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Exhibit 10.13
KEY EMPLOYEE SALARY CONTINUATION AGREEMENT
AGREEMENT, dated as of the 11th day of December 1997 between REPUBLIC
AUTOMOTIVE PARTS, INC., a Delaware corporation (the "Company"), and Xxxxxx X.
Xxxxxxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company considers it essential to the best interests of
the Company and its stockholders that its management be encouraged to remain
with the Company and to continue to devote full attention to the Company's
business in the event an effort is made to obtain control of the Company through
a tender offer or otherwise;
WHEREAS, in this connection, the Company recognized that the
possibility for a change in control and the uncertainty and questions which it
may raise among management may result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders;
WHEREAS, the Company's Board of Directors (the "Board") has
accordingly, determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Company's
management to their assigned duties without distraction in the face of the
potentially disturbing circumstances arising from the possibility of a change in
control of the Company;
WHEREAS, the Executive is a key employee of the Company;
WHEREAS, the Company believes the Executive has made valuable
contributions to the productivity and profitability of the Company;
WHEREAS, should the Company receive any proposals from a third person
concerning a possible business combination with, or acquisition of equity
securities of, the Company, the Board believes it imperative that the Company
and the Board be able to rely upon the Executive to continue in his position,
and that the Company be able to receive and rely upon his advice, if so
requested, as to the best interests of the Company and its stockholders without
concern that he might be distracted by the personal uncertainties and risks
created by such a proposal; and
WHEREAS, should the Company receive any such proposals, in addition to
the Executive's regular duties, he may be called upon to assist in the
assessment of such proposals, advise management and the Board as to whether such
proposals would be in the best interests of the Company and its stockholders,
and to take such other actions as the Board might determine to be appropriate;
NOW, THEREFORE, to assure the Company that it will have the continued
undivided attention and services of the Executive and the availability of his
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advice and counsel notwithstanding the possibility, threat or occurrence of a
bid to take over control of the Company, and to induce the Executive to remain
in the employ of the Company, and for other good and valuable consideration, the
Company and the Executive agree as follows:
1. Services During Certain Events.
In the event a third person begins a tender or exchange offer,
circulates a proxy to stockholders, or takes other steps seeking to effect a
Change in Control (as hereafter defined), the Executive agrees that he will not
voluntarily leave the employ of the Company, and will render the services
contemplated in the recitals to this Agreement, until the third person has
abandoned or terminated his or its efforts to effect a Change in Control or
until after such a Change in Control has been effected. In the event that the
Executive breaks his obligations under this paragraph, he shall forfeit his
rights to the benefits conferred hereby (which forfeiture shall constitute the
sole remedy of the Company for such breach). The Company shall promptly notify
the Executive if and when it receives knowledge that steps are being taken to
effect a Change in Control.
2. Change in Control.
For the purposes of this Agreement, "Change in Control" shall have the
same meaning as is set forth in Section 1.2 of the Republic Automotive Parts,
Inc. Stock Compensation Plan as adopted by the Shareholders on April 27, 1989.
3. Circumstances Triggering Receipt of Benefits.
The Company shall provide the Executive with the benefits set forth in
Section 5 immediately upon any "Involuntary Termination" of the Executive's
employment by the Company within one year following a Change in Control.
"Involuntary Termination" shall mean the termination of the Executive's
employment with the Company during such period (a) by the Company unless the
termination is: (i) by reason of the Executive's death or (ii) by reason of the
Executive's inability by reason of illness or other physical and mental
disability to perform his duties for any consecutive 180 day period or (iii)
termination upon the Executive's reaching the normal retirement age specified in
the Company's Retirement Plan; (b) by such Executive after any reduction in his
base salary, any material reduction in his fringe benefits, his relocation to a
location outside a 50 mile radius of his current office without his consent, or
a material decrease in his responsibilities or authority or any other material
adverse change in the condition of his employment.
4. Notice of Termination.
Any termination of the Executive's employment with the Company by the
Company or by the Executive, in each case as contemplated by Section 3, shall be
communicated by written "Notice of Termination" to the other party hereto.
5. Benefits.
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Subject to the conditions set forth in Section 3, the following
benefits (subject to any applicable payroll or other taxes required to be
withheld) shall be paid to the Executive: (a) the Company shall continue paying
such Executive's then current annual base salary for a period of one year
following such termination, such amount to be in addition to any other coverage,
fringe benefits, payments and distributions to which such Executive is entitled;
and (b) all Stock Options granted to such Executive which the Executive shall
not then have been entitled to exercise shall be accelerated immediately prior
to or concurrently with the occurrence with the change in control and the
optionee shall have the right to exercise all such options. Notwithstanding
clause (a) above, beginning six months following termination from the Company,
benefits otherwise provided by clause (a) shall be reduced dollar for dollar for
any benefits of the nature provided by clause (a) that are received by the
Executive from another employer.
6. Continuing Obligations.
In order to induce the Company to enter into this Agreement, the
Executive hereby agrees that all documents, records, techniques, business
secrets and other information which have come into his possession from time to
time during his employment hereunder, shall be deemed to be confidential and
proprietary to the Company and the Executive further agrees to retain in
confidence any confidential information known to him concerning the Company and
its subsidiaries and their respective businesses so long as such information is
not publicly disclosed.
7. Successors.
(a) The Company will require any successor controlled by the Company's
Board of Directors (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to allow substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. Failure of the Company to
obtain such agreement prior to the effectiveness of any such succession shall be
a breach of this Agreement and shall entitle the Executive to the benefits
provided by Section 5 from the Company in the same amount and on the same terms
as the Executive would be entitled hereunder upon Involuntary Termination within
one year following a Change in Control as provided in Section 3, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the date of the Involuntary Termination. As
used in the Agreement, "Company" shall mean the Company as hereinbefore defined
and any successor to its business and/or assets as aforesaid which executes and
delivers the agreement provided for in this Section 7 or which otherwise becomes
bound by all the terms and provisions of this Agreement by operation of law.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. If the Executive should
die while any amounts are payable to him hereunder, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to his devisee, legatee or other designee or, if there be no such
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designee, to his estate.
8. Notices.
For purposes of this Agreement, notices and all other communications
provided herein shall be in writing and shall be deemed to have been duly given
when delivered or mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Xxxxxx X. Xxxxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
If to the Company:
Republic Automotive Parts, Inc.
000 Xxxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX
Attention: Secretary
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
9. Governing Law.
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Delaware.
10. Miscellaneous.
Except as provided in Section 13, no provisions of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or any prior subsequent time. This agreement supersedes
all prior agreements with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement.
11. Separability.
The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
12. Non-assignability.
This Agreement is personal in nature and neither of the parties hereto
shall, without the consent of the other, assign or transfer this agreement or
any
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rights or obligations hereunder, except as provided in Section 7. Without
limiting the foregoing, the Executive's right to receive payments hereunder
shall not be assignable or transferable, whether by pledge, creation of security
interest or otherwise, other than a transfer by his will or by the laws of
descent or distribution, and in the event of any attempted assignment or
transfer contrary to this paragraph the Company shall have no liability to pay
any amount so attempted to be assigned or transferred.
13. Termination; Modification.
The Company may terminate or modify this agreement at any time by
written notice of such termination or modification given to the Executive;
except that no such termination or modification shall be made, and if made shall
have no effect, (a) within one year after the Change in Control in question, (b)
following a termination of employment as contemplated by Section 3, or (c)
during any period of time when the Company has knowledge that any third person
has taken steps reasonably calculated to effect a Change in Control until, in
the opinion of the Board, the third person has abandoned or terminated his
efforts to effect a Change in Control. Any decision by the Board made in good
faith as to the nature of any steps taken by such third person or as to whether
the third person has abandoned or terminated his efforts to effect a Change in
Control shall be conclusive and binding on the Executive.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above set forth.
REPUBLIC AUTOMOTIVE PARTS, INC.
By /s/Xxxxx X. Xxxxxxxx
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President & Chief Executive Officer
EXECUTIVE
By /s/Xxxxxx X. Xxxxxxxxx
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