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EXHIBIT 10.32
EMPLOYMENT AGREEMENT
AGREEMENT made as of April 10, 1997, by and between ANGELES METAL TRIM
CO., a California corporation (the "Corporation"), having an address at 0000
Xxxx Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 and XXXXXX X. XXXXXX
("Executive"), residing at 000 Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Corporation wishes to employ Executive, and Executive is
willing to accept such employment, on the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements set forth herein, the parties hereto agree as follows:
1. Employment and Term. Subject to the terms and conditions of
this Agreement, the Corporation agrees to employ Executive, and Executive
hereby accepts employment by the Corporation, for a period of one year (the
"Term") commencing on the date first written above; provided, however, that
this Agreement and the Term of Executive's employment with the Corporation
hereunder shall automatically be extended for one year commencing on the first
anniversary of this Agreement and on each successive one year anniversary after
the first anniversary unless Executive or the Corporation shall have given
written notice to the other at least sixty (60) days prior to such anniversary
that the Term shall expire at the end of the current Term or extended one year
Term, as applicable. For purposes of this Agreement, the "Term" of this
Agreement shall mean the initial one-year term of this Agreement and
(cumulatively) any and all one-year extension(s) of the initial one-year term
of this Agreement. In the event of the exercise of any of the one-year
extensions of this Agreement, Executive's salary and other compensation for the
extension year shall be negotiated in good faith; and in the event that
agreement is not reached by the beginning of the one-year extension period,
then all of the terms of this Agreement in effect immediately prior to the
commencement of the one-year extension shall be continued for the
then-commencing year.
2. Duties. During the Term, Executive shall serve as the
President of the Corporation or in such other capacity or capacities as may be
determined by the Board of Directors of the Corporation. If requested by the
Board of Directors of the Corporation, Executive shall also serve, without
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additional compensation, as an officer or director of any subsidiary, affiliate
or joint venture of the Corporation. Executive shall perform such duties and
services as are incidental to the positions he holds or as he may, from time to
time, be requested to hold by the Board of Directors of the Corporation. The
Executive will devote his time, attention, skill, and energy to the business of
the Corporation, will use his best efforts to promote the success of the
Corporation's business, and will cooperate fully with the Board of Directors in
the advancement of the best interests of the Corporation. Nothing in this
Section 2, however, will prevent the Executive from engaging in additional
activities in connection with personal investments and community affairs that
are not inconsistent with the Executive's duties under this Agreement.
3. Base Salary. During the Term, the Corporation shall pay to
Executive, in equal installments no less frequently than twice per month (or at
such other intervals as are in effect from time to time for other executive
officers of the Corporation), a base salary at the rate of $84,000 per year.
4. Bonus.
(a) Within 60 days of the date hereof, in consideration of
Executive's execution of this Agreement and the commencement of his employment
hereunder, the Corporation shall pay Executive a one-time bonus equal to
$10,000.
(b) During each fiscal quarter commencing with April 1,
1997, Executive shall be eligible to receive a quarterly bonus (the "Quarterly
Bonus") which shall be equal to 5% of the Pre-Tax Profit (as herein defined) of
the Corporation for the year to date calculated as of the end of each fiscal
quarter and reduced by the amount of any Quarterly Bonus paid in the prior
fiscal quarters of such year. The calculation of the Quarterly Bonus shall be
based on the financial statements of the Corporation prepared in the ordinary
course of business. If any Quarterly Bonus is due Executive, the Quarterly
Bonus shall be paid by the Corporation within 30 days of the end of the first,
second and third fiscal quarters and within 120 days of the end of the fiscal
year, accompanied by a calculation of the amount of the Quarterly Bonus.
For purposes of this Agreement, the term "Pre-Tax Profit" shall mean the
reported net earnings of the Corporation and all other businesses under its
management control, before deduction for federal, state and local income taxes,
as reflected in the financial statements of the Corporation used to prepare the
quarterly and annual reports of Consolidated Capital of North America, Inc.,
the parent company of the Corporation ("Consolidated Capital"), filed with the
Securities and Exchange Commission. Pre-Tax Profit shall be determined on the
basis of generally accepted accounting principles applicable to United States
companies.
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5. Issuance of Stock Options. As part of the consideration for
services hereunder Executive shall be granted 500,000 options (the "Options")
with an exercise price of $2.00 per share to purchase common shares (the
"Shares") of Consolidated Capital. The Options shall vest in five equal
installments on each anniversary of the date of this Agreement during the Term
of this Agreement so long as Executive remains in the employ of the Corporation
on each such anniversary date. Vested options may be exercisable by Executive
for a period of five years from the date of grant for such portion of Options
designated as incentive stock options and ten years from the date of grant for
such portion of Options designated as non-qualified stock options, subject to
the provisions of Section 8 of this Agreement. The terms of the Options shall
be set forth in an Option Agreement between Consolidated Capital and Executive
(the "Option Agreement").
6. Additional Benefits.
(a) In the event that during the Term Consolidated Capital
causes to be filed with the Securities and Exchange Commission a registration
statement on Form S-8 (or equivalent form as may be in effect at such time) the
Executive may include in such registration statement all Shares underlying the
Options. In the event that during the Term Consolidated Capital causes to be
filed with the Securities and Exchange Commission a registration statement on a
form other than Form S-8, Executive shall have "piggyback" registration rights
to include in such registration statement all the Shares underlying the
Options, subject to a reasonable cutback in the inclusion of such Shares if the
Board or Consolidated Capital's underwriter determines that such cutback is
necessary to prevent an adverse effect on Consolidated Capital's offering.
(b) The Executive will be permitted to participate in
such pension, profit sharing, stock bonus, stock option, deferred compensation,
life insurance, hospitalization, major medical and other benefit plans of the
Corporation that may be in effect from the time, to the extent the Executive is
eligible under the terms of those plans.
(c) During the Term, Executive shall be entitled to three
weeks of vacation, and in addition thereto such personal days, sick leave and
other similar benefits in accordance with the policies of the Corporation from
time to time in effect for executives of comparable expertise and authority.
(d) During the Term, the Corporation shall pay the
premium on the existing $250,000 term life insurance policy now maintained by
Executive on Executive's life. It is understood that the Corporation shall
report the amount of such premium payments to the Internal Revenue Service in
accordance with the Internal Revenue Code and the Regulations issued thereunder
as income payable to Executive.
(e) Executive agrees that the Corporation may obtain key
man life insurance with respect to Executive, and in connection therewith,
agrees to submit to all reasonable and customary examinations by the provider
of such life insurance.
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(f) Executive shall be entitled to reimbursement for all
normal and reasonable travel, entertainment and other expenses necessarily
incurred by him in the performance of his duties hereunder, including but not
limited to expenses incurred in connection with the use of a cellular telephone
and a home business telephone. Executive shall have the use of a corporate
American Express Card for payment of necessary business expenses. Executive
shall submit on a timely basis such itemized accounts of all business expenses,
together with such vouchers or receipts for individual expense items, as the
Corporation may from time to time require under its established policies and
procedures.
(g) During the Term, the Corporation shall provide
Executive, for Executive's use, a late model automobile suitable to the status
of an executive of the Corporation and shall pay the attendant costs related
thereto, including, but not limited to, insurance, repairs, lease payments and
other related expenses, including gasoline.
7. Rights of Termination.
(a) For Cause. The Corporation shall have the right, at
any time effective upon notice to Executive, to terminate this Agreement and
Executive's employment hereunder for "cause" (as hereinafter defined). For
purposes of this Agreement, "cause" means: (1) Executive acting fraudulently in
his relations with the Corporation or on behalf of the Corporation, (2)
Executive misappropriating or doing material, intentional damage to the
property of the Corporation, (3) Executive being convicted of a felony, (4)
Executive's acts or omissions amounting to willful misconduct or recklessness
by Executive in the performance of his duties under this Agreement or the
habitual neglect of such duties or (5) any other material breach by Executive
of any of the terms of this Agreement.
(b) Disability; Death. In the event of Executive's
permanent and total disability as determined under the corporation's long-term
disability program or, if no such program has been adopted, the continuous
absence of Executive for 120 consecutive days or 150 days or more during any
twelve month period due to physical or mental illness or incapacity, the
Corporation shall have the right to terminate this Agreement and Executive's
employment hereunder upon 30 days' prior written notice. In the event that
Executive is able to and recommences rendering services and performing his
duties hereunder within such 30-day notice period, Executive shall be
reinstated and such notice shall be without further force or effect. If
Executive dies during the Term, this Agreement shall terminate immediately upon
his death.
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8. Effects of Termination.
(a) In the event that Executive's employment is
terminated pursuant to Section 7(a) hereof, (i) Executive's employment
hereunder shall immediately cease, (ii) the Corporation shall pay to Executive
his accrued and unpaid salary, accrued vacation time and expense reimbursement
through the date of termination in accordance with the Corporation's usual
procedures, (iii) all then non-exercisable options held by Executive shall
immediately and automatically terminate and (iv) Executive shall not be
entitled to any Quarterly Bonus for the fiscal quarter during which such
termination occurs or any subsequent fiscal quarter.
(b) In the event that Executive's employment is
terminated pursuant to Section 7(b) hereof, (i) Executive's employment
hereunder shall cease in accordance with Section 7(b), (ii) the Corporation
shall pay to Executive his accrued and unpaid salary, accrued vacation time and
expense reimbursement through the date of termination in accordance with the
Corporation's usual procedures, (iii) all then exercisable and non-exercisable
options shall become exercisable as set forth in the Option Agreement, (iv) the
Corporation shall pay to Executive that portion of the Quarterly Bonus, if any,
for the fiscal quarter during which the termination is effective, prorated
through the date of termination, and (v) in the event of the death of
Executive, any and all options (whether vested or unvested) shall be
transferred in accordance with Executive's will.
(c) In the event that Executive's employment hereunder is
terminated by the Corporation other than pursuant to Section 7(a) or (b), then:
(i) Executive shall be entitled to receive, and the Corporation shall continue
to pay to Executive, the annual salary specified in Section 3 for the remainder
of the Term, (ii) Executive shall be entitled, during the period during which
such severance payment is being paid, to receive all benefits under the
Corporation's medical insurance, disability insurance, life insurance and other
benefit plans as are then in effect for executives of the Corporation, (iii)
all then exercisable and non-exercisable options shall become exercisable as
set forth in the Option Agreement, and (iv) the Corporation shall pay to
Executive that portion of the Quarterly Bonus, if any, for the fiscal quarter
during which the termination is effective, prorated through the date of
termination.
(d) In the event that Executive's employment hereunder is
terminated by Executive, then: (i) the Corporation shall pay to Executive his
accrued and unpaid salary, accrued vacation time and expense reimbursement
through the date of termination in accordance with the Corporation's usual
procedures, (ii) all then non-exercisable options shall immediately and
automatically terminate upon such termination of employment and (iii) Executive
shall not be entitled to any Quarterly Bonus for the fiscal quarter during
which such termination occurs or any subsequent fiscal quarter.
(e) Executive's obligations pursuant to Sections 9 and 10
hereof shall survive any termination of this Agreement for any reason
whatsoever.
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9. Confidentiality.
(a) Executive understands and acknowledges that as a
result of Executive's employment with the Corporation, and involvement with the
business of the Corporation, he is or shall necessarily become informed of, and
have access to, confidential information of the Corporation including, without
limitation, inventions, patents, patent applications, trade secrets, technical
information, know-how, plans, specifications, marketing plans and information,
pricing information, identity of customers and prospective customers and
identity of suppliers, and that such information, even though it may have been
or may be developed or otherwise acquired by Executive, is the exclusive
property of the Corporation to be held by Executive in trust and solely for the
Corporation's benefit. Executive shall not at any time, either during or
subsequent to his employment hereunder, reveal, report, publish, transfer or
otherwise disclose to any person, corporation or other entity, or use, any of
the Corporation's confidential information, without the written consent of the
Corporation's Board of Directors, except for use on behalf of the Corporation
in connection with the Corporation's business, and except for such information
which legally and legitimately is or becomes of general public knowledge from
authorized sources other than Executive.
(b) Upon the termination of his employment with the
Corporation for any reason, Executive shall promptly deliver to the Corporation
all drawings, manuals, letters, notes, notebooks, reports and copies thereof
and all other materials, including, without limitation, those of a secret or
confidential nature, relating to the Corporation's business which are in
Executive's possession or control. The Corporation shall reimburse Executive
for any packing or moving costs reasonably incurred by Executive in connection
with the foregoing delivery.
For purposes of this Section 9 and Section 10, the term "Corporation" includes
the Corporation and any other predecessor corporation, and affiliates
(including, without limitation, distributors, licensees, franchisees,
subsidiaries and joint ventures), and shall include Consolidated Capital.
10. Non-Competition. Executive agrees that, for a period
commencing on the date hereof and ending one year after the termination of his
employment with the Corporation for any reason, he shall not, anywhere in North
America, directly or indirectly:
(a) engage, directly or indirectly, as an independent
contractor or otherwise, in any activity for or on behalf of any person or
entity in a competitive line of business to that carried on by the Corporation
during the term of his employment therewith;
(b) solicit or attempt to solicit business of any
customers of the Corporation (including prospective customers solicited by the
Corporation) for products or services the same or similar to those offered,
sold, produced or under development by the Corporation during the term of his
employment therewith or dealt in by Executive during his employment with the
Corporation;
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(c) otherwise divert or attempt to divert from the
Corporation any business whatsoever;
(d) solicit or attempt to solicit for any business
endeavor any employee of the Corporation;
(e) interfere with any employment relationship or other
business relationship between the Corporation and any other individual, person,
or other entity;
(f) use the name of the Corporation or a name similar the
reto; or
(g) render any services as an officer, director,
employee, partner, consultant or otherwise to, or have any interest as a
stockholder, partner, lender or otherwise in, any person which is engaged in
activities which, if performed by Executive would violate this Section 10.
The foregoing shall not prevent Executive from purchasing or owning up
to five percent (5%) of the voting securities of any corporation, the
securities of which are publicly-traded.
11. Remedies and Survival. Because the Corporation does not have
an adequate remedy at law to protect its interest in its trade secrets,
privileged, proprietary or confidential information and similar commercial
assets, or its business from Executive's competition, the Corporation shall be
entitled to injunctive relief, in addition to such other remedies and relief
that would, in the event of a breach or a threatened breach of the provisions
of Sections 9 or 10, be available to the Corporation. The Corporation shall
not be required to plead or prove the inadequacy of damages. The provisions of
Sections 9 and 10 and this Section 11 shall survive any termination of
Executive's employment with the Corporation for any reason whatsoever.
12. Bar Coding Equipment. The Corporation agrees that if the
Corporation converts its inventory control process to a bar coding process, the
Corporation shall purchase from Executive the new bar coding equipment owned by
Executive at a 50% discount, for a purchase price of $10,000.
13. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to its subject matter, merges
and supersedes any prior or contemporaneous agreements or understandings with
respect to its subject matter, and shall not be modified or terminated except
by another agreement in writing executed by the Corporation and Executive.
Failure of a party to enforce one or more of the provisions of this Agreement
or to require at any time performance of any of the obligations hereof shall
not be construed to be a waiver of such provisions by such party nor to in any
affect the validity of this Agreement or such party's right thereafter to
enforce any provision of this Agreement, nor to preclude such party from taking
any other action at any time which it would legally be entitled to take.
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14. Severability. If any provision of this Agreement is held to
be invalid or unenforceable by any court or tribunal of competent jurisdiction,
the remainder of this Agreement shall not be affected by such judgment, and
such provision shall be carried out as nearly as possible according to its
original terms and intent to eliminate such invalidity or unenforceability.
15. Successors and Assigns. Neither party shall have the right to
assign this personal Agreement, or any rights or obligations hereunder, without
the consent of the other party; provided, however, that upon the sale or
transfer of all or substantially all of the assets and business of the
Corporation to another party, or upon the merger or consolidation of the
Corporation with, or acquisition of the Corporation by, another corporation or
entity, this Agreement shall inure to the benefit of, and be binding upon, both
Executive and the party purchasing such assets, business and goodwill, or
surviving such merger or consolidation or acquiring the Corporation, as the
case may be, in the same manner and to the same extent as though such other
party were the Corporation. Subject to the foregoing, this Agreement shall
inure to the benefit of, and bind, the parties hereto and their legal
representatives, heirs, successors and assigns.
16. Communications. All notices and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
at the time when mailed in any United States post office enclosed in a
registered or certified postage-paid envelope and addressed as set forth at the
beginning of this Agreement, or to such other address as any party may specify
by notice to the other parties, or delivered by Federal Express or a similar
overnight courier to such address; provided, however, that any notice of change
of address shall be effective only upon receipt.
17. Construction; Counterparts. The headings contained in this
Agreement are for convenience only and shall in no way restrict or otherwise
affect this construction of the provisions hereof. References in this
Agreement to Sections are to the sections of this Agreement. This Agreement
may be executed in multiple counterparts, each of which shall be an original
and all of which together shall constitute one and the same instrument.
18. Governing Law. This Agreement shall be governed by the laws
of the State of California.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first set forth above.
ANGELES METAL TRIM CO.
By: /s/ Xxxxxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxx
Chairman of the Board
EXECUTIVE:
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
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