Exhibit 10.20
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This EMPLOYMENT AND NON-COMPETITION AGREEMENT (the "Agreement") is made
and entered into as of January 24, 2000, by and between Atrium Companies, Inc.,
a Delaware corporation (together with its successors and assigns permitted
hereunder, the "Company"), and Xxxxxx X. Xxxxx (the "Employee").
RECITALS:
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its subsidiaries
and stockholders to enter into this Agreement for purposes of the Company
employing the Employee on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the respective agreements and
covenants set forth herein and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. EMPLOYMENT PERIOD. Subject to Section 3, the Company hereby agrees to employ
the Employee, and the Employee hereby agrees to be employed by the Company in
accordance with the terms and provisions of this Agreement, for a period (the
"Employment Period") commencing on the date hereof and ending on the third
anniversary of such date. In the event the Employee continues to perform
services after the Employment Period, and pending agreement for extension of the
Employment Agreement, such services shall constitute employment for an
unspecified term, terminable at will, with or without cause or reason, with or
without advance notice, and with or without pay in lieu of advance notice.
2. TERMS OF EMPLOYMENT.
(a) Position and Duties.
(i) During the term of the Employee's employment, the Employee
shall serve as Senior Vice President of Operations of Atrium Companies, Inc.
and, in so doing, shall perform normal duties and responsibilities associated
with such position, subject to the general direction, approval and control of
the President of the Company and the Board.
(ii) During the term of the Employee's employment, and excluding
any periods of vacation and other leave to which the Employee is entitled, the
Employee agrees to devote substantially all his business time to the business
and affairs of the Company and to use the Employee's best efforts to perform
faithfully, effectively and efficiently his duties and responsibilities.
(iii) During the term of the Employee's employment it shall not be
a violation of this Agreement for the Employee to (1) serve on industry trade,
civic or charitable boards or committees, (2) deliver lectures or fulfill
speaking engagements, and (3) manage personal
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investments, so long as such activities do not interfere with the performance of
the Employee's duties and responsibilities as an employee of the Company.
(iv) Employee agrees to observe and comply with the Company's
rules and policies as adopted by the Company from time to time.
(v) Employee agrees not to disparage in any material respect
the Company or any of its products or practices, or any of its directors,
officers, agents, representatives, stockholders or affiliates, either orally
or in writing.
(b) COMPENSATION.
(i) BASE SALARY. During the term of the Employee's
employment, the Employee shall receive an annual base salary (the "Annual
Base Salary"), which shall be paid in accordance with the customary payroll
practices of the Company, in an amount equal to $160,000. The Board, in its
discretion, may at any time increase the amount of the Annual Base Salary to
such greater amount as it may deem appropriate, and the term "Annual Base
Salary," as used in this Agreement, shall refer to the Annual Base Salary as
it may be so increased. It is understood that the Company may, at any time,
in the discretion of the Board, increase, but not decrease, the amount of the
Annual Base Salary.
(ii) INCENTIVE BONUS. Employee shall receive the Incentive Bonus
reflected in Schedule A hereto. The Incentive Bonus shall be paid to the
Employee on or before March 30th of the calendar year immediately following the
year with respect to which the calculation of the Incentive Bonus is made;
provided, that in no event shall the Incentive Bonus be paid prior to the
completion of the applicable audited financial statements of the Company.
(iii) INCENTIVE SAVINGS, STOCK OPTION AND RETIREMENT PLANS. During
the term of the Employee's employment, the Employee shall be entitled to
participate in all incentive, savings, stock option and retirement plans,
practices, policies and programs applicable generally to other employees of the
Company (the "Investment Plans"), as amended from time to time.
(iv) WELFARE BENEFIT PLANS. During the term of the Employee's
employment, the Employee and/or the Employee's family, as the case may be,
shall be eligible for participation in and shall receive all benefits under
the welfare benefit plans, practices, policies and programs (the "Welfare
Plans") provided by the Company, including medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death
and travel accident insurance plans and programs, as amended from time to
time, to the extent applicable generally to other employees of the Company.
(v) PERQUISITES. During the term of the Employee's employment,
the Employee shall be entitled to receive, in addition to the benefits
described above, such perquisites and fringe benefits as shall appertain to
his position in accordance with any policies, practices and procedures
established by the Board, as amended from time to time.
(vi) EXPENSES. During the term of the Employee's employment, the
Employee shall be entitled to receive prompt reimbursement for all reasonable
employment expenses
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incurred by the Employee in accordance with the Company's policies, practices
and procedures, as amended from time to time.
(vii) AUTOMOBILE. The Company recognizes the Employee's need for
an automobile for business purposes. The Company shall provide the Employee with
a monthly automobile allowance of $550.
(viii) VACATION. During the term of the Employee's employment, the
Employee shall be entitled to four (4) weeks of paid vacation each calendar
year. Any vacation shall be taken at the reasonable and mutual convenience of
the Company and the Employee. Accrued vacation not taken in any calendar year
will not be carried forward or used in any subsequent calendar year, subject to
Section 4, and the Employee shall not be entitled to receive pay in lieu of
accrued but unused vacation in any calendar year. Vacation will be deemed to
accrue daily for purposes of the payments described in Section 4 hereof.
(ix) STOCK OPTIONS. Upon the effective date of this Agreement, the
Employee will be entitled to receive the stock options described on Schedule B
hereto.
(c) KEY-MAN INSURANCE. At any time during the Employment Period, the
Company shall have the right to insure the life of the Employee for the
Company's sole benefit, and to determine the amount of insurance and the type of
policy. The Employee shall cooperate with the Company in taking out such
insurance by submitting to physical examinations, by supplying all information
required by the insurance company, and by executing all necessary documents. The
Employee shall incur no financial obligation by executing any required document,
and shall have no interest in any such policy.
3. TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. The Employee's employment shall terminate
automatically upon the Employee's death during the Employment Period. If a
Disability (as defined below) of the Employee has occurred during the Employment
Period, the Company may give to the Employee written notice in accordance with
Section 11(b) of its intention to terminate the Employee's employment. In such
event, the Employee's employment with the Company shall terminate effective on
the 30th day after receipt of such notice by the Employee (the "Disability
Effective Date"), if, within the 30 days after such receipt, the Employee shall
not have returned to perform, with or without reasonable accommodation, the
essential functions of his position. For purposes of this Agreement, at any time
the Company or any of its affiliates sponsors a long-term disability plan for
the Company's employees, "Disability" shall mean disability as defined in such
long-term disability plan. The determination of whether the Employee has a
Disability shall be made by the person or persons required to render disability
determinations under the long-term disability plan. At any time the Company does
not sponsor a long-term disability plan for its employees, "Disability" shall
mean the Employee's inability to perform, with or without reasonable
accommodations, the central functions of his position hereunder for a period of
180 consecutive days due to mental or physical incapacity, as determined by a
physician mutually agreed to by the Employee and the Company.
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(b) CAUSE OR WITHOUT CAUSE. The Company may terminate the Employee's
employment during the Employment Period for Cause or without Cause. For purposes
of this Agreement, "Cause" shall mean (i) a breach by the Employee of the
Employee's obligations under Section 2(a) (other than as a result of physical or
mental incapacity) which constitutes a continued material nonperformance by the
Employee of his obligations and duties thereunder, as determined by the Board,
and which (other than in the case of a violation of Section 2(a)(v)) is not
remedied promptly after receipt of written notice from the Company specifying
such breach, (ii) commission by the Employee of an act of fraud, embezzlement,
misappropriation, willful misconduct or breach of fiduciary duty against the
Company; (iii) a material breach by the Employee of Sections 6, 7, 9 or 10, as
reasonably determined by a majority of the members of the Board or a committee
thereof after a hearing by the Board or a committee thereof following ten days'
notice to the Employee of such hearing; (iv) the Employee's conviction, plea of
no contest or NOLO CONTENDERE, or unadjudicated probation for any felony or any
crime involving moral turpitude; (v) the failure of the Employee to carry out,
or comply with, in any material respect any lawful directive of the Board
consistent with the terms of this Agreement, which is not remedied within 30
days after receipt of written notice from the Company specifying such failure;
or (vi) the Employee's unlawful use (including being under the influence) or
possession of illegal drugs on the Company's premises or while performing the
Employee's duties and responsibilities under this Agreement. The Company may
suspend the Employee's title and authority pending the hearing provided for in
clause (iii) above, and such suspension shall not constitute "Good Reason" as
defined below. For purposes of this Agreement, "without Cause" shall mean a
termination by the Company of the Employee's employment during the Employment
Period for any reason other than a termination based upon Cause, death,
Disability or upon a Change of Control, as defined below.
(c) GOOD REASON. The Employee's employment may be terminated during the
Employment Period by the Employee for Good Reason or without Good Reason;
provided, however, that the Employee agrees not to terminate his employment for
Good Reason unless (i) the Employee has given the Company at least 30 days'
prior written notice of his intent to terminate his employment for Good Reason,
which notice shall specify the facts and circumstances constituting Good Reason,
and (ii) the Company has not remedied such facts and circumstances constituting
Good Reason within such 30-day period. For purposes of this Agreement, "Good
Reason" shall mean:
(i) any significant reduction, approved by the Board without the
Employee's consent in the Employee's position, authority, duties or
responsibilities as contemplated in Section 2(a) or any other action by the
Company which results in a material diminution in such position, authority,
duties or responsibilities, excluding for this purpose an inadvertent action not
taken in bad faith and which is remedied by the Company promptly after receipt
of written notice thereof given by the Employee;
(ii) any termination or material reduction of a material benefit
under any Investment Plan or Welfare Plan in which the Employee participates
unless (A) there is substituted a comparable benefit that is economically
substantially equivalent to the terminated or reduced benefit prior to such
termination or reduction or (B) benefits under such Investment Plan or Welfare
Plan are terminated or reduced with respect to all similarly situated employees
previously granted benefits thereunder;
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(iii) any failure by the Company to comply with any of the
provisions of Section 2(b), other than an inadvertent failure not occurring in
bad faith and which is remedied by the Company promptly after receipt of written
notice thereof given by the Employee;
(iv) without limiting the generality of the foregoing, any
material breach by the Company or any of its subsidiaries or other affiliates
(as defined below) of (A) this Agreement or (B) any other agreement between
the Employee and the Company or any such subsidiary or other affiliate; or
(v) the Company's requirement that the Employee re-locate outside
a 100-mile radius of the Dallas, Texas metropolitan area.
As used in this Agreement, the term "affiliate" means, with respect to a
person, any other person controlling, controlled by or under common control with
the first person; the term "control," and correlative terms, means the power,
whether by contract, equity ownership or otherwise, to direct the policies or
management of a person; and the term "person" means an individual, partnership,
corporation, limited liability company, trust or unincorporated organization, or
a government or agency or political subdivision thereof.
(d) CHANGE OF CONTROL. If a Change of Control (as defined below) occurs
during the Employment Period and the Board determines in good faith that it is
in the Company's best interests to terminate the Employee's employment with the
Company within one year of such Change of Control the Company may terminate the
Employee's employment by giving the Employee written notice in accordance with
Section 11(b) of its intention to terminate the Employee's employment. Any such
termination by the Company as contemplated in this Section 3(d) is referred to
herein as a termination "upon a Change of Control."
As used in this Agreement, the term "Change of Control" means the first to
occur of: (i) any sale, lease, exchange or other transfer of all or
substantially all of the assets of the Company (including capital stock or
assets of operating subsidiaries) to any person or group of persons, (ii) a
majority of the Board consists of persons who are not nominated collectively by
Ardshiel, Inc. and its affiliates and GE Investment Private Placement Partners
II, a Limited Partnership or (iii) the acquisition by any person or group (other
than Ardshiel, Inc., GE Investment Private Placement Partners II, a Limited
Partnership and their respective affiliates) of the power to vote or direct the
voting of securities having more than 50% of the ordinary voting power for the
election of directors of the Company
(e) NOTICE OF TERMINATION. Any termination by the Company for Cause or
without Cause or upon a Change of Control, or by the Employee for Good Reason or
without Good Reason, shall be communicated by a Notice of Termination to the
other party hereto given in accordance with Section 11(b). For purposes of this
Agreement, the term "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall not be more than 15 days after the giving
of such notice if the Employee is giving such notice). The failure by the
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Employee or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause or a
termination upon a Change of Control shall not waive any right of the Employee
or the Company hereunder or preclude the Employee or the Company from asserting
such fact or circumstance in enforcing the Employee's or the Company's rights
hereunder.
(f) DATE OF TERMINATION. The term "Date of Termination" means (i) if the
Employee's employment is terminated by the Company for Cause or upon a Change of
Control, or by the Employee for Good Reason, the date of receipt of the Notice
of Termination or any later date specified therein pursuant to Section 3(e), as
the case may be, (ii) if the Employee's employment is terminated by the Employee
without Good Reason, 30 days from the date of receipt of the Notice of
Termination, (iii) if the Employee's employment is terminated by the Company
other than for Cause or upon a Change of Control, the date on which the Company
notifies the Employee of such termination and (iv) if the Employee's employment
is terminated by reason of death or Disability, the date of death of the
Employee or the Disability Effective Date under Section 3(a), as the case may
be.
4. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) For Cause; Without Good Reason. If, during the Employment Period, the
Company shall terminate the Employee's employment for Cause or the Employee
shall terminate his employment without Good Reason, the Employee shall forfeit
all rights to the Incentive Bonus otherwise due to him or to which he may be
entitled, all unexercised stock options to purchase shares of common stock of D
and W Holdings, Inc. (the "Parent") held by Employee shall lapse and expire, and
the Company shall have no further payment obligations to the Employee or his
legal representatives, other than for the payment of: (i) in a lump sum in cash
within ten (10) days after the Date of Termination the sum of the Employee's
Annual Base Salary through the Date of Termination to the extent not theretofore
paid, any compensation previously deferred by the Employee (together with any
accrued interest or earnings thereon) and any accrued vacation pay
(collectively, the "Accrued Obligations"); and (ii) any amount arising from the
Employee's participation in, or benefits under, any Investment Plans (the
"Accrued Investments"), which amounts shall be payable in accordance with the
terms and conditions of such Investment Plans.
(b) DEATH. If the Employee's employment is terminated by reason of the
Employee's death during the Employment Period, all unexercised stock options to
purchase shares of common stock of the Parent held by the Employee shall
immediately vest in his legal representatives and become exercisable and the
Company shall have no further payment obligations to the Employee or his legal
representatives, other than for payment of: (i) in a lump sum in cash within ten
(10) days after the Date of Termination the Accrued Obligations; (ii) the
Accrued Investments, which shall be payable in accordance with the terms and
conditions of the Investment Plans; and (iii) the Incentive Bonus prorated from
the first day of the Company's then current fiscal year to the Date of
Termination (the "Prorated Incentive Bonus"), payable following calculation of
the Incentive Bonus in accordance with Section 2(b)(ii) hereof.
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(c) DISABILITY. If the Employee's employment is terminated by reason of
the Employee's Disability during the Employment Period, all unexercised stock
options to purchase shares of common stock of the Parent held by the Employee
shall immediately vest and become exercisable and the Company shall have no
further payment obligations to the Employee or his legal representatives, other
than for payment of: (i) in a lump sum in cash within ten (10) days after the
Date of Termination the Accrued Obligations; (ii) the Accrued Investments, which
shall be payable in accordance with the terms and conditions of the Investment
Plans; and (iii) the Prorated Incentive Bonus, payable following calculation of
the Incentive Bonus in accordance with Section 2(b)(ii) hereof.
(d) WITHOUT CAUSE OR FOR GOOD REASON. If the Employee's employment is
terminated by the Company without Cause or by the Employee for Good Reason, all
unexercised stock options to purchase shares of common stock of the Parent held
by Employee shall immediately vest and become exercisable and the Company shall
have no further payment obligations to the Employee or his legal
representatives, other than for: (i) payment of, in a lump sum in cash within
ten (10) days after the Date of Termination, the Accrued Obligations; (ii)
payment of the Accrued Investments, which shall be payable in accordance with
the terms and conditions of the Investment Plans; (iii) payment of the Prorated
Incentive Bonus, payable following calculation of the Incentive Bonus in
accordance with Section 2(b)(ii) hereof; and (iv) payment for each month during
a period of twelve (12) months following the Date of Termination (the "Severance
Period") of one-twelfth of the Employee's Annual Base Salary, in accordance with
the customary payroll practices of the Company.
(e) CHANGE OF CONTROL. If the Employee's employment is terminated upon a
Change of Control as contemplated in Section 3(d), all unexercised stock options
to purchase shares of common stock of the Parent held by Employee shall
immediately vest and become exercisable and the Company shall have no further
payment obligations to the Employee or his legal representatives, other than for
(i) payment of, in a lump sum in cash within ten (10) days after the Date of
Termination, the Accrued Obligations; (ii) payment of the Accrued Investments,
which shall be payable in accordance with the terms and conditions of the
Investment Plans; (iii) payment of the Prorated Incentive Bonus; and (iv)
payment for each month during the Severance Period of one-twelfth of the
Employee's Annual Base Salary on the Date of Termination, in accordance with the
customary payroll practices of the Company.
5. FULL SETTLEMENT; MITIGATION. In no event shall the Employee be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Employee under any of the provisions of this Agreement
and such amounts shall not be reduced whether or not the Employee obtains other
employment. Neither the Employee nor the Company shall be liable to the other
party for any damages in addition to the amounts payable under Section 4 arising
out of the termination of the Employee's employment prior to the end of the
Employment Period; provided, however, that the Company shall be entitled to seek
damages from the Employee for any breach of Sections 6, 7, 9 or 10 by the
Employee or the Employee's criminal misconduct.
6. CONFIDENTIAL INFORMATION.
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(a) The Employee acknowledges that the Company and its affiliates have
trade, business and financial secrets and other confidential and proprietary
information (collectively, the "Confidential Information"). "Confidential
Information" includes, without limitation, sales materials, technical
information, processes and compilations of information, records, specifications
and information concerning customers or vendors, manuals relating to suppliers'
products, customer lists, information regarding methods of doing business, and
the identity of suppliers. "Confidential Information" shall not include
information that is generally known to other persons or entities who can obtain
economic value from its disclosure or use, or was or is available to the
Employee on a non-confidential basis from a source other than the Company.
Employee may disclose Confidential Information pursuant to a court order,
subpoena or other legal process, provided that, at least ten (10) days (or such
lesser period as is practicable given the terms of any order, subpoena or other
legal process) in advance of any legal disclosure, the Employee shall furnish
the Company with a copy of the judicial administrative order requiring that such
information be disclosed together with a written description of the information
to be disclosed (which description shall be in sufficient detail to allow the
Company to determine the nature and scope of the information proposed to be
disclosed), and Employee covenants and agrees to cooperate with the Company to
deliver the minimum amount of information necessary to comply with such order.
(b) During and for a period of five (5) years following the Employee's
employment by the Company (the "Confidentiality Term"), the Employee shall hold
in confidence and not directly or indirectly disclose or use or copy or make
lists of any Confidential Information or proprietary data of the Company or its
affiliates except to the extent authorized in writing by the Board or required
by any court or administrative agency, other than to an employee of the Company
or its affiliates or a person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by the Employee of his duties as
an employee of the Company.
(c) The Employee further agrees during the Confidentiality Term not to use
any Confidential Information for the benefit of any person or entity other than
the Company or its affiliates.
(d) As used in this Section 6 "Company" shall include the Parent and any
of its direct or indirect subsidiaries.
7. RESPONSIBILITIES UPON TERMINATION. Upon the termination of his employment by
the Company for whatever reason and irrespective of whether or not such
termination is voluntary on his part:
(a) The Employee shall advise the Company of the identity of his new
employer within ten (10) days after accepting new employment and further agrees
to keep the Company so advised of any change in employment during the term of
Non-Competition set forth in Section 9 hereof;
(b) The Employee shall deliver to the Company any and all records, forms,
contracts, memoranda, work papers, customer data and any other documents which
have come into his possession by reason of his employment with the Company
(including the Parent and its direct
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and indirect subsidiaries), irrespective of whether or not any of said documents
were prepared for him, and he shall not retain memoranda in respect of or copies
of any of said documents; and
(c) The Employee shall participate in an exit interview with the Company.
8. SUCCESSORS. The Company may assign its rights and obligations under this
Agreement to any successor to all or substantially all the assets of the
Company, by merger or otherwise, subject, however, to the Employee's right to
terminate this Agreement for Good Reason as provided in Section 3(c), and may
assign or encumber this Agreement and its rights hereunder as security for
indebtedness of the Company and its affiliates. All representations, warranties,
covenants, terms, conditions and provisions of this Agreement shall be binding
upon and inure to the benefit of, and be enforceable by the respective heirs,
legal representatives, successors and permitted assigns of the Company and
Employee. Neither this Agreement nor any rights, interests or obligations
hereunder may be assigned by the Employee without the prior written consent of
the Company.
9. NON-COMPETITION.
(a) The term of Non-Competition (herein so called) shall be for a term
beginning on the effective date hereof and continuing until (i) the first
anniversary of the Date of Termination if the Employee's employment is
terminated by the Company for Cause or due to Disability or by the Employee
without Good Reason, or (ii) the last day of the Severance Period if the
Employee's employment is terminated by the Company without Cause (and not due to
Disability) or upon a Change of Control or by the Employee for Good Reason.
(b) During the term of Non-Competition, the Employee shall not (other than
for the benefit of the Company or its affiliates pursuant to this Agreement),
directly or indirectly, render services to, assist, participate in the affairs
of, or otherwise be connected with, any person or enterprise (other than the
Company), which person or enterprise is engaged in, or is planning to engage in
and the Employee has knowledge of such plans, and shall not personally engage
in, any business that is in any respect competitive with the business of the
Company, with respect to any products of the Company that were within the
Employee's responsibility at any time within the twelve-month period immediately
prior to the termination of the Employee's employment with the Company, in any
capacity which would (i) utilize the Employee's services with respect to any
such business (a) located within any state of the United States, or any
substantially comparable political subdivision of any other country, wherein the
Company sold or actively attempted to sell, such products within the
twelve-month period immediately prior to the termination of the Employee's
employment with the Company or (b) which sells or markets products similar to
products sold or marketed by the Company in any such state or comparable
subdivision; or (ii) utilize the Employee's services in selling any products
similar to such products of the Company to any person or entity to which the
Company sold or actively attempted to sell such products within the twelve-month
period immediately prior to the termination of the Employee's employment with
the Company (a "Competing Business"). Notwithstanding the foregoing, the Company
agrees that the Employee may own less than five percent of the outstanding
voting securities of any publicly traded company that is a Competing Business so
long as the Employee does not otherwise participate in such Competing Business
in any way prohibited by the preceding clause.
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(c) During the term of Non-Competition, Employee will not, and will not
permit any of his affiliates to, directly or indirectly, recruit or otherwise
solicit or induce any employee, customer, subscriber or supplier of the Company
to terminate its employment or arrangement with the Company, otherwise change
its relationship with the Company or establish any relationship with the
Employee or any of his affiliates for any business purpose deemed competitive
with the business of the Company.
(d) The Employee acknowledges that the geographic boundaries, scope of
prohibited activities, and time duration of the preceding paragraphs are
reasonable in nature and are no broader than are necessary to maintain the
goodwill of the Company and its affiliates and the confidentiality of their
Confidential Information, and to protect the other legitimate business interests
of the Company and its affiliates.
(e) As used in this Section 9, "Company" shall include the Parent and any
of its direct or indirect subsidiaries.
10. INVENTIONS; ASSIGNMENT. All rights to discoveries, inventions, improvements
and innovations, including all data and records pertaining thereto, related to
those areas of the Company's business that the Employee had management
responsibility for or otherwise had obtained Confidential Information for,
whether or not patentable, copyrightable, registrable as a trademark, or reduced
to writing, that the Employee may discover, invent or originate during the
Employment Period, and for a period of twelve (12) months thereafter, either
alone or with others and whether or not during working hours or by the use of
the facilities of the Company (the "Inventions"), shall be the exclusive
property of the Company. The Employee shall promptly disclose all Inventions to
the Company, shall execute at the request of the Company any assignments or
other documents the Company may deem necessary to protect or perfect its rights
therein, and shall assist the Company, at the Company's expense, in obtaining,
defending and enforcing the Company's rights therein. The Employee hereby
appoints the Company as his attorney-in-fact to execute on his behalf any
assignments or other documents deemed necessary by the Company to protect or
perfect its rights to any Inventions.
11. MISCELLANEOUS.
(a) CONSTRUCTION. This Agreement shall be deemed drafted equally by both
the parties. Its language shall be construed as a whole and according to its
fair meaning. Any presumption or principle that the language is to be construed
against any party shall not apply. The headings in this Agreement are only for
convenience and are not intended to affect construction or interpretation. Any
references to paragraphs, subparagraphs, sections or subsections are to those
parts of this Agreement, unless the context clearly indicates to the contrary.
Also, unless the context clearly indicates to the contrary, (a) the plural
includes the singular and the singular includes the plural; (b) "and" and "or"
are each used both conjunctively and disjunctively; (c) "any," "all," "each," or
"every" means "any and all," and "each and every"; (d) "includes" and
"including" are each "without limitation"; (e) "herein," "hereof," "hereunder"
and other similar compounds of the word "here" refer to the entire Agreement and
not to any particular paragraph, subparagraph, section or subsection; and (f)
all pronouns and any
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variations thereof shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the entities or persons referred to may
require.
(b) NOTICES. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
IF TO THE EMPLOYEE: Xxxxxx X. Xxxxx
00 Xxxxxx'x Xxx
Xxxxxxx, XX 00000
IF TO THE COMPANY: Atrium Companies, Inc.
0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000X
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxx
Fax: (000) 000-0000
and
Atrium Companies, Inc.
c/o Ardshiel, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxx X. Xxxxx
Xxxxx Xxxxxxxxxx
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) ENFORCEMENT. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effective during the term
of this Agreement, such provision shall be fully severable. This Agreement shall
be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a portion of this Agreement; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal,
11
invalid or unenforceable provision as may be possible and be legal, valid and
enforceable. If any court determines that any portion of this Agreement is
invalid or unenforceable, the remainder of this Agreement shall not thereby be
affected and shall be given full effect without regard to the invalid
provisions. If any court construes any of the provisions of this Agreement, or
any part thereof, to be unreasonable because of the duration or scope of such
provision, such court shall have the power to reduce the duration or scope of
such provision and to enforce such provision as so reduced.
(d) WITHHOLDING. The Company shall be entitled to withhold from any
amounts payable under this Agreement any federal, state, local or foreign
withholding or other taxes or charges which it is from time to time required to
withhold. The Company shall be entitled to rely on an opinion of counsel if any
questions as to the amount or requirement of such withholding shall arise.
(e) NO WAIVER. No waiver by either party at any time of any breach by the
other party of, or compliance with, any condition or provision of this Agreement
to be performed by the other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at any time.
(f) EQUITABLE RELIEF. The Employee acknowledges that money damages would
be both incalculable and an insufficient remedy for a breach of Section 6, 7, 9
or 10 by the Employee and that any such breach would cause the Company
irreparable harm. Accordingly, the Company, in addition to any other remedies at
law or in equity it may have, shall be entitled, without the requirement of
posting of bond or other security, to equitable relief, including injunctive
relief and specific performance, in connection with a breach of Section 6, 7, 9
or 10 by the Employee.
(g) COMPLETE AGREEMENT. The provisions of this Agreement constitute the
entire and complete understanding and agreement between the parties with respect
to the subject matter hereof, and supersedes all prior and contemporaneous oral
and written agreements, representations and understandings between the Employee
and the Company, or its affiliates and subsidiaries with respect to the subject
matter hereof, which are hereby terminated. Other than expressly set forth
herein, the Employee and the Company acknowledge and represent that there are no
other promises, terms, conditions or representations (oral or written) regarding
any matter relevant hereto. This Agreement may be executed in two or more
counterparts.
(h) MEDIATION; ARBITRATION. i) The Company and the Employee shall mediate
any claim or controversy arising out of or relating to this Agreement or any
breach thereof if either of them requests mediation and gives written notice to
the other (the "Mediation Notice"). Any notice given pursuant to the preceding
sentence shall include a brief statement of the claim or controversy. If the
Company and the Employee do not resolve the claim or controversy within five (5)
days after the date of the Mediation Notice, the Company and the Employee shall
then use reasonable efforts to agree upon an independent mediator. If the
Company and the Employee do not agree upon an independent mediator within ten
(10) days after the date of the Mediation Notice, either party may request that
JAMS/Endispute ("JAMS"), or a similar mediation service of a similar national
scope if JAMS no longer then exists, appoint an independent mediator. The
Company and the Employee shall share the costs of mediation
12
equally and shall pay such costs in advance upon the request of the mediator or
any party. Within ten (10) days after selection of the mediator, the mediator
shall set the mediation. The pendency of a mediation, or the failure to initiate
a mediation, shall not delay or prevent an action to enforce this Agreement
pursuant to Section 11(h)(ii) below. If the Company and the Employee do not
resolve the dispute within thirty (30) days after the date of the Mediation
Notice, the dispute shall be decided by arbitration as set forth below.
(i) Any claim or controversy arising out of or relating to this
Agreement or any breach thereof shall be settled by arbitration if such claim or
controversy is not settled pursuant to mediation as set forth above. The venue
for any such arbitration shall be Dallas, Texas or such other location as the
parties may mutually agree. Except as expressly set forth herein, all
arbitration proceedings under this Section 11(h)(ii) shall be undertaken in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA") then in force. Only individuals who are (i) lawyers
engaged full-time in the practice of law and (ii) on the AAA register of
arbitrators shall be selected as an arbitrator. There shall be one arbitrator
who shall be chosen in accordance with the rules of the AAA. Within twenty (20)
days of the conclusion of the arbitration hearing, the arbitrator shall prepare
written findings of fact and conclusions of law. Judgment on the written award
may be entered and enforced in any court of competent jurisdiction. It is
mutually agreed that the written decision of the arbitrator shall be valid,
binding, final and non-appealable; provided however, that the parties hereto
agree that the arbitrator shall not be empowered to award punitive damages
against any party to such arbitration. Each party shall divide the full fees and
expenses equally. Each party shall bear its own costs of arbitration.
(i) SURVIVAL. Sections 4, 5, 6, 7, 8, 9, 10 and 11 of this Agreement shall
survive the termination of this Agreement.
(j) CHOICE OF LAW. This Agreement and the rights and obligations hereunder
shall be governed by and construed in accordance with the laws of the State of
Texas without reference to principles of conflicts of law of Texas or any other
jurisdiction, and, where applicable, the laws of the United States.
(k) AMENDMENT. This Agreement may not be amended or modified at any time
except by a written instrument approved by the Board and executed by the Company
and the Employee.
(l) EMPLOYEE ACKNOWLEDGMENT. Employee acknowledges that he has read and
understands this Agreement, is fully aware of its legal effect, has not acted in
reliance upon any representations or promises made by the Company other than
those contained in writing herein, and has entered into this Agreement freely
based on his own judgment.
13
IN WITNESS WHEREOF, the Employee has hereunto set the Employee's hand and,
pursuant to the authorization from the Board, the Company has caused this
Agreement to be executed in its name on its behalf, on this 24th day of January,
2000, to be effective as of the day and year first above written.
EMPLOYEE
---------------------------------
Xxxxxx X. Xxxxx
ATRIUM COMPANIES, INC.
---------------------------------
Xxxx X. Xxxx
President
14
SCHEDULE A
Employee shall be entitled to a target bonus in the amount of $100,000 per
annum (the "Incentive Bonus").
75% of the Employee's Incentive Bonus ("EBITDA Bonus") shall be payable
based upon achievement of the following targets:
(i) If Atrium achieves 80% of its budgeted EBITDA, the Employee shall
receive 50% of the EBITDA Bonus.
(ii) If Atrium achieves 90% of its budgeted EBITDA, the Employee shall
receive 75% of the EBITDA Bonus.
(iii) If Atrium achieves 100% of its budgeted EBITDA, the Employee shall
receive 100% of the EBITDA Bonus.
(iv) If Atrium achieves 110% of its budgeted EBITDA, the Employee shall
receive 125% of the EBITDA Bonus.
(v) The EBITDA Bonus will be paid on a sliding scale on a pro rated
basis. For example, if 95% of budgeted EBITDA is achieved, the
Employee is entitled to 87.5% of the EBITDA Bonus. No EBITDA Bonus
will be paid if Atrium achieves less than 80% of the budgeted
EBITDA and in no event will the Company pay in excess of 125% of
the EBITDA Bonus.
(vi) For purposes of the EBITDA Bonus, EBITDA shall be defined as
earnings from operations before interest, taxes, depreciation,
amortization and extraordinary gains or losses of Atrium and all of
its subsidiaries on a consolidated basis. Budgeted EBITDA shall be
such amount as is set by the Board annually as adjusted from time
to time to reflect acquisitions by Atrium or its subsidiaries.
25% of the Employee's Incentive Bonus shall be payable based upon
achievement of management objectives to be set each fiscal year by the senior
officers of the Company and approved by the Board.
15
SCHEDULE B
Stock Options:
Effective as of the date of this Agreement the Employee shall be granted
options to purchase 200,000 shares of common stock of the Parent pursuant to the
D and W Holdings, Inc. 1998 Stock Option Plan (the "Plan"). Such options shall
provide the following:
EXERCISE PRICE: $1.50 per share subject to adjustment as set forth in the Plan.
VESTING: Annually in equal installments over five years from the date of grant,
subject to continued employment as set forth in the Plan, in accordance with the
following schedule:
Vesting Schedule
--------------------------------------------
Anniversary of
GRANT DATE VESTED SHARES
---------- -------------
1st 40,000 shares
2nd 40,000 shares
3rd 40,000 shares
4th 40,000 shares
5th 40,000 shares
Total 200,000 shares
