Exhibit 10.7
EMPLOYMENT AGREEMENT
by and between
DIAMOND TRIUMPH AUTO GLASS, INC.
and
XXXXXXX XXXXXX
Dated as of
March 31, 1998
This EMPLOYMENT AGREEMENT, dated as of March 31, 1998, by and
between XXXXXXX XXXXXX (the "Employee") and DIAMOND TRIUMPH AUTO GLASS, INC., a
Delaware corporation (the "Company"). As used herein, the term "Companies" shall
refer to the Company and its existing and future subsidiaries.
The Company desires to engage Employee to perform services for
the Companies, and Employee desires to perform such services, on the terms and
conditions set forth below:
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Employment, Term.
The Company will employ the Employee in its business, and the
Employee will work for the Company, for a term of three (3) years, commencing as
of March 31, 1998 and ending on March 31, 2001, upon the terms and subject to
the conditions set forth in this Agreement. Such period, including any
extensions or renewals thereof, is referred to herein as the "Employment
Period".
2. Duties.
2.1 During the Employment Period, the Employee shall serve as
the Executive Vice President, Chief Financial Officer, Treasurer, Secretary and
General Counsel of the Company, and perform duties of an executive character
consisting of administrative and managerial responsibilities on behalf of the
Companies, and shall perform such other duties on behalf of the Companies and
exercise such authority as may from time to time reasonably be delegated to the
Employee by the Board of Directors of the Company consistent with his abilities.
2.2 The Employee shall discharge his duties from the Company's
facility in Kingston, Pennsylvania. The Employee shall also engage in such
reasonable travel in furtherance of his duties set forth in Section 2.1, as
shall be reasonably requested by the Company.
3. Devotion of Time.
Throughout the Employment Period, the Employee shall: (a)
devote substantially all of his working time to the business and affairs of the
Companies; (b) faithfully and diligently perform his duties in conformity with
the directions of the Board of Directors of the Company; (c) devote his best
efforts, energy and skill to the services of the Companies and the promotion of
their interests; and not take part in activities known by the Employee to be
detrimental to the best interests of the Companies.
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4. Compensation.
4.1 In consideration for the services to be performed by the
Employee during the Employment Period hereunder, the Company shall compensate
the Employee at a base salary of $250,000 per annum (the "Base Salary"). Such
salary shall be subject to annual review based on the Companies' and the
Employee's performance.
4.2 The Employee shall be eligible to receive, with respect to
each year of the Employment Period, a bonus (the "Bonus"), as set forth in
Exhibit A hereto (the "Bonus Plan").
5. Reimbursement of Expenses; Additional Benefits.
5.1 The Employee shall receive an automobile allowance for the
use of an automobile owned or leased by him in accordance with the policies and
procedures established by the Company from time to time for executive employees.
5.2 The Company shall pay directly, or reimburse the Employee
for, all other reasonable and necessary business expenses and disbursements
incurred by the Employee for or on behalf of the Company in the performance of
his duties under this Agreement. For such purposes, the Employee shall submit to
the Company itemized written reports of such expenses in accordance with the
policies and procedures established by the Company from time to time.
5.3 The Employee shall be entitled to paid vacations during
the Employment Period in accordance with the then prevalent practices of the
Company for its senior executives; provided, however, that Employee shall be
entitled to such paid vacations for not less than four (4) weeks per annum.
5.4 During the Employment Period, the Employee shall be
entitled to participate in, and to receive benefits under, such employee benefit
plans of the Company (including, without limitation, pension, profit sharing,
bonus, group life insurance and group medical insurance plans) as may exist from
time to time for the Company's senior executives.
6. Representations and Warranties of the Employee.
The Employee represents and warrants to the Company that the
Employee is under no contractual or other restriction or obligation which
conflicts with, violates or is inconsistent with the execution of this
Agreement, the performance of his duties hereunder, or the other rights of the
Company hereunder.
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7. Non-competition.
During the Employment Period, including any unexpired portion
thereof, the Employee 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, without limitation, as an officer, director,
employee, distributor, independent contractor, independent representative,
partner, consultant, advisor, agent, proprietor, trustee or investor, any
Competing Business located in any state or region (including foreign
jurisdictions) where any of the Companies conducts business or is considering
doing business; provided, however, that ownership of 1% or less of the stock or
other securities of a corporation, the stock of which is listed on a national
securities exchange or is quoted on The Nasdaq Stock Market's National Market,
shall not constitute a breach of this Section 7, so long as the Employee does
not in fact have the power to control, or direct the management of, or is not
otherwise engaged in activities with, such corporation.
For purposes hereof, the term "Competing Business" shall mean
any business or venture which is engaged, directly or indirectly, in (i)
developing, manufacturing, marketing, selling and/or distributing (including
wholesale distribution) of automobile or truck glass or windshields or other
glass products utilized in vehicles; repairing, replacing or installing
automobile or truck glass or windshields or other glass products utilized in
vehicles; or selling or installing those kinds of automobile or truck
accessories sold by any of the Companies, (ii) any other business engaged in or
actively being developed by any of the Companies, or (iii) any other business
which is substantially similar to the whole or any significant part of the
business conducted by the Companies.
8. No Solicitation.
During the Employment Period, including any unexpired portion
thereof, the Employee shall not, directly or indirectly, including on behalf of,
for the benefit of, or in conjunction with, any other person or entity, (i)
solicit, assist, advise, influence, induce or otherwise encourage in any way,
any employee of any of the Companies to terminate its relationship with any of
the Companies for any reason, nor assist any person or entity in doing so, or
employ, engage or otherwise contract with any employee or former employee of any
of the Companies in a Competing Business or any other business unless such
former employee shall not have been employed by any of the Companies for a
period of at least one year, (ii) interfere in any manner with the relationship
between any employee and any of the Companies or (iii) contact, service or
solicit any existing clients, customers or accounts of any of the Companies on
behalf of a Competing Business, either as an individual on his own account, as
an investor, or as an officer, director, partner, joint venturer, consultant,
employee, agent or salesman of any other person or entity.
9. Confidential Information.
9.1 "Confidential Information" shall mean confidential records
and information, including, but not limited to, development, marketing,
purchasing, organizational, strategic, financial, managerial, administrative,
manufacturing, production, distribution and sales
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information, distribution methods, data, specifications and processes (including
the Transferred Property as hereinafter defined) presently owned or at any time
hereafter developed by any of the Companies or its agents or consultants or used
presently or at any time hereafter in the course of the business of any of the
Companies, that are not otherwise part of the public domain.
9.2 The Employee hereby sells, transfers and assigns to the
Company, or to any person or entity designated by the Company, all of his entire
right, title and interest in and to all inventions, ideas, methods,
developments, disclosures and improvements (the "Inventions"), whether patented
or unpatented, and copyrightable material, and all trademarks, trade names, all
goodwill associated therewith and all federal and state registrations or
applications thereof, made, adopted or conceived by solely or jointly, in whole
or in part (collectively, the "Transferred Property"), prior to or during the
Employment Period which (i) relate to methods, apparatus, designs, products,
processes or devices sold, leased, used or under construction or development by
any of the Companies or (ii) otherwise relate to or pertain to the business,
products, services, functions or operations of any of the Companies. The
Employee shall make adequate written records of all Inventions, which records
shall be the Company's property and shall communicate promptly and disclose to
the Company, in such form as the Company requests, all information, details and
data pertaining to the aforementioned Inventions. Whether during the Employment
Period or thereafter, the Employee shall execute and deliver to the Company such
formal transfers and assignments and such other papers and documents as may be
required of the Employee to permit the Company, or any person or entity
designated by the Company, to file and prosecute patent applications (including,
but not limited to, records, memoranda or instruments deemed necessary by the
Company for the prosecution of a patent application or the acquisition of
letters patent in the United States, foreign countries or otherwise) and, as to
copyrightable material, to obtain copyrights thereon, and as to trademarks, to
record the transfer of ownership of any federal or state registrations or
applications.
9.3 All such Confidential Information is considered secret and
will be disclosed to the Employee in confidence, and the Employee acknowledges
that, as a consequence of his employment and position with the Company, the
Employee may have access to and become acquainted with Confidential Information.
Except in the performance of his duties as an employee of the Company, the
Employee shall not, during the Employment Period and at all times thereafter,
directly or indirectly for any reason whatsoever, disclose or use any such
Confidential Information. All records, files, drawings, documents, equipment and
other tangible items, wherever located, relating in any way to or containing
Confidential Information, which the Employee has prepared, used or encountered
or shall in the future prepare, use or encounter, shall be and remain the
Company's sole and exclusive property and shall be included in the Confidential
Information. Upon termination of this Agreement, or whenever requested by the
Company, the Employee shall promptly deliver to the Company any and all of the
Confidential Information and copies thereof, not previously delivered to the
Company, that may be in the possession or under the control of the Employee. The
foregoing restrictions shall not apply to the use, divulgence, disclosure or
grant of access to Confidential Information to the extent, but only to the
extent, (i) expressly permitted or required pursuant to any other written
agreement between the Employee and the Company, (ii) such Confidential
Information has been publicly disclosed (not due to a breach by the Employee of
his obligations hereunder, or by breach of any other person, of a fiduciary or
confidential obligation to any of the Companies) or (iii) the
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Employee is required to disclose Confidential Information by or to any court of
competent jurisdiction or any governmental or quasi-governmental agency,
authority or instrumentality of competent jurisdiction, provided, however, that
the Employee shall, prior to any such disclosure, immediately notify the Company
of such requirement and provided further, however, that the Company shall have
the right, at its expense, to object to such disclosures and to seek
confidential treatment of any Confidential Information to be so disclosed on
such terms as it shall determine.
10. Acknowledgement; remedies; survival of this Agreement.
10.1 The Employee acknowledges that violation of any of the
covenants and provisions set forth in this Agreement would cause the Company
irreparable damage and agrees that the Company's remedies at law for a breach or
threatened breach of any of the provisions of this Agreement would be inadequate
and, in recognition of this fact, in the event of a breach or threatened breach
by the Employee of any of the provisions of this Agreement, it is agreed that,
in addition to the remedies at law or in equity, the Company shall be entitled,
without the posting of a bond, to equitable relief in the form of specific
performance, a temporary restraining order, temporary or permanent injunction,
or any other equitable remedy which may then be available for the purposes of
restraining the Employee from any actual or threatened breach of such covenants.
Without limiting the generality of the foregoing, if the Employee breaches or
threatens to breach Sections 7, 8, or 9 hereof, such breach or threatened breach
will entitle the Company to enjoin the Employee from disclosing any Confidential
Information to any Competing Business, to enjoin any Competing Business from
retaining the Employee or using any such Confidential Information, to enjoin the
Employee from engaging in any activities prohibited by Section 8 hereof and/or
to enjoin the Employee from rendering personal services to or in connection with
any 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.
10.2 The provisions of this Agreement shall survive the
termination of the Employee's employment with the Company.
11. Termination of Employment.
11.1 Termination. The Company may terminate the Employee's
employment for Cause (as hereinafter defined), in which case the provisions of
Section 11.2 shall apply. The Company may also terminate the Employee's
employment in the event of the Employee's death or Disability (as hereinafter
defined), in which case the provisions of Section 11.3 shall apply. The Company
may also terminate the Employee's employment for any other reason by written
notice to the Employee, in which case the provisions of Section 11.4 shall
apply. If the Employee's employment is terminated by reason of the Employee's
resignation, the provisions of Section 11.2 shall apply, provided that no
termination of this Agreement shall relieve the Employee from liability for any
breach of this Agreement or defeat or impair the right
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of the Company to pursue such relief as may otherwise be available to it as a
result of any breach of this Agreement or any term, provision or covenant
contained herein.
11.2 Termination for Cause; Resignation. Notwithstanding
anything to the contrary contained herein, in the event that the Employee's
employment hereunder is terminated during the Agreement Term (x) by the Company
for Cause or (y) by reason of the Employee's resignation, then the Company shall
pay to the Employee, within thirty (30) days of the date of such termination,
only the Base Salary through such date of termination. For purposes of this
Agreement, "Cause" shall mean (i) conviction of, or plea of nolo contendere (no
contest) to, any crime (whether or not involving the Company) constituting a
felony in the jurisdiction involved; (ii) engaging in any act involving moral
turpitude; (iii) conduct related to the Employee's employment for which either
criminal or civil penalties against the Employee or any of the Companies may be
sought; (iv) gross neglect in the performance of the Employee's duties
hereunder; (v) misconduct in the performance of the Employee's duties hereunder,
which misconduct continues after notice thereof is given to the Employee by the
Board of Directors of the Company, (vi) willful failure or refusal to perform
such duties as may be delegated to the Employee commensurate with the Employee's
position, which misconduct continues after notice thereof is given to the
Employee by the Board of Directors of the Company, (vii) material violation of
the Company's policies, including, without limitation, those relating to sexual
harassment, the disclosure or misuse of Confidential Information (as hereinafter
defined), or those set forth in Company manuals or statements of policy, which
violation continues after notice thereof is given to the Employee by the Board
of Directors of the Company (viii) engaging in any conduct which is materially
injurious or materially damaging to any of the Companies or the reputation of
any of the Companies; or (ix) material breach of any provision of this Agreement
by the Employee.
11.3 Death or Disability. If, as a result of the Employee's
incapacity due to physical or mental illness, the Employee shall have been
absent from the Employee's duties hereunder for either (i) one hundred eighty
(180) days within any three hundred sixty-five (365) day period, or (ii) one
hundred twenty (120) consecutive days, and within thirty (30) days after written
notice of termination is given shall not have returned to the performance of the
Employee's duties hereunder on a full time basis, the Company may terminate the
Employee's employment hereunder for "Disability." In the event, this Agreement
is terminated by reason of the Employee's death or Disability, the Company shall
pay to the Employee (i) the Base Salary for a period of twelve months (but in no
event beyond March 31, 2001), which Base Salary shall be paid commencing with
such date of termination at the times and in the amounts such Base Salary would
have been paid, and (ii) the amount of any Bonus payable under the Bonus Plan
through such date of termination, which Bonus, if any, shall be payable at the
time provided in the Bonus Plan. During any period that the Employee fails to
perform the Employee's duties hereunder as a result of incapacity due to
physical or mental illness (a "Disability Period"), the Employee shall continue
to receive the compensation and benefits provided by Section 5.4 hereof until
the Employee's employment hereunder is terminated; provided, however, that the
amount of compensation and benefits received by the Employee during the
Disability Period shall be reduced by the aggregate amounts, if any, payable to
the Employee pursuant to Section 5.4 hereof or under the Social Security or
state disability insurance programs.
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11.4 Termination By the Company For Any Other Reason.
In the event that the Employee's employment hereunder is terminated by the
Company during the Employment Period for any reason other than as provided in
Sections 11.2 or 11.3 hereof, then the Company shall pay to the Employee, (i)
within thirty (30) days of the date of such termination, the Base Salary through
such date of termination, (ii) the amount of any Bonus payable under the Bonus
Plan through such date of termination, which Bonus, if any, shall be payable at
the time provided in the Bonus Plan, and (iii) in lieu of any further
compensation, benefits or other amounts for the balance of the Employment
Period, severance pay equal only to the Base Salary that Executive would have
otherwise received during the period beginning on such date of termination and
ending on the earlier of (i) the scheduled termination date of the Employment
Period under this Agreement or (ii) such time as Employee obtains other
employment which provides for compensation in an amount reasonably comparable to
the amount of the Base Salary (it being understood that the Company's obligation
under clause (iii) of this Section 11.4 shall be reduced by any amounts received
by the Executive by reason of any other employment, which severance pay shall be
paid commencing with such date of termination at the times and in the amounts
such Base Salary would have been paid.
12. Assignment.
This Agreement, as it relates to the employment of the
Employee, is a personal contract and the rights, interests and obligations of
the Employee hereunder may not be sold transferred, assigned, pledged or
hypothecated. Except as otherwise herein expressly provided, this Agreement
shall be binding upon and inure to the benefit of the Employee and his personal
representatives and shall inure to the benefit of and be binding upon the
Company and its successors and assigns, including without limitation, any
corporation or other entity into which the Company is merged or which acquires
all of the outstanding shares of the Company's capital stock, or all or
substantially all of the assets of the Company. This Agreement may be assigned
by the Company to, any existing or future subsidiary or affiliate of the
Company, any purchaser of all or substantially all of the Company's business or
assets, any successor to the Company or any assignee thereof (whether direct or
indirect, by purchase, merger, consolidation or otherwise).
13. 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, with postage prepaid, or by a nationally recognized overnight courier
service to the Employee's residence (as reflected in the Company's records or as
otherwise designated by the Employee on thirty (30) days' prior written notice
to the Company) or to the Company's principal executive office, attention:
President (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 or upon delivery to such overnight courier
service. Rejection or other refusal to accept, or the inability to deliver
because of changed address of which no notice was given as provided herein,
shall be deemed to be receipt of the notice, request, consent or approval sent.
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(a) if to the Employee:
Xxxxxxx Xxxxxx
000 Xxxxxxx Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxxxx 00000
With a copy to:
Xxxxxxxxx Xxxxxx Xxxxxxxx
Xxxxxx & Xxxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxx X. Xxxxxxx, Esq.
(b) if to the Company:
Diamond Triumph Auto Glass, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Attn.: President
With a copy to:
Green Equity Investors II, L.P.
x/x Xxxxxxx Xxxxx & Xxxxxxxx, X.X.
00000 Xxxxx Xxxxxx Blvd., (Suite 2000)
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxxx X. Annick
or to such other address as any such party shall designate by written notice to
the other party.
14. Non-waiver.
Neither any course of dealing nor any failure or neglect of
either party hereto in any instance to exercise any right, power or privilege
hereunder or under law shall constitute a waiver of any other right, power or
privilege or of the same right, power or privilege in any other instance. 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.
15. Entire Agreement.
This Agreement together with the Stock Purchase Agreement (as
defined in Exhibit A hereto), and the agreements entered into in connection
therewith contain the entire agreement of the parties relating to the subject
matter hereof and supersede all prior agreements and understandings between
them.
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16. Severability; Reasonableness of Agreement.
If any term, provision or covenant 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 by a court of competent
jurisdiction, the remainder of this Agreement and such term, provision or
covenant shall remain in full force and effect, and any such invalid,
unenforceable or void term, provision or covenant shall be deemed, without
further action on the part of the parties hereto, modified, amended and limited,
and the court shall have the power to modify, amend and limit any such term,
provision or covenant, to the extent necessary to render the same and the
remainder of this Agreement valid, enforceable and lawful. In this regard, the
Employee understands that the provisions of Sections 7, 8, 9, and 10 may limit
his ability to earn a livelihood in a business similar or related to the
business of the Company, but nevertheless agrees and acknowledges that (i) the
provisions of Sections 7, 8, 9 and 10 hereof are reasonable and necessary for
the protection of the Company, and do not impose a greater restraint than is
necessary to protect the goodwill or other business interests of the Company;
and (ii) such provisions contain reasonable limitations as to the time and the
scope of activity to be restrained. In consideration of the foregoing and in
light of the Employee's education, skills and abilities, the Employee agrees
that all defenses by the Employee to the strict enforcement of such provisions
are hereby waived by the Employee.
17. Headings.
The headings of the sections of this Agreement are provided
for convenience only and are intended to have no effect in construing or
interpreting this Agreement.
18. Governing Law.
This Agreement, including the validity, interpretation,
construction and performance of this Agreement, shall be governed by and
construed in accordance with the internal laws of the State of New York, without
regard to principles of conflicts of law. 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 service of process in any such action or proceeding by certified or
registered mailing of the summons and complaint therein directed to the Employee
or the Company at the address as provided in Section 13 hereof.
19. 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 the Employee and, on behalf of the Company, by its duly authorized
officer.
20. Costs and Expenses.
Each party shall pay all of its own costs and expenses,
including reasonable legal fees, in connection with the execution, delivery,
performance and compliance with this
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Agreement by such party. If an action or proceeding is commenced by a party to
enforce or interpret any provision of this Agreement, the non-prevailing party
shall promptly reimburse the prevailing party for the prevailing party's
reasonable costs and expenses of such action or proceeding, including reasonable
attorneys' fees.
21. Counterparts.
This Agreement may be executed in one or more counterparts,
all of which together shall be deemed one original.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as
of the date and year first written above.
DIAMOND TRIUMPH AUTO GLASS, INC.
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Co-Chairman & Co-Chief
Executive Officer
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
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