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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is executed as of the 17th
day of November, 1997 by and between AMERICAN ARCHITECTURAL PRODUCTS
CORPORATION, a Delaware corporation ("Company"), and XXXXX X. XXXXXX
("Employee").
RECITALS
A. Company desires to retain Employee as its President and Chief
Executive Officer, in accordance with provisions of this Agreement.
B. Employee desires to act as Company's President and Chief Executive
Officer, in accordance with the provisions of this Agreement.
PROVISIONS
In consideration of the mutual covenants and agreements contained in
this Agreement, the parties agree as follows:
1. APPOINTMENT OF PRESIDENT AND CHIEF EXECUTIVE OFFICER. Company hereby
employs Employee to serve as its President and Chief Executive Officer. As the
President and Chief Executive Officer of Company, Employee shall (a) be
responsible for managing the day-to-day operations of Company, (b) be
responsible for developing Company's strategic plans, and (c) perform such other
services xxx duties which are commensurate with Employee's position as President
and Chief Executive Officer as may be determined from time to time by Company's
Board of Directors.
2. PERFORMANCE. Employee shall devote his full time and effort to the
performance of his duties as an employee of Company and in accordance with the
policies and procedures and standards of performance in respect to the services
performed by him as are determined by the Board of Directors of Company from
time to time while this, Agreement is in force. This Agreement shall rot be
construed as preventing Employee from engaging in transactions unrelated to his
duties as an employee or from making investments of his assets, so long as they
do not conflict ut any manner with his employment as provided in this Agreement.
3. COMPENSATION. During, the "Term" of this Agreement (as that term is
defined in Section 9 of this Agreement), Employee shall receive compensation as
follows:
(a) Base Compensation. For all of the services to be rendered by
Employee in any capacity hereunder, Company will pay to employee the
sum of Twenty-Nine Thousand One Hundred Sixty-Six and 67/100 Dollars
($29,166.67) per month, payable in accordance with Company's normal
payroll practices ("Base Compensation").
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(b) Annual Bonus. In addition to the Base Compensation, Company will
pay to employee a bonus equal to (i) Employee's annual Base
Compensation, provided Company's pre;tax profits are equal to ten
percent (10%) of consolidated net sales for such fiscal year, (ii)
fifty percent (50%) of Employee's annual Base Compensation provided
Company's consolidated pre-tax profits are equal to five percent (5%)
of consolidated net sales for such fiscal year, (iii) a pro-rated
amount equal to fifty to one hundred percent (50-100%) of Employee's
Annual Base Compensation, provided Company's consolidated pre-tax
profits are equal to between five percent (5%) and ten percent (10%) of
consolidated net sales for such fiscal year, or (iv) an amount to be
established at the sole discretion of the Board of Directors, provided
Company's consolidated pre-tax profits are less than five percent (5%)
for such fiscal year (the "Annual Bonus"). The Annual Bonus shall be
determined by the Board of Directors within 90 days following the end
of each fiscal year and shall be paid to Employee no later an the 120th
day following the end of each fiscal year.
(c) Transaction Bonus. Upon the receipt by Company of the proceeds
of that certain Section 144A debt offering (the "Debt Offering")
substantially in accordance with the terms and conditions described in
the Indicative Term Sheet, dated November 3, 1997, and in the draft
Offering Memorandum, dated October 31, 1997, and upon the closing of
the Danvid Company acquisition and the Binnings Building Products, Inc.
acquisition, Company shall pay Employee a one-time bonus of Two Hundred
Fifty Thousand Dollars ($250,000).
(d) Stock Options. Incentive stock options will be provided to
Employee pursuant to the terns of the Incentive Stock Option Plan of
Company.
(e) Country Club Membership. The membership fee and monthly dues for
Employee to be a member of the Tippecanoe Country Club located in or
near Boardman, Ohio shall be paid by Company. In the event the
Tippecanoe Country Club is sold or ceases to operate for any reason, en
the country club membership fee and monthly dues for Employee to become
a member of a country club substantially similar to Tippecanoe County
Club shall be paid by Company.
4. VACATION. Employee shall be entitled to four (4) weeks paid vacation
per year and the weeks of vacation shall not accumulate from year to year.
5. INSURANCE. During the Term of this Agreement, Employee shall be
provided with insurance as follows:
(a) Health Insurance. Employee will be provided with the same
medical and dental coverage provided to all regular employees of
Company. Company will pay the cost of such medical and dental coverage
for Employee and his immediate family (i.e., spouse and dependent
children).
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(b) Disability Insurance. Company will provide and pay the premiums
for a long-term disability policy providing for coverage in the amount
of sixty percent (60%) of Employee's current annual Base Compensation.
(c) Life Insurance. Company shall provide and pay the premiums on a
split-dollar life insurance policy on the life of Employee to include a
$1,000,000 benefit payable to Employee's beneficiaries upon his death
and a $2,000,000 benefit payable to Company on his death, in accordance
with the terms of a separate agreement to be provided.
6. AUTOMOBILE. During the Term of this Agreement, Company will provide
to Employee (a) a car allowance in the amount of Seven Hundred Fifty Dollars
($750.00) per month and (b) reimbursement for maintenance and insurance
maintained by Employee on the vehicle utilized by Employee for business
purposes.
7. DISCLOSURE OF INFORMATION. During the Term of this Agreement and for
a period of two (2) years after the termination of this Agreement, Employee
shall not disclose any confidential or proprietary information concerning
Company and/or its products, methods of doing business, and the needs of its
Customers and employees including, but not limited to, customer lists and
records, policy manuals, price lists, business contacts, processes, devices,
plans, models, inventions, proprietary technology, supply sources, opportunities
for new business, financial and business methods and activities, financial
records, trade secrets, business techniques or processes (collectively, the
"Confidential Information") to any person, corporation, partnership, sole
proprietorship, governmental agency, organization, joint venture, or other
entity other an in the performance of his duties under this Agreement in
accordance with the provisions of is Agreement, Confidential Information will
not include information that is publicly available or becomes publicly known or
available through actions which are not attributable, directly or indirectly, to
Employee. Should Employee violate is provision of this Agreement, Company shall
be entitled to an action for injunctive relief as well as monetary damages, and
any payments of compensation remaining to be paid to Employee shall terminate
and no longer be required to be paid to Employee
8. NON-COMPETITION AND NON-SOLICITATION.
(a) Non-Competition. As an inducement to Company to engage Employee,
Employee covenants with Company that during the Term of this Agreement
and for a period of two (2) years following the date of termination of
is Agreement by Company for cause or by Employee (de "Non-Compare
Period"), Employee shall not, individually, or for, on behalf of, or in
conjunction with, any other individual company or other entity or
person, directly or indirectly, own (in whole or in part), manage,
operate, control, be an agent for, participate in, or be connected in
any manner with the ownership, management, operation, or control of any
corporation, partnership, proprietorship, or other business entity
engaged in a business which is the same as, or similar to, or competes
with, Company in all countries where Company is conducting or engaging
in the building products business at any time during the Non-Compete
Period.
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(b) Non-Solicitation; Non-Interference. During the Term of this
Agreement and ending three (3) years after the termination of is
Agreement by Company for cause or by Employee, Employee shall nor,
directly or indirectly:
(i) Solicit customers, business, patronage, or orders for
himself or for any person, firm, association, corporation, or other
entity engaged in a business that competes with Company's business,
or supervise sales agents or representatives in such sales
activities;
(ii) Employ or otherwise associate business with any officer or
employee of Company and/or any of its subsidiaries or affiliates; or
(iii) Induce any of officer, employee, or consultant of, or to,
Company and/or any of its subsidiaries or affiliates.
(c) Trade Secrets and Confidential Information. Employee
acknowledges that he has had, and during the Term shall continue to
have, access to and shall acquire Confidential Information. Employee
acknowledges at all of the Confidential Information is solely the
property of Company and constitutes trade secrets and confidential
information of Company and, upon termination of this Agreement,
Employee's knowledge of the Confidential Information shall enable him
to compete with Company in a manner likely to cause Company irrevocable
harm upon the disclosure of such matters. Employee hereby irrevocably
represents, warrants, and covenants that, during the Term of is
Agreement and ending two (2) years after the termination of this
Agreement by Employee or by Company for cause, he shall (i) not
disclose, directly or indirectly, any of the Confidential Information
to any individual, firm, corporation, or other entity, (ii) return all
of the Confidential Information his possession (without retaining
copies of any Confidential Information) to Company within five (5)
calendar days after the date his employment with Company is terminated
for any reason, and (iii) certify to Company that he has so complied.
9. TERM. Except in the case of earlier termination as specifically
provided for in Section 10 of this Agreement, the term of this Agreement shall
begin as of November 17, 1997, and shall continue for a period of three (3)
years thereafter, after which the term will continue on an annual basis until
one party notifies the other party, in writing, at least sixty (60) days prior
to its termination of is Agreement (the "Term"). In the event the Debt Offering
is not funded for any reason, this Agreement shall be null and void.
10. TERMINATION.
(a) Without Cause. The services of Employee may be terminated at
any time, without cause, by Employee or Company, upon Sixty (60) days'
advance written notice to the other party. the event Employee
terminates this Agreement, the obligations of each party under this
Agreement shall cease and shall be null and void upon the effective
date of such termination except for the provisions of Sections 7 and 8
of this Agreement which shall continue to be binding upon Employee
pursuant to their provisions and
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except for the obligations to pay Employee any accrued but unpaid Base
Compensation, bonus (if any), and benefits. In the event Company
terminates this Agreement pursuant to the provisions of is Section
10(a), the obligations of each party under this Agreement shall cease
and shall be null and void upon the effective date of such lamination
except (i) for the provisions of Section 3(a), 5, and 12 of this
Agreement which shall continue to be binding upon Company and except
for the obligations to pay Employee any accrued but unpaid Base
Compensation, bonus (if any), and benefits, and (ii) the provisions of
Sections 7 and 8 of this Agreement which shall continue to be binding
upon Employee.
(b) By Company for Cause. Company may terminate Employee, for good
cause, at any time during the Term of this Agreement upon giving
Employee ten (10) days written notice of its intent to terminate his
service. In the event of such termination, Employee shall not be
entitled to any benefits, nights, bonuses, or privileges under this
Agreement past the day of termination except for payment of any accrued
but unpaid Base Compensation, bonus (if any), and benefits. "Good
cause" shall be defined as (i) a material breach of this Agreement,
(ii) the negligence or willful mis-performance or non-performance by
Employee of his obligations and/or dudes under is Agreement, or (iii)
the commission of fraudulent or criminal acts on the part of Employee
which are adverse to de interests of Company.
11. SUCCESSORS. This Agreement shall not be terminate by the voluntary
dissolution of Company or its parent, subsidiary or successor, or merger whereby
Company (or such parent, subsidiary or successor corporation) is not the
surviving or resulting corporation, or any transfer of substantially all of the
assets of Company. the event of any such merger or consolidation or transfer of
assets, the provisions of this Agreement shall inure to the benefit of the
entity to which assets shall be transferred.
12. PERSONAL SERVICES. The services of Employee are of a personal
nature to Company md may not be assigned or transferred by Employee to any other
person, firm, corporation, or other entity without the prior express and written
consent of Company which may be arbitrarily withheld.
13. NOTICES. All notices, demands and other communications to be given
or delivered pursuant to this Agreement shall be in writing and shall be deemed
to have been given after (a) personal delivery or (b) twenty-four (24) hours
from transmission by telecopier or facsimile or (c) three (3) days from deposit
the mails registered or certified mail, return receipt requested, and postage
prepaid to the party to whom notice is to be give, in any case at the following
addresses:
If to Employee: Xxxxx X. Xxxxxx
000 Xxxxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
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If to Company: American Architectural Products Corporation
000 Xxxxxxxx-Xxxxxxxx Xxxx, Xxxxxxxx X - Xxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
with a copy to: American Commercial Holdings, Inc.
000 Xxxxx Xxxx, Xxxx, Xx. 000
Xxxxxxxxx, Xxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
or such other address as such party may designate from time to time in a notice
given thereunder.
14. GOVERNING LAW. It is agreed that this Agreement shall be governed
by, construed, and enforced in accordance with the laws of the State of Ohio.
15. ENTIRE AGREEMENT. This Agreement shall constitute the entire
agreement between the parties. Any prior understanding or representation of any
kind preceding the date of this Agreement shall not be binding upon either party
except to the extent incorporated in this Agreement.
16. MODIFICATIONS. Any modification of this Agreement or additional
obligation assumed by either party in connection with this Agreement shall be
binding only if evidenced in writing and signed by each party or an authorized
representative of each party.
17. NO WAIVER. The failure of either party to this Agreement to insist
upon the performance of any of the terms and conditions of this Agreement, or
the waiver of any breach of any of the terms and conditions of this Agreement,
shall not be construed as thereafter waiving any such teens and conditions, but
the same shall continue and remain in full force and effect as if no such
forbearance or waiver had occurred.
18. ATTORNEY FEES. In the event that any action is filed relation to
this Agreement, the unsuccessful party in the action shall pay to the successful
party, in addition to all the sums that either party may be called on to pay, a
reasonable sum for the successful party's attorney's fees.
19. EFFECT OF PARTIAL INVALIDITY. The invalidity of any portion of this
Agreement will not and shall not be deemed to affect the validity of any other
provision. In the event that any provision of this Agreement is held to be
invalid, the parties agree that the remaining provisions shall be deemed to be
in full force and effect as if they had been executed by both parties subsequent
to the expungement of the invalid provisions.
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20. PARAGRAPH HEADINGS. The titles to the paragraphs of this Agreement
are solely for the convenience of the parties and shall not be used to explain,
modify, simplify, or aid in the interpretation of the provisions of this
Agreement
21. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the heirs, personal representatives, successors, and permitted
assigns of the respective parties to this Agreement.
22. CHANGE IN CONTROL. In the event (a) all or substantially all of the
assets of Company are sold, (b) AAP Holdings, Inc. ("AAP") sells shares of
common stock of Company such at AAP no longer owns at least thirty-one percent
(31%) of the issued and outstanding shares of Company, or (c) Company merges
with or into another entity such at AAP does not own at least thirty-one percent
(31 %) of de ownership interest of such an entity (collectively, the "Change in
Control"), and if Employee notifies Company and AAP in writing on or within ten
(10) days after Employee knows such a Change ut Control has occurred that
Employee objects to the Change in Control, then Company shall pay to Employee an
amount equal to one times his Base Compensation.
23. REIMBURSEMENT OF EXPRESS. Upon the submission of invoices paid by
Employee to advisors he engaged to assist him in the negotiation and preparation
of is Agreement, Company shall reimburse Employee for all reasonable expenses
incurred by him in connection therewith up to an aggregate maximum amount of
$7,500 in accordance with Company's policies and procedures.
IN WITNESS WHEREOF, each party to this Agreement has caused it to be
executed on the date indicated on Page 1 of this Agreement.
EMPLOYEE: COMPANY:
AMERICAN ARCHITECTURAL PRODUCTS
CORPORATION
/s/ Xxxxx X. Xxxxxx By:/s/ Xxxxxx X. Xxxxxxxxxx
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XXXXX X. XXXXXX Xxxxxx X. Xxxxxxxxxx
Chairman of the Board
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