Exhibit 10.5
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of
January 1, 2003, by and between WOODCRAFT INDUSTRIES, INC., a Minnesota
corporation (the "Company"), and XXXX XXXX ("Executive").
A. The Company engages in the design, manufacture, assembly and sale
of wood cabinetry components and products throughout North America.
B. Executive is presently employed by the Company.
C. The Company desires to continue to employ Executive, and
Executive desires to continue to be employed by the Company, subject to the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective agreements of the Company and Executive set forth below, the Company
and Executive, intending to be legally bound, agree as follows:
1. EMPLOYMENT. Effective as of January 1, 2003, the Company shall
employ Executive, and Executive shall accept such employment and perform
services for the Company, upon the terms and conditions set forth in this
Agreement.
2. TERM OF EMPLOYMENT. Unless terminated at an earlier date in
accordance with Section 9 hereof:
(a) AS EMPLOYEE. The term of Executive's employment with the Company
shall be for a period commencing on the date hereof and ending on December 31,
2004.
(b) AS CONSULTANT. For a period of five (5) months after December 31,
2004, Executive shall perform not less than three hundred (300) hours of
consulting services for the Company, PrimeWood, Inc. ("PrimeWood"), Brentwood
Acquisition Corp. ("Brentwood") and any other direct or indirect subsidiaries of
the Company (PrimeWood, Brentwood and all of the other subsidiaries of the
Company being hereinafter collectively referred to as the "Affiliates"). Such
services shall be performed at such times and on such projects as may be
specified from time to time by the Chief Executive Officer of the Company.
Executive shall be compensated for such consulting services at the rate of
$125.00 per hour. The consulting arrangement may be renewed or extended on such
terms as may be agreed upon by Executive and the Company in writing. In the
event Executive shall not have received a severance payment provided for in
Section 10(a)(ii) or (iii) and in the event Executive shall not have been given
a reasonable opportunity to perform at least 300 hours of consulting services
for the Company prior to May 31, 2005, the Company shall pay Executive the
difference between $37,500 and the amount of
any consulting fees theretofore paid by the Company to Executive pursuant to
this Section 2(b), which payments shall be made not later than May 31, 2005.
3. POSITION AND DUTIES.
(a) EMPLOYMENT WITH THE COMPANY. During the term of Executive's
employment with the Company, Executive shall perform such duties and
responsibilities for the Company and the Affiliates as the Board of Directors of
the Company (the "Board") shall assign to him from time to time consistent with
his position. Executive shall be an executive officer of the Company and
Executive's title shall be Vice President - Sales and Marketing. Executive
presently has line and some staff responsibilities for the Company and
PrimeWood. Executive will assume staff responsibilities for Brentwood as of the
date hereof. It is contemplated that Executive's line responsibilities of the
Company will be transferred in early 2003 and line responsibilities for
PrimeWood will be transferred in 2004, in each case, on a schedule reasonably
satisfactory to Executive and the Chief Executive Officer of the Company. Staff
responsibilities for the Company and the Affiliates will continue until December
31, 2004.
(b) PERFORMANCE OF DUTIES AND RESPONSIBILITIES. Executive shall serve
the Company and the Affiliates faithfully and to the best of his ability and
shall devote his full working time, attention and efforts to the business of the
Company and the Affiliates during his employment with the Company. Executive
hereby represents and confirms that he is under no contractual or legal
commitments that would prevent him from fulfilling his duties and
responsibilities as set forth in this Agreement. During his employment with the
Company, Executive may participate in charitable activities and personal
investment activities to a reasonable extent, and he may serve as a director of
business organizations in which he has personally invested, so long as such
activities and directorships do not interfere with the performance of his duties
and responsibilities hereunder.
4. COMPENSATION.
(a) BASE SALARY. While Executive is employed by the Company
hereunder, the Company shall pay to Executive an annual base salary of $126,690
for 2003 and at the rate of $130,491 for 2004, less, in each case, deductions
and withholdings, which base salary shall be paid in accordance with the
Company's normal payroll policies and procedures.
(b) INCENTIVE COMPENSATION. While Executive is employed by the
Company as an employee hereunder (as opposed to a consultant), Executive shall
be entitled to participate in the Company's Executive Incentive Compensation
Plan, as described in Exhibit A hereto. Executive shall be entitled to
guaranteed minimum incentive compensation of $40,000 for 2003 payable in 2003
upon request of Executive; any such incentive compensation earned by Executive
for 2003 in excess of $40,000 shall be payable on or before March 31, 2004.
Incentive compensation for 2004 shall be payable on or before March 31, 2005.
(c) EMPLOYEE BENEFITS. While Executive is employed by the Company
hereunder as an employee (as opposed to employment as a consultant), Executive
shall be
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entitled to participate in all employee benefit plans and programs of the
Company to the extent that Executive meets the eligibility requirements for each
individual plan or program. The Company provides no assurance as to the adoption
or continuance of any particular employee benefit plan or program, and
Executive's participation in any such plan or program shall be subject to the
provisions, rules and regulations applicable thereto.
(d) EXPENSES. While Executive is employed by the Company hereunder
(whether as an employee or as a consultant), the Company shall reimburse
Executive for all reasonable and necessary out-of-pocket business, travel and
entertainment expenses incurred by him in the performance of his duties and
responsibilities hereunder, subject to the Company's normal policies and
procedures for expense verification and documentation; provided, however, that
if Executive relocates his residence from the St. Cloud metropolitan area, the
Company shall not be liable for more than $1,000 of travel expenses per trip
from Executive's residence to Wahpeton and/or St. Cloud.
5. CONFIDENTIAL INFORMATION. Except as permitted by the Board,
during the term of Executive's employment with the Company and at all times
thereafter, Executive shall not divulge, furnish or make accessible to anyone or
use in any way other than in the ordinary course of the business of the Company
and the Affiliates, any confidential, proprietary or secret knowledge or
information of the Company or any of the Affiliates that Executive has acquired
or shall acquire during the term of his work for the Company or any of the
Affiliates as an employee, whether developed by himself or by others, concerning
(i) any trade secrets, (ii) any confidential, proprietary or secret designs,
processes, formulae, plans, devices or material (whether or not patented or
patentable) directly or indirectly useful in any aspect of the business of the
Company or any of the Affiliates, (iii) any customer or supplier lists of the
Company or any of the Affiliates, (iv) any confidential, proprietary or secret
development or research work of the Company or any of the Affiliates, (v) any
strategic or other business, marketing or sales plans of the Company or any of
the Affiliates, (vi) any financial data or plans respecting the Company or any
of the Affiliates, or (vii) any other confidential or proprietary information or
secret aspects of the business of the Company or any of the Affiliates.
Executive acknowledges that the above-described knowledge and information
constitutes a unique and valuable asset of the Company and represents a
substantial investment of time and expense by the Company or one or more of the
Affiliates, and that any disclosure or other use of such knowledge or
information other than for the sole benefit of the Company or any of the
Affiliates would be wrongful and would cause irreparable harm to the Company.
During the term of Executive's employment with the Company, Executive shall
refrain from any acts or omissions that would reduce the value of such knowledge
or information to the Company. The foregoing obligations of confidentiality
shall not apply to any knowledge or information that (i) is now or subsequently
becomes generally publicly known in the form in which it was obtained from the
Company or any of the Affiliates, (ii) is independently made available to
Executive in good faith by a third party who has not violated a confidential
relationship with the Company or any of the Affiliates, or (iii) is required to
be disclosed by legal process, other than as a direct or indirect result of the
breach of this Agreement by Executive.
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6. VENTURES. If, during the term of Executive's employment with the
Company, Executive is engaged in or associated with the planning or implementing
of any project, program or venture involving the Company or any of the
Affiliates and a third party or parties, all rights in such project, program or
venture shall belong to the Company. Except as approved in writing by the Board,
Executive shall not be entitled to any interest in any such project, program or
venture or to any commission, finder's fee or other compensation in connection
therewith, other than the compensation to be paid to Executive by the Company as
provided herein. Executive shall have no interest, direct or indirect, in any
customer or supplier that conducts business with the Company or any of the
Affiliates, unless such interest has been disclosed in writing to and approved
by the Board before such customer or supplier seeks to do business with the
Company or any of the Affiliates; ownership by Executive, as a passive
investment, of less than 2.5% of the outstanding shares of capital stock of any
corporation listed on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of this Section 6.
7. NONCOMPETITION COVENANT.
(a) AGREEMENT NOT TO COMPETE. During the term of Executive's
employment with the Company and for a period of 12 consecutive months from the
later of (i) the date of the termination of such employment, whether such
termination is with or without Cause (as defined below), or whether such
termination is at the instance of Executive or the Company, or (ii) the date of
termination of Executive's consulting services for the Company and the
Affiliates, Executive shall not, directly or indirectly, throughout North
America, engage in any business that the Company or any of the Affiliates has
engaged in during the term of Executive's work for the Company or any of the
Affiliates as an employee or consultant, or any part of such business, including
without limitation the design, development, manufacture, distribution,
marketing, leasing or selling of hardwood or vinyl doors, parts or accessories,
veneer raised panels or veneer profile wrapped accessories, in any manner or
capacity, including without limitation as a proprietor, principal, agent,
partner, officer, director, stockholder, employee, member of any association,
consultant or otherwise. Notwithstanding the foregoing, from and after August 1,
2004, Executive shall be entitled to perform consulting services for (i) door
manufacturers whose market is limited to custom cabinet shops in Texas and/or
Oklahoma (such as Texas Door Division of Western Cabinets), (ii) sellers of
building material millwork that are not competitors of the Company and whose
customers are situated outside Minnesota, Wisconsin and North Dakota, and (iii)
such other businesses as may be approved in writing by the Chief Executive
Officer of the Company. Any questions relating to activities permitted hereunder
during the aforedescribed 12-month period shall be resolved by the Chief
Executive Officer of the Company. Ownership by Executive, as a passive
investment, of less than 2.5% of the outstanding shares of capital stock of any
corporation listed on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of this Section 7(a).
(b) AGREEMENT NOT TO HIRE. During the term of Executive's employment
with the Company and for a period of 24 consecutive months from the later of (i)
the date of the termination of such employment, whether such termination is with
or without Cause (as defined below), or whether such termination is at the
instance of Executive or the Company, or (ii) the
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date of termination of Executive's consulting services for the Company and the
Affiliates, Executive shall not, directly or indirectly, hire, engage or solicit
any person who is then an employee of the Company or any of the Affiliates or
who was an employee of the Company or any of the Affiliates at the time of
Executive's termination of employment, in any manner or capacity, including
without limitation as a proprietor, principal, agent, partner, officer,
director, stockholder, employee, member of any association, consultant or
otherwise.
(c) AGREEMENT NOT TO SOLICIT. During the term of Executive's
employment with the Company and for a period of 24 consecutive months from the
later of (i) the date of the termination of such employment, whether such
termination is with or without Cause (as defined below), or whether such
termination is at the instance of Executive or the Company, or (ii) the date of
termination of Executive's consulting services for the Company and the
Affiliates, Executive shall not, directly or indirectly, solicit, request,
advise or induce any current or potential customer, supplier or other business
contact of the Company or any of the Affiliates to cancel, curtail or otherwise
change its relationship with the Company or any of the Affiliates, in any manner
or capacity, including without limitation as a proprietor, principal, agent,
partner, officer, director, stockholder, employee, member of any association,
consultant or otherwise.
(d) ACKNOWLEDGMENT. Executive hereby acknowledges that the provisions
of this Section 7 are reasonable and necessary to protect the legitimate
interests of the Company and that any violation of this Section 7 by Executive
shall cause substantial and irreparable harm to the Company to such an extent
that monetary damages alone would be an inadequate remedy therefor. Therefore,
in the event that Executive violates any provision of this Section 7, the
Company shall be entitled to an injunction, in addition to all the other
remedies it may have, restraining Executive from violating or continuing to
violate such provision.
(e) BLUE PENCIL DOCTRINE. If the duration of, the scope of or any
business activity covered by any provision of this Section 7 is in excess of
what is valid and enforceable under applicable law, such provision shall be
construed to cover only that duration, scope or activity that is valid and
enforceable. Executive hereby acknowledges that this Section 7 shall be given
the construction which renders its provisions valid and enforceable to the
maximum extent, not exceeding its express terms, possible under applicable law.
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8. PATENTS, COPYRIGHTS AND RELATED MATTERS.
(a) DISCLOSURE AND ASSIGNMENT. Executive shall immediately disclose
to the Company any and all improvements and inventions that Executive may
conceive and/or reduce to practice individually or jointly or commonly with
others while he is employed with the Company with respect to (i) any methods,
processes or apparatus concerned with the development, use or production of any
type of products, goods or services sold or used by the Company or any of the
Affiliates, and (ii) any type of products, goods or services sold or used by the
Company or any of the Affiliates. Executive also shall immediately assign,
transfer and set over to the Company his entire right, title and interest in and
to any and all of such inventions as are specified in this Section 8(a), and in
and to any and all applications for letters patent that may be filed on such
inventions, and in and to any and all letters patent that may issue, or be
issued, upon such applications. In connection therewith and for no additional
compensation therefor, but at no expense to Executive, Executive shall sign any
and all instruments deemed necessary by the Company or any of the Affiliates
for:
(i) the filing and prosecution of any applications for
letters patent of the United States or of any foreign
country that the Company may desire to file upon such
inventions as are specified in this Section 8(a);
(ii) the filing and prosecution of any divisional,
continuation, continuation-in-part or reissue
applications that the Company may desire to file upon
such applications for letters patent; and
(iii) the reviving, re-examining or renewing of any of such
applications for letters patent.
Minnesota Statutes Section 181.78 provides that the agreement of Executive
contained in this Section 8(a) does not apply, and written notification is
hereby given to Executive that this Section 8(a) shall not apply, to any
invention for which no equipment, supplies, facilities, confidential,
proprietary or secret knowledge or information, or other trade secret
information of the Company or any of the Affiliates was used and that was
developed entirely on Executive's own time, and (i) that does not relate (A)
directly to the business of the Company or any of the Affiliates, or (B) to the
actual or demonstrably anticipated research or development of the Company or any
of the Affiliates, or (ii) that does not result from any work performed by
Executive for the Company or any of the Affiliates.
(b) COPYRIGHTABLE MATERIAL. All right, title and interest in all
copyrightable material that Executive shall conceive or originate individually
or jointly or commonly with others, and that arise during the term of his
employment with the Company and out of the performance of his duties and
responsibilities under this Agreement, shall be the property of the Company and
are hereby assigned by Executive to the Company, along with ownership of any and
all copyrights in the copyrightable material. Upon request and without further
compensation
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therefor, but at no expense to Executive, Executive shall execute any and all
papers and perform all other acts necessary to assist the Company to obtain and
register copyrights on such materials in any and all countries. Where
applicable, works of authorship created by Executive for the Company or any of
the Affiliates in performing his duties and responsibilities hereunder shall be
considered "works made for hire," as defined in the U.S. Copyright Act.
(c) KNOW-HOW AND TRADE SECRETS. All know-how and trade secret
information conceived or originated by Executive that arises during the term of
his employment with the Company and out of the performance of his duties and
responsibilities hereunder or any related material or information shall be the
property of the Company, and all rights therein are hereby assigned by Executive
to the Company.
9. TERMINATION OF EMPLOYMENT.
(a) The Executive's employment with the Company shall terminate
immediately upon:
(i) Executive's receipt of written notice from the Company of
the termination of his employment;
(ii) the Company's receipt of Executive's written resignation
from the Company;
(iii) Executive's Disability (as defined below);
(iv) Executive's death; or
(v) the expiration of the term of Executive's employment with
the Company as specified in Section 2 hereof.
(b) The date upon which Executive's termination of employment with
the Company occurs shall be the "Termination Date."
10. PAYMENTS UPON TERMINATION OF EMPLOYMENT.
(a) If Executive's employment with the Company is terminated by the
Company for any reason other than for Cause (as defined below), or by Executive
as a result of his resignation for Good Reason, the Company shall:
(i) pay to Executive as severance pay an amount equal to his
current base salary until December 31, 2004:
(ii) if Executive elects to continue his group health
insurance coverage with the Company following the termination of
his employment with the Company, reimburse him for the full cost
of the premiums he is required
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to pay to maintain such coverage at the same level of coverage
that was in effect as of the Termination Date until December 31,
2004.
Any amount payable to Executive as severance pay or reimbursement for the cost
of the continuation of his group health insurance coverage hereunder shall be
subject to deductions and withholdings and shall be paid to Executive by the
Company in approximately equal monthly installments commencing on the second
normal payroll date of the Company following the expiration of all applicable
rescission periods provided by law and continuing monthly thereafter. Any amount
payable to Executive as incentive compensation hereunder for 2004 shall be paid
to Executive by the Company in the same manner and at the same time that
incentive compensation payments are made to current employees of the Company,
but no earlier than the first normal payroll date of the Company following the
expiration of all applicable rescission periods provided by law.
The Company shall be entitled to deduct from any severance pay otherwise payable
to Executive hereunder: (i) any amount earned as income by Executive after the
Termination Date as a result of self-employment or employment with any other
employer, and (ii) any amount received by Executive after the Termination Date
under any short-term or long-term disability insurance plan or program provided
to him by the Company. In addition, the Company shall be entitled to cease
making reimbursement payments to Executive for the cost of the continuation of
his group health insurance coverage with the Company after the Termination Date
if Executive becomes eligible for comparable group health insurance coverage
from any other employer. For purposes of mitigation and reduction of the
Company's financial obligations to Executive under this Section 10(a), Executive
shall promptly and fully disclose to the Company in writing: (i) the nature and
amount of any such earned income from self-employment or employment with any
other employer, (ii) the amount of any such disability insurance payments, or
(iii) the fact that he has become eligible for comparable group health insurance
coverage from any other employer, and Executive shall be liable to repay any
amounts to the Company that should have been so mitigated or reduced but for
Executive's failure or unwillingness to make such disclosures.
(b) If Executive's employment with the Company is terminated by
reason of:
(i) Executive's abandonment of his employment or Executive's
resignation for any reason other than Good Reason (as
defined below),
(ii) termination of Executive's employment by the Company for
Cause (as defined below),
(iii) Executive's death, or
(iv) the expiration of the term of Executive's employment with
the Company as specified in Section 2 hereof on account
of delivery of a written notice to the Company that
Executive elects not to extend the term of this
Agreement,
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the Company shall pay to Executive or his beneficiary or his estate, as the case
may be, his base salary through the Termination Date.
(c) "Cause" hereunder shall mean:
(i) an act or acts of dishonesty undertaken by Executive and
intended to result in substantial gain or personal
enrichment of Executive at the expense of the Company or
any of the Affiliates;
(ii) unlawful conduct or gross misconduct that is willful and
deliberate on Executive's part and that, in either event,
is materially injurious to the Company or any of the
Affiliates;
(iii) the conviction of Executive of a felony;
(iv) failure of Executive to perform his duties and
responsibilities hereunder or to satisfy his obligations
as an officer or employee or consultant of the Company,
which failure has not seen cured by Executive within 30
days after written notice thereof to Executive from the
Company; or
(v) material breach of any terms and conditions of this
Agreement by Executive not caused by the Company, which
breach has not been cured by Executive within ten days
after written notice thereof to Executive from the
Company.
(d) "Good Reason" hereunder shall mean:
(i) material breach of any terms and conditions of this
Agreement by the Company not caused by Executive, which
breach has not been cured by the Company within ten days
after written notice thereof to the Company from
Executive;
(ii) the relocation of Executive's office by more than 50
miles from the St. Cloud, Minnesota metropolitan areas
without Executive's prior written consent; or
(iii) a reduction of Executive's base salary or a material
modification to the incentive compensation plan attached
hereto as Exhibit A that decreases by a substantial
amount Executive's opportunity to earn incentive
compensation, unless (x) such reduction is part of a
general reduction in the base salaries and/or incentive
compensation plans for all executive officers of the
Company and
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(y) Executive's base salary is not reduced by more than
10% of his then current base salary.
(e) "Disability" hereunder shall mean the inability of Executive to
perform on a full-time basis the duties and responsibilities of his employment
with the Company by reason of his illness or other physical or mental impairment
or condition, if such inability continues for an uninterrupted period of 180
days or more during any 360-day period. A period of inability shall be
"uninterrupted" unless and until Executive returns to full-time work for a
continuous period of at least 30 days.
(f) In the event of termination of Executive's employment, the sole
obligation of the Company shall be its obligation to make the payments called
for by Sections 10(a) or 10(b) hereof, as the case may be, and the Company shall
have no other obligation to Executive or to his beneficiary or his estate,
except as otherwise provided by law, under the terms of any other applicable
agreement between Executive and the Company or under the terms of any employee
benefit plans or programs then maintained by the Company in which Executive
participates.
(g) Notwithstanding the foregoing provisions of this Section 10, the
Company shall not be obligated to make any payments to Executive under Section
10(a) hereof unless Executive shall have signed a release of claims in favor of
the Company in a form to be prescribed by the Board, all applicable
consideration periods and rescission periods provided by law shall have expired
and Executive is in strict compliance with the terms of Sections 5, 7(a), 7(b),
7(c), 8(a), and 8(b) hereof as of the dates of the payments.
11. RETURN OF RECORDS AND PROPERTY. Upon termination of his
employment with the Company, Executive shall promptly deliver to the Company any
and all records and any and all property of the Company or any of the Affiliates
in his possession or under his control, including without limitation manuals,
books, blank forms, documents, letters, memoranda, notes, notebooks, reports,
printouts, computer disks, computer tapes, source codes, data, tables or
calculations and all copies thereof, documents that in whole or in part contain
any trade secrets or confidential, proprietary or other secret information of
the Company or any of the Affiliates and all copies thereof, and keys, access
cards, access codes, passwords, credit cards, personal computers, telephones and
other electronic equipment belonging to the Company or any of the Affiliates.
12. REMEDIES.
(a) REMEDIES. Executive acknowledges that it would be difficult to
fully compensate the Company for monetary damages resulting from any breach by
him of the provisions of Sections 5, 7 and 8 hereof. Accordingly, in the event
of any actual or threatened breach of any such provisions, the Company shall, in
addition to any other remedies it may have, be entitled to injunctive and other
equitable relief to enforce such provisions, and such relief may be granted
without the necessity of proving actual monetary damages.
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(b) ARBITRATION. Except for disputes arising under Sections 5, 7 or 8
hereof, all disputes involving the interpretation, construction, application or
alleged breach of this Agreement and all disputes relating to the termination of
Executive's employment with the Company shall be submitted to final and binding
arbitration in Minneapolis, Minnesota. The arbitrator shall be selected and the
arbitration shall be conducted pursuant to the then most recent Employment
Dispute Resolution Rules of the American Arbitration Association. The decision
of the arbitrator shall be final and binding, and any court of competent
jurisdiction may enter judgment upon the award. All fees and expenses of the
arbitrator shall be shared equally by Executive and the Company. The arbitrator
shall have jurisdiction and authority to interpret and apply the provisions of
this Agreement and relevant federal, state and local laws, rules and regulations
insofar as necessary to the determination of the dispute and to remedy any
breaches of the Agreement and/or violations of applicable laws, but shall not
have jurisdiction or authority to award punitive damages or alter in any way the
provisions of this Agreement. The arbitrator shall have the authority to award
attorneys' fees and costs to the prevailing party. The parties hereby agree that
this arbitration provision shall be in lieu of any requirement that either party
exhaust such party's administrative remedies under federal, state or local law.
13. MISCELLANEOUS.
(a) GOVERNING LAW. All matters relating to the interpretation,
construction, application, validity and enforcement of this Agreement shall be
governed by the laws of the State of Minnesota without giving effect to any
choice or conflict of law provision or rule, whether of the State of Minnesota
or any other jurisdiction, that would cause the application of laws of any
jurisdiction other than the State of Minnesota.
(b) ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties relating to the subject matter of this Agreement and supersedes all
prior agreements and understandings with respect to such subject matter, and the
parties hereto have made no agreements, representations or warranties relating
to the subject matter of this Agreement that are not set forth herein.
(c) AMENDMENTS. No amendment or modification of this Agreement shall
be deemed effective unless made in writing and signed by the parties hereto.
(d) NO WAIVER. No term or condition of this Agreement shall be deemed
to have been waived, except by a statement in writing signed by the party
against whom enforcement of the waiver is sought. Any written waiver shall not
be deemed a continuing waiver unless specifically stated, shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.
(e) ASSIGNMENT. This Agreement shall not be assignable, in whole or
in part, by either party without the written consent of the other party, except
that the Company may, without the consent of Executive, assign its rights and
obligations under this Agreement to any corporation or other business entity (i)
with which the Company may merge or consolidate, (ii) to
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which the Company may sell or transfer all or substantially all of its assets or
capital stock, or (iii) of which 50% or more of the capital stock or the voting
control is owned, directly or indirectly, by the Company. After any such
assignment by the Company, the Company shall be discharged from all further
liability hereunder and such assignee shall thereafter be deemed to be the
"Company" for purposes of all terms and conditions of this Agreement, including
this Section 13.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and such counterparts executed and delivered, each as an original,
shall constitute but one and the same instrument.
(g) SEVERABILITY. Subject to Section 7(e) hereof, to the extent that
any portion of any provision of this Agreement shall be invalid or
unenforceable, it shall be considered deleted herefrom and the remainder of such
provision and of this Agreement shall be unaffected and shall continue in full
force and effect.
(h) CAPTIONS AND HEADINGS. The captions and paragraph headings used
in this Agreement are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
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IN WITNESS WHEREOF, Executive and the Company have executed this
Agreement as of the date set forth in the first paragraph.
WOODCRAFT INDUSTRIES, INC.
By: /S/ Xxxx Xxxxxxxxxxx
---------------------------
Xxxx Xxxxxxxxxxx, President
and Chief Executive Officer
/S/ Xxxx Xxxx
-------------------------------
Xxxx Xxxx
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EXHIBIT A
INCENTIVE COMPENSATION
For each fiscal year of the Company beginning after December 31, 2002,
Executive shall earn, as incentive compensation, a percentage of his base
salary, up to a maximum of 70%. The incentive compensation will be determined on
the basis of EBITDA of the Company. Incentive compensation shall be determined
as follows:
A. For each percentage point (rounded up or down to the nearest whole
number) that the Company's EBITDA is greater than 85% of the Company's
projected aggregate EBITDA, up to and including 100%, Executive shall
earn the product of 2.333% of his base salary not to exceed 35%; and
B. For each percentage point (rounded up or down to the nearest whole
number) that the Company's EBITDA is greater than 100% of the
Company's projected aggregate EBITDA, up to and including 125%,
Executive shall earn 1.4% of his base salary not to exceed 35%.
All calculations that are required to determine the amount of Executive's
incentive compensation for a fiscal year shall be calculated as of December 31.
The Company shall pay Executive the amount of incentive compensation that he has
earned for a fiscal year, if any, within 75 days after the end of the year.
For purposes of determining Executive's incentive compensation, the terms
used in the Exhibit A have the following meanings:
"Base Salary" shall mean the total base salary paid to Executive in
accordance with Section 4.a of this Agreement during the applicable full fiscal
year.
"Projected Aggregate EBITDA" shall mean, for any year, the amount proposed
by management and approved by the Company's Board of Directors in the Company's
annual plan for a fiscal year as the Company's projected EBITDA.
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