Exhibit 10.19
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of January 1, 2001, by and between Atrium Corporation (f/k/a D and W
Holdings, Inc.), a Delaware corporation (together with its successors and
assigns permitted hereunder, the "Company"), Atrium Companies, Inc., a Delaware
corporation ("ACI"), and Xxxx X. Xxxx (the "Employee").
RECITALS
A. The Company and the Employee entered into an Employment Agreement
dated as of January 1, 1998 (the "January 1, 1998 Agreement").
B. The Board of Directors of the Company (the "Board") determined that
it is in the best interest of the Company and its stockholders to renew the
January 1, 1998 Agreement and to enter into this Agreement for purposes of the
Company employing the Employee on the terms and conditions set forth herein.
C. ACI and its subsidiaries will benefit from the services to be
provided by the Employee hereunder.
AGREEMENTS
NOW, THEREFORE, in consideration of the respective agreements and
covenants set forth herein and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. EMPLOYMENT PERIOD. Subject to Section 3, the Company hereby agrees
to employ the Employee, and the Employee hereby agrees to be employed by the
Company in accordance with the terms and provisions of this Agreement, for a
period commencing on the date hereof and ending on the third anniversary of such
date (the "Initial Term", and including any and all renewals thereof, the
"Employment Period"); provided the Initial Term is renewable for a series of
three-year terms thereafter as mutually agreed upon by the Company and Employee
at least 30 days prior to the end of the then current term. In the event
Employee continues to perform services after the Employment Period, and pending
agreement for extension of the Employment Agreement, such services shall
constitute employment for an unspecified term, terminable at will, with or
without cause or reason, with or without advance notice, and with or without pay
in lieu of advance notice. If the Company provides the Employee with notice of
intent not to renew in accordance with the above, the Company may in its
discretion terminate Employee's services as of the date of such notice by paying
to Employee all amounts that will become due during the remainder of the
Employment Period.
2. TERMS OF EMPLOYMENT.
(a) POSITION AND DUTIES.
(i) During the term of the Employee's employment, the Employee
shall serve as Chief Financial Officer of the Company and, in so doing, shall
perform normal duties and responsibilities associated with such position,
subject to the general direction, approval and control of the Chief Executive
Officer.
(ii) During the term of the Employee's employment, and excluding
any periods of vacation and other leave to which the Employee is entitled, the
Employee agrees to devote substantially all his business time to the business
and affairs of the Company and to use the Employee's best efforts to perform
faithfully, effectively and efficiently his duties and responsibilities.
(iii) During the term of the Employee's employment, it shall not be
a violation of this Agreement for the Employee to (1) serve on industry trade,
civic or charitable boards or committees, (2) deliver lectures or fulfill
speaking engagements or (3) manage personal investments, so long as such
activities do not interfere with the performance of the Employee's duties and
responsibilities as an employee of the Company.
(iv) Employee agrees to observe and comply with the Company's rules
and policies as adopted by the Company from time to time.
(b) COMPENSATION.
(i) BASE SALARY. During the Initial Term, the Employee shall
receive an annual base salary ("Annual Base Salary"), which shall be paid in
accordance with the customary payroll practices of the Company, during the
period beginning on the date hereof and ending on December 31, 2003, in an
amount equal to $175,000 per annum. The Board, in its discretion, may at any
time increase the amount of the Annual Base Salary to such greater amount as it
may deem appropriate, and the term "Annual Base Salary," as used in this
Agreement, shall refer to the Annual Base Salary as it may be so increased.
It is understood that the Company may, at any time, in the discretion of the
Board, increase, but not decrease, the amount of the Annual Base Salary.
(ii) INCENTIVE BONUS. Employee shall be entitled to an incentive
bonus as set forth on Schedule A hereto.
(iii) INCENTIVE SAVINGS, STOCK OPTION AND RETIREMENT PLANS. During
the term of the Employee's employment, the Employee shall be entitled to
participate in all incentive, savings, stock option and retirement plans,
practices, policies and programs applicable generally to other employees of the
Company ("Investment Plans"), as amended from time to time.
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(iv) WELFARE BENEFIT PLANS. During the term of the Employee's
employment, the Employee and/or the Employee's family, as the case may be, shall
be eligible for participation in and shall receive all benefits under the
welfare benefit plans, practices, policies and programs ("Welfare Plans")
provided by the Company (including medical, prescription, dental, disability,
salary continuance, employee life, group life, accidental death and travel
accident insurance plans and programs), as amended from time to time, to the
extent applicable generally to other employees of the Company.
(v) PERQUISITES. During the term of the Employee's employment, the
Employee shall be entitled to receive (in addition to the benefits described
above) such perquisites and fringe benefits appertaining to his position in
accordance with any policies, practices and procedures established by the Board,
as amended from time to time.
(vi) EXPENSES. During the term of the Employee's employment, the
Employee shall be entitled to receive prompt reimbursement for all reasonable
employment expenses incurred by the Employee in accordance with the Company's
policies, practices and procedures, as amended from time to time.
(vii) AUTOMOBILE. The Company recognizes the Employee's need for an
automobile for business purposes. The Company shall provide the Employee with an
automobile allowance of $850 per month, which amount shall be grossed up for
income taxes, as applicable, plus reasonable related expenses for maintenance,
fuel and insurance.
(viii) VACATION. During the term of the Employee's employment, the
Employee shall be entitled to four (4) weeks paid vacation each calendar year.
Any vacation shall be taken at the reasonable and mutual convenience of the
Company and the Employee. Accrued vacation not taken in any calendar year will
not be carried forward or used in any subsequent calendar year and the Employee
shall not be entitled to receive pay in lieu of accrued but unused vacation in
any calendar year. Vacation will be deemed to accrue daily for purposes of the
payments described in Section 4 hereof.
(ix) STOCK OPTIONS. Upon the effective date of this Agreement, the
Employee will be entitled to the stock options described on Schedule B hereto.
(c) KEY-MAN INSURANCE. At any time during the Employment Period, the
Company shall have the right to insure the life of the Employee for the
Company's sole benefit, and to determine the amount of insurance and the type of
policy. The Employee shall cooperate with the Company in taking out such
insurance by submitting to physical examinations, by supplying all information
required by the insurance company, and by executing all necessary documents. The
Employee shall incur no financial obligation by executing any required document,
and shall have no interest in any such policy.
3. TERMINATION OF EMPLOYMENT.
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(a) DEATH OR DISABILITY. The Employee's employment shall terminate
automatically upon the Employee's death during the Employment Period. If the
Disability (as defined below) of the Employee has occurred during the Employment
Period, the Company may give to the Employee written notice in accordance with
Section 13(b) of its intention to terminate the Employee's employment. In such
event, the Employee's employment with the Company shall terminate effective on
the 30th day after receipt of such notice by the Employee (the "Disability
Effective Date"), if, within the 30 days after such receipt, the Employee shall
not have returned to perform, with or without reasonable accommodation, the
essential functions of his position. For purposes of this Agreement,
"Disability" shall mean the Employee's inability to perform, with or without
reasonable accommodations, the essential functions of his position hereunder for
a period of 120 days, consecutive or non-consecutive, in any 12-month period due
to mental or physical incapacity, as determined by a physician selected by the
Company or its insurers and acceptable to the Employee or the Employee's legal
representative, such agreement as to acceptability not to be unreasonably
withheld or delayed. Any refusal by Employee to submit to a medical examination
for the purpose of determining Disability under this Section 3(a) shall be
deemed to constitute conclusive evidence of Employee's Disability. Nothing in
this Agreement shall be construed as a waiver of Employee's rights under the
Americans with Disabilities Act or any other applicable law or statute relating
to disabilities or handicaps.
(b) CAUSE OR WITHOUT CAUSE. The Company may terminate the Employee's
employment during the Employment Period for Cause or without Cause. For purposes
of this Agreement, "Cause" shall mean (i) a breach by the Employee of the
Employee's obligations under Section 2(a) (other than as a result of physical or
mental incapacity) which constitutes a continued material nonperformance by the
Employee of his obligations and duties thereunder, and which is not remedied
within 30 days after receipt of written notice from the Company specifying such
breach, (ii) commission by the Employee of an act of fraud, embezzlement,
misappropriation, willful misconduct or breach of fiduciary duty against the
Company; (iii) a material breach by the Employee of Sections 7, 8, 10 or 11;
(iv) the Employee's conviction, plea of no contest or nolo contendere, or
unadjudicated probation for any felony or crime involving moral turpitude; (v)
the failure of the Employee to carry out, or comply with, in any material
respect any lawful and reasonable directive of the Board consistent with the
terms of this Agreement, which is not remedied within 30 days after receipt of
written notice from the Company specifying such failure; or (vi) the Employee's
unlawful use (including being under the influence) or possession of illegal
drugs on the Company's premises or while performing the Employee's duties and
responsibilities under this Agreement. For purposes of this Agreement, "without
Cause" shall mean a termination by the Company of the Employee's employment
during the Employment Period for any reason other than a termination based upon
Cause, death, Disability or upon a Change of Control, as defined below.
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(c) GOOD REASON. The Employee's employment may be terminated during the
Employment Period by the Employee for Good Reason or without Good Reason;
provided, however, that the Employee agrees not to terminate his employment for
Good Reason unless (i) the Employee has given the Company at least 30 days'
prior written notice of his intent to terminate his employment for Good Reason,
which notice shall specify the facts and circumstances constituting Good Reason,
and (ii) the Company has not remedied such facts and circumstances constituting
Good Reason within such 30-day period. For purposes of this Agreement, "Good
Reason" shall mean:
(i) any significant reduction, approved by the Board without the
Employee's consent in the Employee's position, authority, duties or
responsibilities as contemplated in Section 2(a) or any other action by the
Company which results in a material diminution in such position, authority,
duties or responsibilities, excluding for this purpose an inadvertent action not
taken in bad faith and which is remedied by the Company promptly after receipt
of written notice thereof given by the Employee;
(ii) any termination or material reduction of a material benefit
under any Investment Plan or Welfare Plan in which the Employee participates
unless (A) there is substituted a comparable benefit that is economically
substantially equivalent to the terminated or reduced benefit prior to such
termination or reduction or (B) benefits under such Investment Plan or Welfare
Plan are terminated or reduced with respect to all employees previously granted
benefits thereunder;
(iii) any failure by the Company to comply with any of the
provisions of Section 2(b), other than an inadvertent failure not occurring in
bad faith and which is remedied by the Company promptly after receipt of written
notice thereof given by the Employee; or
(iv) without limiting the generality of the foregoing, any material
breach by the Company or any of its subsidiaries or other affiliates (as defined
below) of (A) this Agreement or (B) any other agreement between the Employee and
the Company or any such subsidiary or other affiliate.
As used in this Agreement, "affiliate" means, with respect to a person,
any other person controlling, controlled by or under common control with the
first person; the term "control," and correlative terms, means the power,
whether by contract, equity ownership or otherwise, to direct the policies or
management of a person; and "person" means an individual, partnership,
corporation, limited liability company, trust or unincorporated organization, or
a government or agency or political subdivision thereof.
(d) CHANGE OF CONTROL. If a Change of Control (as defined below) occurs
during the Employment Period and the Board determines in good faith that it is
in the Company's best interest to terminate the Employee's employment with the
Company, within one year of such Change of Control the Company may terminate the
Employee's employment by giving the Employee written notice in accordance with
Section 13(b) of
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its intention to terminate the Employee's employment. Any such termination by
the Company as contemplated in this Section 3(d) is referred to herein as a
termination "upon a Change of Control."
As used in this Agreement, "Change of Control" means the first to occur
of: (i) any sale, lease, exchange or other transfer of all or substantially all
of the assets of the Company (including capital stock or assets of operating
subsidiaries) to any person or group of persons, (ii) a majority of the Board of
Directors of the Company shall consist of persons who are not nominated
collectively by Ardshiel, Inc. and its affiliates and GE Investment Private
Placement Partners II, a Limited Partnership or (iii) the acquisition by any
person or group (other than Ardshiel, Inc., GE Investment Private Placement
Partners II, a Limited Partnership and their affiliates) of the power to vote or
direct the voting of securities having more than 50% of the ordinary voting
power for the election of directors of the Company.
(e) NOTICE OF TERMINATION. Any termination by the Company for Cause or
without Cause or upon a Change of Control, or by the Employee for Good Reason or
without Good Reason, shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 13(b). For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employee's employment under
the provision so indicated and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the
termination date (which date shall not be more than 15 days after the giving of
such notice). The failure by the Employee or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason or Cause or a termination upon a Change of Control shall not waive
any right of the Employee or the Company hereunder or preclude the Employee or
the Company from asserting such fact or circumstance in enforcing the Employee's
or the Company's rights hereunder.
(f) DATE OF TERMINATION. "Date of Termination" means (i) if the
Employee's employment is terminated by the Company for Cause or upon a Change of
Control, or by the Employee for Good Reason or without Good Reason, the date of
receipt of the Notice of Termination or any later date specified therein
pursuant to Section 3(e), as the case may be, (ii) if the Employee's employment
is terminated by the Company other than for Cause or upon a Change of Control,
the date on which the Company notifies the Employee of such termination and
(iii) if the Employee's employment is terminated by reason of death or
Disability, the date of death of the Employee or the Disability Effective Date,
as the case may be.
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4. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) FOR CAUSE; WITHOUT GOOD REASON; OTHER THAN FOR DEATH,
DISABILITY OR UPON A CHANGE OF CONTROL. If, during the Employment Period, the
Company shall terminate the Employee's employment for Cause or the Employee
shall terminate his employment without Good Reason, and the termination of the
Employee's employment in any case is not due to his death or Disability or upon
a Change of Control, the Employee shall forfeit all rights to the Incentive
Bonus otherwise due to him or to which he may be entitled, all unexercised stock
options held by Employee shall lapse and expire, and the Company shall have no
further payment obligations to the Employee or his legal representatives, other
than for the payment of: (i) in a lump sum in cash within ten (10) days after
the Date of Termination the sum of the Employee's Annual Base Salary through the
Date of Termination to the extent not theretofore paid, any compensation
previously deferred by the Employee (together with any accrued interest or
earnings thereon) and any accrued vacation pay (collectively, the "Accrued
Obligations"); and (ii) any amount arising from the Employee's participation in,
or benefits under, any Investment Plans (the "Accrued Investments"), which
amounts shall be payable in accordance with the terms and conditions of such
Investment Plans.
(b) DEATH. If the Employee's employment is terminated by reason of
the Employee's death during the Employment Period, all unexercised stock options
held by Employee shall immediately vest (in his legal representatives) and
become exercisable and the Company shall have no further payment obligations to
the Employee or his legal representatives, other than for payment of: (i) in a
lump sum in cash within ten (10) days after the Date of Termination the Accrued
Obligations; (ii) the Accrued Investments, which shall be payable in accordance
with the terms and conditions of the Investment Plans; and (iii) the Incentive
Bonus prorated from the first day of the Company's then current fiscal year to
the Date of Termination (the "Prorated Incentive Bonus"), payable following
calculation of the Incentive Bonus in accordance with Section 2(b)(ii) hereof.
(c) DISABILITY. If the Employee's employment is terminated by
reason of the Employee's Disability during the Employment Period, all
unexercised stock options held by Employee shall immediately vest and become
exercisable and the Company shall have no further payment obligations to the
Employee or his legal representatives, other than for payment of: (i) in a lump
sum in cash within ten (10) days after the Date of Termination the Accrued
Obligations; (ii) the Accrued Investments, which shall be payable in accordance
with the terms and conditions of the Investment Plans; and (iii) the Prorated
Incentive Bonus, payable following calculation of the Incentive Bonus in
accordance with Section 2(b)(ii) hereof.
(d) WITHOUT CAUSE OR FOR GOOD REASON. If the Employee's employment
is terminated by the Company without Cause or by the Employee for Good Reason,
all, unvested stock options held by Employee (the "Unvested Options") shall
immediately vest and become exercisable for a period of thirty (30) days from
the Date of Termination
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(the "Exercise Period") and the Company shall have no further payment
obligations to the Employee or his legal representatives, other than for: (i)
payment of, in a lump sum in cash within ten (10) days after the Date of
Termination, the Accrued Obligations; (ii) payment of the Accrued Investments,
which, except with respect to the Unvested Options, shall be payable in
accordance with the terms and conditions of the Investment Plans; (iii) payment
of the Prorated Incentive Bonus, payable following calculation of the Incentive
Bonus in accordance with Section 2(b)(ii) hereof; and (iv) payment for each
month during a period of 12 months following the Date of Termination (the
"Severance Period") of one-twelfth of the sum of the Employee's Annual Base
Salary on the Date of Termination, in accordance with the customary payroll
practices of the Company. All Unvested Options which remain unexercised at the
end of the Exercise Period shall lapse and expire.
(e) CHANGE OF CONTROL. If the Employee's employment is terminated
upon a Change of Control as contemplated in Section 3(d), all unexercised stock
options held by Employee shall immediately vest and become exercisable and the
Company shall have no further payment obligations to the Employee or his legal
representatives, other than for (i) payment of, in a lump sum in cash within ten
(10) days after the Date of Termination, the Accrued Obligations; (ii) payment
of the Accrued Investments, which shall be payable in accordance with the terms
and conditions of the Investment Plans; (iii) payment of the Prorated Incentive
Bonus; and (iv) payment for each month during the Severance Period of
one-twelfth of the sum of the Employee's Annual Base Salary on the Date of
Termination, in accordance with the customary payroll practices of the Company.
5. RETENTION BONUS. Following a "Change of Control," as contemplated in
Section 3(d), if the Employee is employed by the Company on the 12-month
anniversary of the Change of Control, the Company shall pay the Employee a
retention bonus in an amount equal to $75,000. Nothing in this Section 5 shall
be deemed to give the Employee the right to be retained in the employ of the
Company or to restrict the right of the Company to terminate the Employee at any
time and for any reason, without Cause or for Cause or upon a Change of Control.
Nothing in this Section 5 shall be deemed to give the Company the right to
require the Employee to remain in the employ of the Company or to restrict the
Employee's right to terminate his employment at any time and for any reason,
without Good Reason or for Good Reason.
6. FULL SETTLEMENT; MITIGATION. In no event shall the Employee be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Employee under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the Employee
obtains other employment. Neither the Employee nor the Company shall be liable
to the other party for any damages in addition to the amounts payable under
Section 4 arising out of the termination of the Employee's employment prior to
the end of the Employment Period; provided, however, that the Company shall be
entitled to seek damages from the Employee for any breach of Sections
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7, 8, 9, 10, or 11 by the Employee and either party shall be entitled to seek
damages for criminal misconduct.
7. CONFIDENTIAL INFORMATION.
(a) The Employee acknowledges that the Company and its affiliates
have trade, business and financial secrets and other confidential and
proprietary information (collectively, the "Confidential Information").
"Confidential Information" includes sales materials, technical information,
processes and compilations of information, records, specifications and
information concerning customers or vendors, manuals relating to suppliers'
products, customer lists, information regarding methods of doing business, and
the identity of suppliers. "Confidential Information" shall not include (i)
information that is generally known to other persons or entities who can obtain
economic value from its disclosure or use and (ii) information required to be
disclosed by the Employee pursuant to a subpoena or court order, or pursuant to
a requirement of a governmental agency or law of the United States of America
or a state thereof or any governmental or political subdivision; PROVIDED,
HOWEVER, that the Employee shall take all reasonable steps to prohibit
disclosure pursuant to subsection (ii) above.
(b) During and following the Employee's employment by the Company,
the Employee shall hold in confidence and not directly or indirectly disclose or
use or copy or make lists of any Confidential Information or proprietary data of
the Company or its affiliates except to the extent authorized in writing by the
Board or required by any court or administrative agency, other than to an
employee of the Company or its affiliates or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the
Employee of his duties as an employee of the Company.
(c) The Employee further agrees not to use any Confidential
Information for the benefit of any person or entity other than the Company or
its affiliates.
(d) As used in this Section 7, "Company" shall include Atrium
Corporation and any of its direct or indirect subsidiaries.
8. RESPONSIBILITIES UPON TERMINATION. Upon the termination of his
employment by the Company for whatever reason and irrespective of whether or not
such termination is voluntary on his part:
(a) The Employee shall advise the Company of the identity of his
new employer within ten (10) days after accepting new employment and further
agrees to keep the Company so advised of any change in employment during the
term of Non-Competition set forth in Section 10 hereof;
(b) The Company in its sole discretion may notify any new employer
of the Employee that he has an obligation not to compete with the Company during
such term;
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(c) The Employee shall deliver to the Company any and all records,
forms, contracts, memoranda, work papers, customer data and any other documents
which have come into his possession by reason of his employment with the Company
(including Atrium Corporation and its direct and indirect subsidiaries),
irrespective of whether or not any of said documents were prepared for him, and
he shall not retain memoranda in respect of or copies of any of said documents;
and
(d) The Employee shall participate in an exit interview with the
Company.
9. SUCCESSORS. The Company may assign its rights and obligations under
this Agreement to any successor to all or substantially all the assets of the
Company, by merger or otherwise, subject, however, to the Employee's right to
terminate this Agreement for Good Reason as provided in Section 3(c), and may
assign or encumber this Agreement and its rights hereunder as security for
indebtedness of the Company and its affiliates. All representations, warranties,
covenants, terms, conditions and provisions of this Agreement shall be binding
upon and inure to the benefit of, and be enforceable by the respective heirs,
legal representatives, successors and permitted assigns of the Company and
Employee. Neither this Agreement nor any rights, interests or obligations
hereunder may be assigned by the Employee without the prior written consent of
the Company.
10. NON-COMPETITION.
(a) The term of Non-Competition (herein so called) shall be for a
term beginning on the effective date hereof and continuing until (i) the first
anniversary of the Date of Termination if the Employee's employment is
terminated by the Company for Cause or due to Disability or by the Employee
without Good Reason, or (ii) the last day of the Severance Period if the
Employee's employment is terminated by the Company without Cause (and not due to
Disability) or upon a Change of Control or by the Employee for Good Reason.
(b) During the term of Non-Competition, the Employee shall not
(other than for the benefit of the Company or its affiliates pursuant to this
Agreement) directly or indirectly, render services to, assist, participate in
the affairs of, or otherwise be connected with, any person or enterprise (other
than the Company), which person or enterprise is engaged in, or is planning to
engage in, and shall not personally engage in, any business that is in any
respect competitive with the business of the Company, with respect to any
products of the Company that were within the Employee's management
responsibility at any time within the twelve-month period immediately prior to
the termination of the Employee's employment with the Company, in any capacity
which would (i) utilize the Employee's services with respect to such business
within any state of the United States, or any substantially comparable political
subdivision of any other country, wherein the Company sold or actively attempted
to sell, such products within the twelve-month period immediately prior to the
termination of the Employee's employment with the Company; or (ii) utilize the
Employee's services in selling any products similar
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to such products of the Company to any person or entity to which the Company
sold or actively attempted to sell such products within the twelve-month period
immediately prior to the termination of the Employee's employment with the
Company (a "Competing Business"). Notwithstanding the foregoing, the Company
agrees that the Employee may own less than five percent of the outstanding
voting securities of any publicly traded company that is a Competing Business so
long as the Employee does not otherwise participate in such Competing Business
in any way prohibited by the preceding clause.
(c) During the term of Non-Competition, Employee will not, and will
not permit any of his affiliates to, directly or indirectly, recruit or
otherwise solicit or induce any employee, customer, subscriber or supplier of
the Company to terminate its employment or arrangement with the Company,
otherwise change its relationship with the Company or establish any relationship
with the Employee or any of his affiliates for any business purpose deemed
competitive with the business of the Company.
(d) The Employee acknowledges that the geographic boundaries, scope
of prohibited activities, and time duration of the preceding paragraphs are
reasonable in nature and are no broader than are necessary to maintain the
goodwill of the Company and its affiliates and the confidentiality of their
Confidential Information, and to protect the other legitimate business interests
of the Company and its affiliates.
(e) If any court determines that any portion of this Section 10 is
invalid or unenforceable, the remainder of this Section 10 shall not thereby be
affected and shall be given full effect without regard to the invalid
provisions. If any court construes any of the provisions of this Section 10, or
any part thereof, to be unreasonable because of the duration or scope of such
provision, such court shall have the power to reduce the duration or scope of
such provision and to enforce such provision as so reduced.
(f) As used in this Section 10, "Company" shall include Atrium
Corporation and any of its direct or indirect subsidiaries.
11. INVENTIONS; ASSIGNMENT. All rights to discoveries, inventions,
improvements and innovations (including all data and records pertaining thereto)
related to the Company's business, whether or not patentable, copyrightable,
registrable as a trademark, or reduced to writing, that the Employee may
discover, invent or originate during the Employment Period, and for a period of
twelve (12) months thereafter, either alone or with others and whether or not
during working hours or by the use of the facilities of the Company
("Inventions"), shall be the exclusive property of the Company. The Employee
shall promptly disclose all Inventions to the Company, shall execute at the
request of the Company any assignments or other documents the Company may deem
necessary to protect or perfect its rights therein, and shall assist the
Company, at the Company's expense, in obtaining, defending and enforcing the
Company's rights therein. The Employee hereby appoints the Company as his
attorney-in-fact to execute on his behalf any assignments or other documents
deemed necessary by the Company to protect or perfect its rights to any
Inventions.
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12. ACI. At any time during the Employment Period, any of the
obligations of the Company to make payments hereunder, including the obligation
to pay any compensation to Employee under Section 2(b), may, at the sole
discretion of the Company, be discharged and satisfied by ACI.
13. MISCELLANEOUS.
(a) CONSTRUCTION. This Agreement shall be deemed drafted equally by
both the parties. Its language shall be construed as a whole and according to
its fair meaning. Any presumption or principle that the language is to be
construed against any party shall not apply. The headings in this Agreement are
only for convenience and are not intended to affect construction or
interpretation. Any references to paragraphs, subparagraphs, sections or
subsections are to those parts of this Agreement, unless the context clearly
indicates to the contrary. Also, unless the context clearly indicates to the
contrary, (a) the plural includes the singular and the singular includes the
plural; (b) "and" and "or" are each used both conjunctively and disjunctively;
(c) "any," "all," "each," or "every" means "any and all," and "each and every";
(d) "includes" and "including" are each "without limitation"; (e) "herein,"
"hereof," "hereunder" and other similar compounds of the word "here" refer to
the entire Agreement and not to any particular paragraph, subparagraph, section
or subsection; and (f) all pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural as the identity
of the entities or persons referred to may require.
(b) NOTICES. All notices and other communications hereunder 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 Employee: Xxxx X. Xxxx
000 Xxxxxxxxxx
Xxxxxxx, Xxxxx 00000
If to the Company: Atrium Corporation
c/o Ardshiel, Inc.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
12
with a copy to:
Xxxx X. Xxxxx
Xxxxx Xxxxxxxxxx
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) ENFORCEMENT. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a portion of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of such illegal, invalid
or unenforceable provision there shall be added automatically as part of this
Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
(d) WITHHOLDING. The Company shall be entitled to withhold from any
amounts payable under this Agreement any federal, state, local or foreign
withholding or other taxes or charges which it is from time to time required to
withhold. The Company shall be entitled to rely on an opinion of counsel if any
questions as to the amount or requirement of such withholding shall arise.
(e) NO WAIVER. No waiver by either party at any time of any breach
by the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at any time.
(f) EQUITABLE RELIEF. The Employee acknowledges that money damages
would be both incalculable and an insufficient remedy for a breach of Section 7,
8, 9, 10 or 11 by the Employee and that any such breach would cause the Company
irreparable harm. Accordingly, the Company, in addition to any other remedies at
law or in equity it may have, shall be entitled, without the requirement of
posting of bond or other security, to equitable relief, including injunctive
relief and specific performance, in connection with a breach of Section 7, 8, 9,
10 or 11 by the Employee.
13
(g) COMPLETE AGREEMENT. The provisions of this Agreement constitute
the entire and complete understanding and agreement between the parties with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous oral and written agreements, representations and understandings
between the Employee and the Company, or its affiliates and subsidiaries, which
are hereby terminated. Other than expressly set forth herein, the Employee and
the Company acknowledge and represent that there are no other promises, terms,
conditions or representations (oral or written) regarding any matter relevant
hereto. This Agreement may be executed in two or more counterparts.
(h) MEDIATION; ARBITRATION. (i) The Company and the Employee shall
mediate any claim or controversy arising out of or relating to this Agreement or
any breach thereof if either of them requests mediation and gives written notice
to the other (the "Mediation Notice"). Any notice given pursuant to the
preceding sentence shall include a brief statement of the claim or controversy.
If the Company and the Employee do not resolve the claim or controversy within
five (5) days after the date of the Mediation Notice, the Company and the
Employee shall then use reasonable efforts to agree upon an independent
mediator. If the Company and the Employee do not agree upon an independent
mediator within ten (10) days after the date of the Mediation Notice, either
party may request that JAMS/Endispute ("JAMS"), or a similar mediation service
of a similar national scope if JAMS no longer then exists, appoint an
independent mediator. The Company and the Employee shall share the costs of
mediation equally and shall pay such costs in advance upon the request of the
mediator or any party. Within ten (10) days after selection of the mediator, the
mediator shall set the mediation. If the Company and the Employee do not resolve
the dispute within thirty (30) days after the date of the Mediation Notice, the
dispute shall be decided by arbitration as set forth below.
(ii) Any claim or controversy arising out of or relating to
this Agreement or any breach thereof shall be settled by arbitration if such
claim or controversy is not settled pursuant to mediation as set forth above.
The venue for any such arbitration shall be Dallas, Texas, or such other
location as the parties may mutually agree. Except as expressly set forth
herein, all arbitration proceedings under this Section 13(h)(ii) shall be
undertaken in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA") then in force. Only individuals who are (i)
lawyers engaged full-time in the practice of law and (ii) on the AAA register of
arbitrators shall be selected as an arbitrator. There shall be one arbitrator
who shall be chosen in accordance with the rules of the AAA. Within twenty (20)
days of the conclusion of the arbitration hearing, the arbitrator shall prepare
written findings of fact and conclusions of law. Judgment on the written award
may be entered and enforced in any court of competent jurisdiction. It is
mutually agreed that the written decision of the arbitrator shall be valid,
binding, final and non-appealable; provided however, that the parties hereto
agree that the arbitrator shall not be empowered to award punitive damages
against any party to such arbitration. The arbitrator shall require the
non-prevailing party
14
to pay the arbitrator's full fees and expenses or, if in the arbitrator's
opinion there is no prevailing party, the arbitrator's fees and expenses will be
borne equally by the parties thereto. In the event action is brought to enforce
the provisions of this Agreement pursuant to this Section 13(h)(ii), the
non-prevailing parties shall be required to pay the reasonable attorneys' fees
and expenses of the prevailing parties, except that if in the opinion of the
court or arbitrator deciding such action there is no prevailing party, each
party shall pay its own attorneys' fees and expenses.
(i) SURVIVAL. Sections 4, 6, 7, 8, 9, 10, 11, 12 and 13 of this
Agreement shall survive the termination of this Agreement.
(j) CHOICE OF LAW. This Agreement and the rights and obligations
hereunder shall be governed by and construed in accordance with the laws of the
State of Texas without reference to principles of conflicts of law of Texas or
any other jurisdiction, and, where applicable, the laws of the United States.
(k) AMENDMENT. This Agreement may not be amended or modified at any
time except by a written instrument approved by the Board and executed by the
Company and the Employee.
(l) EMPLOYEE ACKNOWLEDGMENT. Employee acknowledges that he has read and
understands this Agreement, is fully aware of its legal effect, has not acted in
reliance upon any representations or promises made by the Company other than
those contained in writing herein, and has entered into this Agreement freely
based on his own judgment.
15
IN WITNESS WHEREOF, the Employee has hereunto set the Employee's hand
and, pursuant to the authorization from the Board, the Company has caused this
Agreement to be executed in its name on its behalf, as of the 1st day of January
1, 2001.
EMPLOYEE
------------------------------------------
Xxxx X. Xxxx
ATRIUM CORPORATION
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
ATRIUM COMPANIES, INC.
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
16
SCHEDULE A
TO XXXX X. XXXX EMPLOYMENT AGREEMENT
A. Employee shall be entitled to a target bonus (the "Incentive Bonus")
for the period ending on December 31, 2001 until the end of the Employment
Period, in an amount of $75,000 per annum as follows:
B. 50% of the Employee's Incentive Bonus ("EBITDA Bonus") shall be
payable based upon achievement of the following targets:
(i) If the Company achieves 80% of its budgeted EBITDA, the
Employee shall receive 50% of the EBITDA Bonus.
(ii) If the Company achieves 90% of its budgeted EBITDA, the
Employee shall receive 75% of the EBITDA Bonus.
(iii) If the Company achieves 100% of its budgeted EBITDA, the
Employee shall receive 100% of the EBITDA Bonus.
(iv) If the Company achieves 110% of its budgeted EBITDA, the
Employee shall receive 125% of the EBITDA Bonus.
(v) The EBITDA Bonus will be paid on a sliding scale on a pro
rated basis. For example, if 95% of budgeted EBITDA is
achieved, the Employee is entitled to 87.5% of the EBITDA
Bonus. No EBITDA Bonus will be paid if the Company achieves
less than 80% of the budgeted EBITDA and in no event will the
Company pay in excess of 125% of the EBITDA Bonus.
(vi) For purposes of the EBITDA Bonus, EBITDA shall be defined as
earnings from operations before interest, taxes, depreciation,
amortization and extraordinary gains or losses of the Company
and all of its subsidiaries on a consolidated basis. Budgeted
EBITDA shall be such amount as is set by the Board of
Directors annually as adjusted from time to time to reflect
acquisitions/divestitures by the Company or its subsidiaries.
C. 35% of the Employee's Incentive Bonus shall be payable based upon
achievement of the following targets:
(i) If the Company meets the performance targets set by the Board
of Directors with respect to Bad Debts/Collections, then the
Employee shall be entitled to receive 10% of the Incentive
Bonus.
1
(ii) If the Company meets the performance targets set by the Board
of Directors with respect to Accounts Receivable Days, then
the Employee shall be entitled to receive 15% of the Incentive
Bonus.
(iii) If the Company meets its performance targets with respect to
Month End Closing, then the Employee shall be entitled to
receive 10% of the Incentive Bonus.
(iv) The above-stated percentages of Incentive Bonus shall not be
paid on a sliding scale or pro rated basis. Achievement of the
performance targets set by the Board of Directors shall be
determined by the Board of Directors in its sole discretion.
The above-described performance targets shall be set from time
to time by the Board of Directors in its sole discretion.
D. The remaining 15% of the Employee's Incentive Bonus shall be based
upon the achievement of management objectives to be set from year to year by the
Board of Directors.
2
SCHEDULE B
Stock Options:
1) Effective as of October 2, 1998, the Employee has been granted options to
purchase 145,000 shares of common stock (the "Common Stock") of the Company
pursuant to the D and W Holdings, Inc. 1998 Stock Option Plan (the "Plan") and
options to purchase 25,000 shares of Common Stock pursuant to the D and W
Holdings, Inc. 1998 Replacement Plan (the "Replacement Plan").
