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Exhibit 10.10
EMPLOYMENT AGREEMENT
AGREEMENT by and between APCOA, Inc., a Delaware corporation (the
"Company"), and Xxxx Xxxxxxxx (the "Executive"), dated as of the 14 day of May,
1998.
WHEREAS, pursuant to that certain Combination Agreement (the "Transaction
Agreement") dated as of January 15, 1998, by and among Xxxxx X. Xxxxxxxxx,
Xxxxxxx Xxxxxxxxx, Xxxxxx X. Xxxxxxxxx, Xxxxxx Partners, L.P., SP Parking
Associates and the Company, the operations of the Company and Standard Parking,
L.P. were combined (the "Transaction"); and
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its shareholders
to ensure that the Company will continue to receive the benefit of the
Executive's services after the Transaction, on the terms and conditions set
forth below in this Agreement, and the Executive desires to serve the Company
in accordance with such terms and conditions;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. The Company shall employ the Executive, and the
Executive shall serve the Company, on the terms and conditions set forth in
this Agreement, for the period beginning on March 30, 1998 (the "Effective
Date") and ending on the third anniversary thereof (the "Employment Period");
provided, however, that commencing on the third anniversary of the Effective
Date and thereafter on each annual anniversary of such date (each annual
anniversary thereof shall hereinafter be referred to as the "Renewal Date"),
unless previously terminated, the Employment Period shall be automatically
extended so as to terminate two years from the Renewal Date, unless 180 days
prior to the Renewal Date the Company or the Executive shall terminate this
Agreement by giving notice to the other party that the Employment Period shall
not be so extended (a "Notice of Nonrenewal").
2. Position and Duties. During the Employment Period, the Executive
shall serve as Executive Vice President, Midwest Operations of the Company,
with the duties, authority and responsibilities as are commensurate with such
position and as are customarily associated with such position and shall perform
such other duties as may be assigned to the Executive from time to time. During
the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive shall devote full attention and
time during normal business hours to the business and affairs of the Company
and, to the extent necessary to discharge the responsibilities assigned to the
Executive under this Agreement, use the Executive's reasonable best efforts to
carry out such responsibilities faithfully and efficiently. The Executive shall
not, during the term of this Agreement, engage in any other business activities
that will interfere with the Executive's employment pursuant to this Agreement.
During the Employment Period, the Executive's services shall be performed
primarily in Chicago, Illinois.
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3. Compensation. (a) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary of $175,000 (the "Annual Base
Salary"), payable in accordance with the Company's normal payroll practices for
executives as in effect from time to time. Such Annual Base Salary shall be
subject to review annually in accordance with the Company's review policies and
practices for executives as in effect at the time of any such review.
(b) Bonus. For each calendar year ending during the Employment Period,
the Executive shall be eligible to receive an annual bonus (the "Annual
Bonus"), based upon the terms and conditions of an annual bonus program to be
established by the Company. Any such annual bonus program shall provide that
the Executive's target bonus ("Target Annual Bonus") will be 40% of the Annual
Base Salary, with the actual amount of the Annual Bonus determined in
accordance with the terms of the annual bonus program. Notwithstanding the
foregoing sentence, for the 1998 fiscal year, the Executive's Annual Bonus
shall not be less than 40% of the Annual Base Salary.
(c) Equity Plan. During the 1998 calendar year, the Company shall adopt
an equity incentive plan or program (the "Equity Plan") in which certain of the
Company's key executives will be eligible to participate. During the Employment
Period, the Executive shall be entitled to participate in the Equity Plan from
and after the effective date thereof, in accordance with the terms and
conditions of such plan and on the same basis as peer executives.
(d) Housing Differential Loan. Following the Effective Date and
contingent upon the Executive's execution of a promissory note (substantially
in the form attached hereto as Exhibit A), the Executive shall receive a
$250,000 loan from the Company with a term of three years (the "Loan"), which
shall bear interest at the Applicable Federal Rate compounded annually. The
principal shall be disbursed to the Executive upon his submission of a written
purchase offer for a residence in the vicinity of Chicago, Illinois. The
principal amount of the Loan and the interest thereon shall be payable in cash
on an annual basis in three equal installments, on each of the first, second
and third anniversaries of the Effective Date of the Agreement (each such
anniversary referred to herein as an "Annual Payment Date"); provided, however,
that if the Executive remains in the continual employment of the Company as of
each Annual Payment Date, one-third of the principal balance of the initial
Loan and the accrued interest thereon (as of such Annual Payment Date) shall be
forgiven by the Company, and such forgiven amount shall be treated as
additional compensation to the Executive in the year of such forgiveness. Prior
to the end of any calendar year in which the Company forgives a portion of the
Loan, the Company shall make the Executive whole for the federal, state and
local income tax consequences of such forgiveness.
In the event the Executive's employment hereunder is terminated for Cause
(as hereinafter defined) or the Executive terminates his employment without
Good Reason (as hereinafter defined), the Executive shall be obligated to repay
the remaining principal balance of the Loan and any accrued and unpaid interest
thereon within thirty (30) days of the Date of Termination; provided, however,
that if the Date of Termination does not coincide with an Annual Payment Date,
the repayment of the principal balance of the Loan and the accrued
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interest thereon for the year of termination shall be pro-rated in respect of
the portion of such short-year that commences on the date of the Date of
Termination and ends on the next following Annual Payment Date, and the portion
of the pro-rated principal balance of the Loan and the interest thereon with
respect to the period commencing on the Annual Payment Date prior to the Date
of Termination and ending on the Date of Termination shall be forgiven, and the
Company shall, prior to the end of the calendar year in which the Date of
Termination occurs, make the Executive whole for any federal, state and local
income tax consequences to the Executive with respect to such forgiven amount.
In the event the Executive's employment hereunder is terminated by the Company
for any reason other than for Cause, including a termination on account of
death or Disability, or in the event the Executive terminates his employment
for Good Reason, the remaining principal balance of the Loan and any accrued
and unpaid interest thereon shall be forgiven, and prior to the end of the
calendar year in which such forgiveness occurs, the Company shall make the
Executive whole for any federal, state and local income tax consequences to the
Executive with respect to such forgiven amount.
(e) Other Benefits. In addition to the foregoing, during the Employment
Period: (i) the Executive shall be entitled to participate in savings,
retirement, and fringe benefit plans, practices, policies and programs of the
Company as in effect from time to time, on the same terms and conditions as
those applicable to peer executives; (ii) the Executive shall be entitled to
four weeks of annual vacation, to be taken in accordance with the Company's
vacation policy as in effect from time to time; (iii) the Executive shall be
entitled to participate in an automobile program in accordance with the terms
and conditions of the Company's automobile program as may be in effect from
time to time; and (iv) the Executive and the Executive's family shall be
eligible for participation in, and shall receive all benefits under medical,
disability and other welfare benefit plans, practices, policies and programs
provided by the Company, as in effect from time to time, on the same terms and
conditions as those applicable to peer executives, provided, that the
Executive's benefits under this Agreement shall be substantially similar in the
aggregate to the benefits available to him and his family under the Executive
Employment Agreement between the Company and the Executive, dated December 11,
1995.
(f) The Company shall provide the Supplemental Pension Plan, as described
in Exhibit C of the Executive Employment Agreement between the Company and the
Executive, dated December 11, 1995, which Exhibit is attached to and
incorporated herein.
4. Termination of Employment. (a) Death or Disability. In the event of
the Executive's death during the Employment Period, the Executive's employment
with the Company shall terminate automatically. The Company, in its
discretion, shall have the right to terminate the Executive's employment
because of the Executive's Disability during the Employment Period. For
purposes of this Agreement, "Disability" shall mean the absence of the
Executive from the Executive's duties with the Company on a full-time basis for
180 consecutive business days, or for periods aggregating 180 business days in
any period of twelve months, as a result of incapacity due to mental or
physical illness or injury which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Executive or the Executive's legal representative. A termination of the
Executive's employment by the Company for Disability shall be communicated to
the Executive by written notice, and
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shall be effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), unless the Executive returns to
full-time performance of the Executive's duties before the Disability Effective
Date.
(b) By the Company. In addition to termination for Disability, the
Company may terminate the Executive's employment during the Employment Period
for Cause or without Cause. For purposes of this Agreement, "Cause" means:
(i) the continued and willful or deliberate failure of the Executive
substantially to perform the Executive's duties under this Agreement (other
than as a result of physical or mental illness or injury); or
(ii) illegal conduct or gross misconduct by the Executive, in either
case that is willful and results in material damage to the business or
reputation of the Company or its affiliated companies; or
(iii) the breach of a fiduciary duty owed to the Company or its
affiliated companies, including, without limitation, a failure to comply
with Section 6 hereof.
Upon the occurrence of events constituting Cause as defined in subsection (i)
of this paragraph (b), the Company shall give the Executive advance notice of
any such termination for Cause and shall provide the Executive with a
reasonable opportunity to cure.
(c) By the Executive. The Executive may voluntarily terminate his
employment by giving written notice thereof to the Company. The Executive may
terminate his employment during the Employment Period for Good Reason. For
purposes of this Agreement, "Good Reason" means:
(i) a reduction in the Executive's Annual Base Salary; or
(ii) any change in the Executive's duties and responsibilities that
requires him to relocate his residence outside of the Chicago, Illinois
vicinity.
A termination of employment by the Executive for Good Reason shall be
effectuated by giving the Company written notice ("Notice of Termination for
Good Reason") of the termination, setting forth in reasonable detail the
specific conduct of the Company that constitutes Good Reason and the specific
provision(s) of this Agreement on which the Executive relies. A termination of
employment by the Executive for Good Reason shall be effective on the date when
the Notice of Termination for Good Reason is given, unless the notice sets
forth a later date (which date shall in no event be later than thirty (30) days
after the notice is given).
(d) Date of Termination. The "Date of Termination" means the date of
the Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company (for Cause or other
than for Cause or Disability), as set forth in the notice from the Company, is
effective, or the date on which the Executive gives the
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Company notice of a termination of employment for Good Reason (unless otherwise
stated in the Notice of Termination for Good Reason) or without Good Reason, as
the case may be.
5. Obligations of the Company upon Termination. (a) By the Company Other
Than for Cause or Disability; By the Executive for Good Reason. If, during the
Employment Period, the Company terminates the Executive's employment, other
than for Cause or Disability, but excluding any termination of employment at
the end of the Employment Period (whether or not as a result of a Notice of
Nonrenewal by the Company), or the Executive terminates employment for Good
Reason, the Company shall, for the remainder of the Employment Period as in
effect immediately before the Date of Termination, continue to pay the
Executive the Annual Base Salary and the Annual Bonus through the end of the
then-current Employment Period, as and when such amounts would be paid in
accordance with Sections 3(a) and (b) above, provided that the amount of any
Annual Bonus(es) so paid shall equal the Target Annual Bonus. The Company shall
also continue to provide for the same period welfare benefits to the Executive
and the Executive's family, at least as favorable as those that would have been
provided to them under clause (e)(iv) of Section 3 of this Agreement if the
Executive's employment had continued until the end of the Employment Period,
provided, that during any period when the Executive is eligible to receive such
benefits under another employer-provided plan, the benefits provided by the
Company under this Section 5(a) may be made secondary to those provided under
such other plan. The payments provided pursuant to this Section 5(a) are
intended as liquidated damages for a termination of the Executive's employment
by the Company other than for Cause or Disability, or by the Executive for Good
Reason, and shall be the sole and exclusive remedy therefor.
(b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, the Company shall make, within
thirty (30) days after the Date of Termination, a lump-sum cash payment to the
Executive's estate equal to the sum of (i) the Executive's Annual Base Salary
through the end of the calendar month in which death occurs, (ii) any earned
and unpaid Annual Bonus for any calendar year ended prior to the Date of
Termination, (iii) any accrued but unpaid vacation pay and (iv) any other
vested benefits to which the Executive is entitled, in each case to the extent
not yet paid.
(c) Disability. In the event the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period in accordance
with Section 4(a) hereof, the Company shall pay to the Executive or the
Executive's legal representative, as applicable, (i) the Executive's Annual
Base Salary for the duration of the Employment Period in effect immediately
before the Date of Termination, provided that any such payments made to the
Executive shall be reduced by the sum of the amounts, if any, payable to the
Executive under any disability benefit plans of the Company or under the Social
Security disability insurance program, (ii) any earned and unpaid Annual Bonus
for any calendar year ended prior to the Date of Termination and (iii) any
other vested benefits to which the Executive is entitled, in each case to the
extent not yet paid.
(d) Cause; Voluntary Termination. If the Executive's employment is
terminated by the Company for Cause or the Executive voluntarily terminates his
employment during the
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Employment Period, the Company shall pay the Executive (i) the Annual Base
Salary through the Date of Termination and (ii) any other vested benefits to
which the Executive is entitled, in each case to the extent not yet paid, and
the Company shall have no further obligations to the Executive under this
Agreement.
6. Confidential Information; Noncompetition. (a) The Executive shall
hold in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or any of
its affiliated companies and their respective businesses that the Executive
obtains or obtained during the Executive's employment by the Company or any of
its affiliated companies and their respective businesses and that is not public
knowledge (other than as a result of the Executive's violation of this
paragraph (a) of Section 6) ("Confidential Information"). The Executive shall
not communicate, divulge or disseminate Confidential Information at any time
during or after the Executive's employment with the Company, except with the
prior written consent of the Company or as otherwise required by law or legal
process. As used in this Agreement, the term "affiliated companies" shall
include any company controlled by, controlling or under common control with the
Company.
(b) During the Noncompetition Period (as defined below), the Executive
shall not, without the prior written consent of the Chief Executive Officer of
the Company, engage in or become associated with a Competitive Activity. For
purposes of this paragraph (b) of Section 6, the following terms shall have the
following meanings: (i) the "Noncompetition Period" means the period during
which the Executive is employed by the Company and the one-year period
following the termination of the Executive's employment by the Company for any
reason; (ii) a "Competitive Activity" means any business or other endeavor that
engages in the operation and management of open air parking lots and indoor
garages and ramps for the purpose of parking motor vehicles on a leasehold,
license, concession or management fee basis in any county of any state in the
United States in which the Company or any of its affiliated companies is then
conducting, or is in the process of developing prospects to conduct, business;
(iii) the Executive shall be considered to have become "associated with a
Competitive Activity" if he becomes directly or indirectly involved as an
owner, employee, officer, director, independent contractor, agent, partner,
advisor, or in any other capacity calling for the rendition of the Executive's
personal services, with any individual, partnership, corporation or other
organization that is engaged in a Competitive Activity. Notwithstanding the
foregoing, the Executive may make and retain investments during the
Noncompetition Period in not more than five percent of the equity of any entity
engaged in a Competitive Activity, if such equity is listed on a national
securities exchange or regularly traded in an over-the-counter market.
(c) In the event of a breach or threatened breach of this Section 6, the
Executive agrees that the Company shall be entitled to injunctive relief in a
court of appropriate jurisdiction to remedy any such breach or threatened
breach, and the Executive acknowledges that damages would be inadequate and
insufficient.
(d) Any termination of the Executive's employment or of this Agreement
shall have no effect on the continuing operation of this Section 6.
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7. Successors. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
both the Company as defined above and any such successor that assumes and
agrees to perform this Agreement, by operation of law or otherwise.
8. Miscellaneous. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written agreement executed
by the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications under this Agreement shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
If to the Company: APCOA, Inc.
Attention:
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 8. Notices and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. If any provision of this Agreement shall be held
invalid or unenforceable in part, the remaining portion of such provision,
together with all other provisions of this Agreement, shall remain valid and
enforceable and continue in full force and effect to the fullest extent
consistent with law.
(d) Notwithstanding any other provision of this Agreement, the Company
may withhold from amounts payable under this Agreement all federal, state,
local and foreign taxes that are required to be withheld by applicable laws or
regulations.
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(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.
(f) The Executive and the Company acknowledge that this Agreement
supersedes any other agreement, whether written or oral, between them
concerning the subject matter hereof, including, but not limited to, the
summary of Employment Terms and the Executive Employment Agreement dated as of
December 11, 1995.
(g) This Agreement may be executed in several counterparts, each of which
shall be deemed an original, and said counterparts shall constitute but one and
the same instrument.
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization of its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ XXXX XXXXXXXX
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XXXX XXXXXXXX
APCOA, INC.
/s/ X. XXXXXX STUEPLE, JR.
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Name: X. Xxxxxx Stueple, Jr.
Title: President
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