to become an employee, consultant or independent
contractor to or for any other employer.
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:
Aaron's Automotive Products, 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
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To Executive:
Xxxxxxx X. Bear
Aaron's Automotive Products, Inc.
0000 X. Xxxxxxxx
Xxxxxxxxxxx, 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.
(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) ATTORNEYS 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.
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(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 Missouri.
IN WITNESS WHEREOF, the parties have executed this agreement effective
as of the date it is last executed below by either party.
/s/ Xxxxxxx X. Bear
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XXXXXXX X. BEAR
AARON'S AUTOMOTIVE PRODUCTS, INC.
/s/ Xxxxx X. Xxxx
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By: --------------------------
Title: President
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