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EXHIBIT 10.13
EMPLOYMENT
AGREEMENT dated as of
January 22, 1996, between
ADVANCED ACCESSORY SYSTEMS,
LLC, a Delaware limited
liability company (the
"Company"), and XXXXXXX X.
XXXXXX (the "Executive").
The Company desires to enter into this Agreement in order to assure itself
of the continued service of the Executive following the date hereof, and the
Executive desires to accept employment with the Company, upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties agree as follows:
Section 1. Employment. The Company hereby employs the Executive, and
the Executive hereby accepts employment by the Company, upon the terms and
conditions hereinafter set forth.
Section 2. Term. The employment of the Executive hereunder shall be
for a period commencing on the date hereof (the "Commencement Date") and
ending on December 31, 2000 (the "Initial Term") or such earlier date upon
which the employment of the Executive shall terminate in accordance with the
provisions hereof. Unless terminated earlier in accordance with the provisions
hereof, at the end of the Initial Term and at the end of each term thereafter,
the employment of the Executive hereunder shall automatically renew for
successive two-year periods unless the Company shall give the Executive written
notice of its desire not to renew the term or the Initial Term no later than 30
days prior to the termination of the then current term. The period commencing
on the Commencement Date and ending on the date of termination of the
Executive's employment hereunder shall be called the "Term of Employment" for
the Executive, and the date on which the Executive's employment hereunder shall
terminate shall be called the "Termination Date".
Section 3. Duties. During the Term of Employment, the Executive shall
be employed as the Chief Financial Officer of the Company and shall perform such
duties as are consistent therewith as the Board of Managers of the Company (the
"Board") or its designee shall designate. The Executive shall use his best
efforts to perform well and faithfully the foregoing duties and
responsibilities. The Executive shall not be required by the Company to
relocated his principal business office or his principal residence outside the
Southeast Michigan area.
Section 4. Time to be Devoted to Employment. During the Term of
Employment, the Executive shall devote all of his business time, attention and
energies to the business of the Company and its subsidiaries and the Parent
(except for vacations to which he is entitled pursuant to Section 6(b)) and
periods of illness or incapacity). During the Term of Employment, the Executive
shall not engage in any business activity
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which, in the reasonable judgment of the Board, conflicts with the duties of the
Executive hereunder, whether or not such activity is pursued for gain, profit or
other pecuniary advantage.
Section 5. Compensation.
(a) The Company (or at the Company's option, any subsidiary or affiliate
thereof) shall pay to the Executive an annual base salary (the "Base Salary")
during the Term of Employment of not less than $165,000, payable in such
installments (but not less often than monthly) as is generally the policy of the
Company with respect to its executive officers, which Base Salary shall be
subject to such increases as the Board, in its sole discretion, may from time to
time determine. The Executive's performance shall be reviewed at least annually
by the Board.
(b) During the Term of Employment, the Executive shall be eligible to
participate in incentive compensation or bonus plans that are generally made
available to the Company's senior executives which will generally provide the
Executive the opportunity to receive an annual cash bonus in the range of 30-50%
of the Base Salary subject to the achievement by the Company of performance
goals established by the Board in its sole discretion.
Section 6. Business Expenses; Benefits.
(a) The Company (or, at the Company's option, any subsidiary or affiliate
thereof) shall reimburse the Executive, in accordance with the practice from
time to time for executive officers of the Company, for all reasonable and
necessary expenses and other disbursements incurred by the Executive for or on
behalf of the Company in the performance of the Executive's duties hereunder.
The Executive shall provide such appropriate documentation of expenses and
disbursements as may from time to time be required by the Company.
(b) During the Term of Employment, the Executive shall be entitled to four
weeks vacation per year.
(c) During the Term of Employment, the Company shall continue to provide
the Executive with the option to either (i) elect to receive the group health,
life and disability insurance benefits that are presently provided by the
Company to the executives of the Company, or (ii) elect to receive the cash
equivalent of the group health, life and disability insurance benefits that are
presently provided by the Company to the senior executives of the Company.
(d) During the Term of Employment, the Executive shall be entitled to
reasonable reimbursement on a per mile basis for expenses incurred by the
Executive in connection with his use of an automobile pursuant to the
performance of his duties hereunder.
(e) It is further acknowledged that the Company shall be obligated to pay
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on behalf of the Executive during the Term of Employment the annual premiums
with respect to a term life insurance policy (the "Insurance Policy") on the
life of the Executive providing for a payment of 300% of the Executive's current
Base Salary to the beneficiaries of such policy and appropriate disability
insurance (the "Disability Policy") for the Executive providing for a payment of
60-70% of the Executive's current Base Salary to the beneficiaries of such
policy; provided, however, that the Company shall not be required to spend more
than $6,000 in the aggregate for the annual premiums with respect to the
Insurance Policy and the Disability Policy.
Section 7. Involuntary Termination.
(a) If the Executive is incapacitated or disabled (such condition being
hereinafter referred to as a "Disability") in a manner that would qualify the
Executive for benefits under the Disability Policy, the Term of Employment and
the employment of the Executive under this Agreement shall cease (such
termination, as well as a termination under Section 7(b), being hereinafter
referred to as an "Involuntary Termination") and the Executive shall be entitled
to receive the benefits payable under the Disability Policy.
(b) If the Executive dies during the Term of Employment, the Term of
Employment and the Executive's employment hereunder shall cease as of the date
of the Executive's death and the beneficiaries designated by the Executive under
the Insurance Policy shall be entitled to receive the proceeds of the Insurance
Policy.
Section 8. Termination For Cause. The Company may terminate the Term of
Employment and the employment of the Executive hereunder at any time for Cause
(as hereinafter defined) (such termination being referred to herein as a
"Termination For Cause") by giving the Executive written notice of such
termination, effective immediately upon the giving of such notice to the
Executive. As used in this Agreement, "Cause" means the Executive's (a)
commission of an act (i) constituting a felony or (ii) involving fraud, theft or
dishonesty which is not a felony and which materially adversely affects the
Company or could reasonably be expected to materially adversely affect the
Company, (b) repeated failure to be reasonably available to perform his duties,
which, if curable, shall not have been cured within 10 business days of written
notice thereof from the Company, (c) repeated failure to follow the lawful
directions of the Board, which, if curable, shall not have been cured within 10
business days of written notice thereof from the Company, (d) material breach of
any agreement with the Company (including the noncompete provisions) which, if
curable, shall not have been cured within 10 business days of written notice
thereof from the Company or (e) resignation.
Section 9. Termination Without Cause. The Company may terminate the Term of
Employment and the employment of the Executive hereunder without Cause (such
termination being hereinafter referred to as a "Termination Without Cause") by
giving the Executive written notice of such termination, which notice shall be
effective on the date specified therein but not earlier than the date on which
such notice is given.
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Section 10. Effect of Termination.
(a) Upon the termination of the Term of Employment and the Executive's
employment hereunder due to an Involuntary Termination or Termination for Cause,
neither the Executive nor his beneficiary or estate shall have any further
rights or claims against the Company under this Agreement, except to receive (i)
the unpaid portion, if any, of the Base Salary provided for in Section 5(a),
computed on a pro rata basis to the Termination Date (based on the actual number
of days elapsed over the actual number of days of the year in which such
termination occurs), (ii) any unpaid accrued benefits of the Executive, and
(iii) reimbursement for any expenses for which the Executive shall not have been
reimbursed as provided in Section 6(a).
(b) Upon the termination of the Executive's employment hereunder due to an
Termination Without Cause, neither the Executive nor his beneficiary or estate
shall have any further rights or claims against the Company under this Agreement
except the right to receive (i) the amounts set forth in Section 10(a), (ii) the
prorated portion of any bonus earned by the Executive in such year under any
Company incentive compensation plan in which the Executive participates, (iii)
the Base Salary through the date which is 12 months from the Termination Date,
payable in such installments over the applicable period as the base salary is
generally paid to the Executive and (iv) the costs to the Executive under COBRA
to receive insurance coverage from the Company during the period commencing on
the Termination Date through the date which is the earlier to occur of (1) the
first anniversary of the Termination Date and (2) the day prior to the date on
which the Executive shall be included in any insurance program provided by any
other employer. The Executive shall have no duty to mitigate the Company's
obligations under this Section 10(b).
Section 11. Insurance. The Company may, for its own benefit, in its sole
discretion, maintain "key-man" life and disability insurance policies covering
the Executive. The Executive will cooperate with the Company and provide such
information or other assistance as the Company may reasonably request in
connection with the Company's obtaining and maintaining such policies.
Section 12. Disclosure of Information. The Executive shall not, at any time
during the Term of Employment or thereafter, disclose to any person, firm,
corporation or other business entity, except as required by law or pursuant to
the ordinary course of conduct of the Executive's responsibilities under this
Agreement, any non-public information (including, without limitation, non-public
information obtained prior to the date hereof) concerning the business, clients
or affairs of the Company or any subsidiary or affiliate thereof for any reason
or purpose whatsoever, nor shall the Executive make use of any of such
non-public information for his own purpose or for the benefit of any person,
firm, corporation or other business entity except the Company or any subsidiary
or affiliate thereof. Upon the termination of the Term of Employment, the
executive shall return to the Company all property of the Company or any
subsidiary or affiliate thereof then in the possession of the Executive and all
books, records, computer tapes or discs
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and all other material containing non-public information concerning the
business, clients or affairs of the Company or any subsidiary or affiliate
thereof.
Section 13. Right to Inventions. The Executive shall promptly
disclose, grant and assign to the Company for its sole use and benefit any and
all marks, designs, logos, inventions, improvements, technical information and
suggestions relating in any way to the business conducted by the Company,
which he may develop or which may be acquired by the Executive during the Term
of Employment (whether or not during usual working hours), together with all
trademarks, patent applications, letters patent, copyrights and reissues
thereof that may at any time be granted for or upon any such xxxx, design,
logo, invention, improvement or technical information. In connection therewith:
(i) the Executive shall without charge, but at the expense
of the Company, promptly at all times hereafter execute and
deliver such applications, assignments, descriptions and other
instruments as may be necessary or proper in the opinion of the
Company to vest title to any such marks, designs, logos,
inventions, improvements, technical information, trademarks,
patent applications, patents, copyrights or reissues thereof in
the Company and to enable it to obtain and maintain the entire
right and title thereto throughout the world;
(ii) the Executive shall render to the Company at its
expense (including a reasonable payment for the time involved in
case he is not then in its employ based on his last per diem
earnings) all such assistance as it may require in the
prosecution of applications for said trademarks, patents,
copyrights or reissues thereof, in the prosecution or defense of
interferences which may be declared involving any said
trademarks, applications, patents or copyrights and in any
litigation in which the Company may be involved relating to any
such trademarks, patents, inventions, improvements or technical
information; and
(iii) for the avoidance of doubt, the foregoing provisions
shall be deemed to include an assignment of future copyright in
accordance with Section 37 of the Copyright Act of 1986 and any
amendment or re-enactment thereof.
Section 14. Restrictive Covenant.
(a) The Executive acknowledges and recognizes that the
Business (as defined in the Purchase Agreement) has been conducted, and
substantial sales of its products have been made, throughout the United
States and Europe, and the Executive further acknowledges and recognizes the
highly competitive nature of the industry in which the Business is involved.
Accordingly, in consideration of the premises contained herein, the
consideration to be received hereunder, stock options to be granted to the
Executive and in consideration of and as an inducement to the Company to
consummate the transactions contemplated by the Purchase Agreement, the
Executive shall not during the Non-Competition Period (as defined below) (i)
directly or indirectly engage, whether
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or not such engagement shall be as a partner, stockholder, affiliate or other
participant, in any Competitive Business, or represent in any way any
Competitive Business, whether or not such engagement or representation shall be
for profit, (ii) interfere with, disrupt or attempt to disrupt the relationship,
contractual or otherwise, between the Company and any other person or entity,
including, without limitation, any customer, supplier or employee of the
Company, (iii) induce any employee of the Company or the Business to terminate
his employment with the Company or the Business or to engage in any Competitive
Business in any manner described in the foregoing clause (i) (as well as an
officer or director of any Competitive Business), or (iv) affirmatively assist
or induce any other person or entity to engage in any Competitive Business in
any manner described in the foregoing clause (i) (as well as an officer or
director of any Competitive Business). Anything contained in this Section 14 to
the contrary notwithstanding, an investment by the Executive in any entity in
which the Executive and his affiliates exercise no operational or strategic
control and which constitutes less than 2% of the capital of such entity shall
not constitute a breach of this Section 14.
(b) As used herein, "Non-Competition Period" shall mean the period
commencing on the date hereof and terminating on the fifth anniversary of the
Termination Date; provided, however, that if the Term of Employment shall have
been terminated pursuant to Section 9, then "Non-Competition Period" shall mean
the period commencing on the date hereof and terminating on the later of (i) the
second anniversary of the Termination Date and (ii) the end of the period
following the Termination Date which is equal to the period of the Term of
Employment (assuming that the Term of Employment shall not exceed five years for
purposes of this clause (ii)); and "Competitive Business" shall mean any
business in any State of the United States or anywhere outside the United States
engaged in designing, engineering, manufacturing, selling or distributing (x)
systems or components thereof (such as roof racks, deck racks and other systems)
intended to facilitate the carriage or storage of cargo, luggage, bicycles,
skis, snowboards, sailboards, sailboats, and other items or property on a
vehicle or (y) drip rails for the Pontiac F-car or Chrysler XJ vehicle.
(c) The Executive understands that the foregoing restrictions may
limit his ability to earn a livelihood in a business similar to the business of
the Company or any subsidiary or affiliate thereof, but he nevertheless
believes that he has received and will receive sufficient consideration and
other benefits as an employee of the Company and as otherwise provided
hereunder and pursuant to other agreements between the Company and the
Executive to justify clearly such restrictions which, in any event (given his
education, skills and ability), the Executive does not believe would prevent
him from earning a living.
Section 15. Enforcement; Severability; Etc. It is the desire and intent of
the parties that the provisions of this Agreement shall be enforced to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular
provision of this Agreement shall be adjudicated to be invalid or unenforceable,
such provision shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such
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deletion to apply only with respect to the operation of such provision in the
particular jurisdiction in which such adjudication is made.
Section 16. Remedies. The Executive acknowledges and understands that the
provisions of this Agreement are of a special and unique nature, the loss of
which cannot be adequately compensated for in damages by an action at law, and
that the breach or threatened breach of the provisions of this Agreement would
cause the Company irreparable harm. In the event of a breach or threatened
breach by the Executive of the provisions of this Agreement, the Company shall
be entitled to an injunction restraining him from such breach. Nothing contained
in this Agreement shall be construed as prohibiting the Company from or limiting
the Company in pursuing any other remedies available for any breach or
threatened breach of this Agreement. Section 17. Notices. All notices, claims,
certificates, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given and delivered if personally
delivered or if sent by nationally-recognized overnight courier, by telecopy, or
by registered or certified mail, return receipt requested and postage prepaid,
addressed as follows:
if to the Company, to:
Advanced Accessory Systems, LLC
0000 00xx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: President
Telecopier: (000) 000-0000;
with copies to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000;
if to the Executive, to:
Xxxxxxx X. Xxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxx Xxxxx, XX 00000
or to such other address as the party to whom notice is to be given may have
furnished to the other party or parties in writing in accordance herewith. Any
such notice or communication shall be deemed to have been received (a) in the
case of personal delivery, on the date of such delivery, (b) in the case of
nationally-recognized overnight courier, on the next business day after the date
when sent, (c) in the case of telecopy transmission, when received, and (d) in
the case of mailing, on the third business day
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following that on which the piece of mail containing such communication is
posted.
Section 18. Binding Agreement; Benefit. Subject to Section 23, the
provisions of this Agreement will be binding upon, and will inure to the benefit
of, the respective heirs, legal representatives, successors and assigns of the
parties.
Section 19. Governing Law. This Agreement will be governed by, and
construed and enforced in accordance with, the laws of the State of Michigan
(without giving effect to principles of conflicts of laws).
Section 20. Waiver of Breach. The waiver by either party of a breach of
any provision of this Agreement must be in writing and shall not operate or be
construed as a waiver of any other breach.
Section 21. Entire Agreement; Amendments. This Agreement contains the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements or understandings between the parties with
respect thereto. This Agreement may be amended only by an agreement in writing
signed by the parties.
Section 22. Headings. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 23. Assignment. This Agreement is personal in its nature and the
parties shall not, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder; provided, however, that the
Company may assign this Agreement to any of its subsidiaries and affiliates.
Section 24. Counterparts. This Agreement may be executed in
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
Section 25. Gender. Any reference to the masculine gender shall be
deemed to include the feminine and neuter genders unless the context otherwise
requires.
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IN WITNESS WHEREOF, The parties hereto have executed and delivered this
Employment Agreement as of the date first written above.
ADVANCED ACCESSORY SYSTEMS, LLC
By:_____________________________
Name:
Title:
________________________________
XXXXXXX X. XXXXXX
