EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into on this 8 day of December, of
2006,
BETWEEN:
(1) Dura Automotive Systems, Inc., a Delaware corporation ("the Company")
with its headquarters and principal place of business located at 0000
Xxxxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx, 00000; and,
(2) Xxxxx Xxxxxxxx, a resident of Michigan ("the Employee"), currently
residing at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx Xxxxx, Xxxxxxxx, 00000.
THE COMPANY AND THE EMPLOYEE HEREBY AGREE, in consideration of the mutual
obligations and covenants set forth below, to the following terms and
conditions:
1. EMPLOYMENT AND TERM
The Company shall employ the Employee as its Chief Operating Officer, effective
on the later of November 27, 2006 or the date on which the U.S. Bankruptcy Court
assigned to the Company's current U.S. Chapter 11 bankruptcy reorganization
proceeding approves this Agreement (the "Effective Date"). (If the U.S.
Bankruptcy Court does not approve this Agreement, then it shall never take
effect or otherwise obligate the Company in any regard with respect to the
Employee.) The Employee hereby accepts such employment on the terms and
conditions set forth in this Employment Agreement ("the Employment"). The
Employment shall be in Rochester Hills, Michigan, or wherever the Company's
headquarters may in the future be. The term of employment shall commence on the
Effective Date and shall automatically end on the date that is three (3)
calendar years immediately following the Effective Date (hereinafter referred to
as the "Expiration Date"), unless terminated sooner per the terms of this
Agreement.
2. DUTIES
2.1 The Employee shall devote all of his time, attention, and best efforts
to the Company's business. The Employee shall faithfully and
diligently perform the duties and responsibilities assigned to him by
the Chief Executive Officer of the Company and/or by the Company's
Board of Directors. The Employee shall report to the Chief Executive
Officer of the Company.
2.2 The Employee agrees to comply with all federal, state, and local laws
applicable to his Employment. The Employee also agrees to comply with
all of the Company's rules, regulations, and policies in force during
the Employment.
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3. COMPENSATION
3.1 Base Salary. While the Employee is employed by the Company, the
Company shall pay the Employee in accordance with the normal payroll
practices of the Company (but not less frequently than monthly) an
annual gross salary at a rate of five-hundred thousand dollars and no
cents ($500,000.00) per year ("Base Salary") as of the Effective Date.
The Employee's Base Salary shall be reviewed annually by the Chief
Executive Officer of the Company and approved by the Company's Board
of Directors.
3.2 Annual Bonus. In addition to Base Salary, while the Employee is
employed by the Company, the Employee shall be entitled to participate
in the Dura Automotive Systems, Inc. Annual Bonus Plan, pursuant to
the written terms of that Plan. The Employee's bonus opportunity under
that Plan shall be 80% of his Base Salary. Notwithstanding the
foregoing, no payments under the Annual Bonus Plan shall be made
except upon Order approving said payments by the U.S. Bankruptcy Court
assigned to the Company's current U.S. Chapter 11 bankruptcy
reorganization proceeding.
3.3 Key Management Incentive Plan. Also in addition to Base Salary, while
the Employee is employed by the Company, the Employee shall be
entitled to participate in the Dura Automotive Systems, Inc. 2006 Key
Management Incentive Plan, pursuant to the written terms of that Plan.
For purposes of this Agreement, however, the Date of Award as
specified in that Plan shall be the Effective Date of this Agreement,
and the Maximum Award percentage as specified in that Plan shall be
80% of the Employee's Base Salary and Annual Bonus. Notwithstanding
the foregoing, no payments under the Key Management Incentive Plan
shall be made except upon Order approving said payments by the U.S.
Bankruptcy Court assigned to the Company's current U.S. Chapter 11
bankruptcy reorganization proceeding.
3.4 Signing Bonus. The Employee shall be entitled to a one-time Signing
Bonus in the gross amount of two-hundred thousand dollars and no cents
($200,000.00). Said Signing Bonus shall be paid 50% on the later of
December 1, 2006 and the Effective Date; and the remaining 50% on the
later of May 1, 2008 and the Effective Date. If the Employee is no
longer employed on either of those dates, then he shall not be
eligible for and shall be deemed to have never accrued said Signing
Bonus.
3.5 Flexible Perquisite Program. While the Employee is employed by the
Company, the Employee shall be entitled to participate in the Dura
Automotive Systems, Inc. Executive Flexible Perquisite Program,
pursuant to the written terms of that Program; provided, however, that
the annual allowance as specified in that Program shall be a gross
amount of thirty-three thousand dollars and no cents ($33,000.00), and
the Employee's maximum economic entitlement under that Program shall
be reduced and pro-rated to reflect the Employee's actual start date
with the Company as being the Effective Date rather than the date on
which that Program commenced.
4. BENEFITS
4.1 Incentive, Savings and 401(k) Plans While the Employee is employed by
the Company, the Employee shall be entitled to participate in all
incentive, savings and 401(k) plans, practices, policies and programs,
on terms not less favorable than those applicable to other similarly
situated senior executives of the Company, and in accordance with such
terms as in
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effect from time to time.
4.2 Welfare Benefits While the Employee is employed by the Company, the
Employee shall be eligible to participate in and shall receive all
benefits under welfare benefit plans, practices, policies and programs
provided by the Company (including medical, dental, disability, group
life, optional supplemental life, accidental death and dismemberment,
dependent care, and long-term care plans and programs) on terms not
less favorable than those applicable to other similarly situated
senior executives of the Company, and in accordance with such terms as
in effect from time to time.
4.3 Vacation While the Employee is employed by the Company, the Employee
shall earn four (4) weeks paid vacation time per year, and shall be
entitled to use said vacation time on terms not less favorable than
the plans, practices, policies, and programs applicable to other
similarly situated senior executives of the Company.
4.4 Expenses. While the Employee is employed by the Company, the Employee
shall be entitled to receive prompt reimbursement for all reasonable
and necessary business expenses incurred by Executive, in accordance
with the practices and policies applicable to other senior executives
of the Company. The Employee shall be entitled to receive prompt
reimbursement for travel expenses incurred in connection with the
performance of his duties under this Agreement, pursuant to the terms
and practices of Company's reimbursement policies. The Employee shall
submit to the Company such vouchers or expense statements that
reasonably evidence expenses incurred in accordance with the Company's
travel and expense reimbursement policy as applicable to other
similarly situated senior executives of the Company.
4.5 Automobile Insurance. While the Employee is employed by the Company,
the Company shall arrange for its automobile insurance policy to
cover/include the Employee as an additional insured regarding his
Company vehicle.
4.6 Right to Change Plans. Nothing in this Agreement shall be construed to
limit, condition, or otherwise encumber the right of the Company to
amend, discontinue, substitute, or maintain any benefit plan, program,
or perquisite. Employee acknowledges and agrees that he has been
provided with copies of all applicable plan and benefits documents
prior to executing this Agreement.
5. REASONABLENESS OF RESTRICTIONS
The Employee acknowledges that, during the term of Employment, the Company will
provide the Employee with the use of and access to trade secrets and
confidential information. In turn, the Employee recognizes that, while
performing his duties hereunder he will have access to and come into contact
with trade secrets and confidential information belonging to the Company and
will obtain personal knowledge of and influence over its customers and/or
employees. The Employee therefore agrees that the restrictions contained in
Sections 6, 7, and 8 are reasonable and necessary to protect the legitimate
business interests of the Company both during and after the termination of the
Employment.
6. CONFIDENTIALITY
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6.1 The Employee shall neither during the Employment (except in the proper
performance of his duties) nor at any time (without limit) after the
termination thereof, howsoever arising, directly or indirectly:
6.1.1 use for his own purposes or those of any other person, company,
business entity, or other organization whatsoever, or,
6.1.2 disclose to any person, company, business entity, or other
organization whatsoever,
any trade secrets or confidential information relating or belonging to
the Company, including but not limited to any such information
relating to clients or customers, client or customer lists or
requirements, market information, business plans or dealings,
financial information and plans, trading models, market access
information, research activities, any document marked confidential, or
any information which the Employee has been told is confidential or
which he might reasonably expect the Company would regard as
confidential, or any information which has been given the Company in
confidence by customers, suppliers, or other persons, and even if a
document has not been marked confidential, the Employee shall treat
the document and its contents as confidential information if the
Employee has been told or otherwise knows or reasonably should know
the document and its contents are confidential. (Each and all of the
foregoing is hereinafter referred to by use of the term
"Confidential".)
6.2 The Employee shall not at any time during the continuance of the
Employment with the Company make any notes or memoranda relating to
any matter within the scope of the Company's business, dealings, or
affairs otherwise than for the benefit of the Company.
6.3 In the event of a breach or a threatened breach by the Employee of the
provisions of this Section, the Company shall be entitled to an
injunction restraining the Employee from disclosing, in whole or in
part, such information or from rendering any services to any person,
firm, corporation, association, or other entity to whom such
information has been disclosed or is threatened to be disclosed.
Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies available to the Company for such breach
or threatened breach, including the recovery of damages from the
Employee.
7. TRADE SECRETS
7.1 During the term of this Employment Agreement, the Employee
acknowledges that he will be afforded access to and become familiar
with various trade secrets of the Company, including, but not
necessarily be limited to the following: the Company's business plans,
financial information, marketing strategies, customer or client lists,
software and research and proprietary technology information. The
Employee acknowledges that these trade secrets are owned and shall
continue to be owned solely by the Company and that they contain
specialized and confidential information not generally known in the
industry and which constitute the
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Company's trade secrets. The Employee recognizes and acknowledges that
it is essential to the Company to protect this trade secret
information.
7.2 The Employee further represents to the Company that, as an inducement
for his employment, the Employee will hold this information in trust
and confidence for the Company's sole benefit and use during the
Employment and after the Employment terminates, the Employee agrees
not to use this information for any purpose whatsoever or to divulge
this information to any person other than the Company or persons to
whom the Company has given without express written authorization.
8. POST-TERMINATION OBLIGATIONS
8.1 Non-Solicitation of Employees. The Employee hereby agrees that he will
not for a period of one (1) year immediately following the termination
of his employment, howsoever arising, either on his own account or in
conjunction with or on behalf of any other person, company, business
entity, or other organization whatsoever directly or indirectly:
8.1.1 induce, solicit, entice or procure any person who is an employee
of the Company to leave such employment, where that person is:
8.1.1.1 a Company employee on the termination date; or,
8.1.1.2 had been a Company employee in any part of the one (1)
year immediately preceding the termination date; or
8.1.2 accept into employment or otherwise engage or use the services
of any person who:
8.1.2.1 is a Company employee on the termination date; or,
8.1.2.2 had been a Company employee in any part of the one (1)
year immediately preceding the termination date.
8.2 Because of the Employee's knowledge of the Company's business, in the
event of the Employee's actual or threatened breach of the provisions
of this Section, the Company shall be entitled to, and the Employee
hereby consents to, an injunction restraining the Employee from any of
the foregoing. However, nothing herein shall be construed as
prohibiting the Company from pursuing any other available remedies for
such breach or threatened breach, including the recovery of damages
from the Employee. The Employee agrees that the provisions of this
Section are necessary and reasonable to protect the Company in the
conduct of its business. If any restriction contained in this Section
shall be deemed to be invalid or unenforceable by reason of extent,
duration, or geographic scope, then the extent, duration, and
geographic scope of such restriction shall be deemed to be reduced to
the fullest extent, duration, and geographic scope permitted by law
and enforceable.
8.3 The Employee agrees that in the event of receiving from any person,
company,
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business entity, or other organization an offer or employment either
during the continuance of this Employment Agreement or during the
continuance in force of any of the restrictions set out herein, he
will forthwith provide to such person, company, business entity, or
other organization making such the offer of employment a full and
accurate copy of this Employment Agreement signed by the parties
hereto.
9. TERMINATION OF THE EMPLOYMENT
9.1 Death Or Incapacity. In the event of the death of the Employee during
the Employment, the Employment shall be deemed immediately terminated
and the Employee's beneficiaries shall be entitled to receive any pro
rata accrued and unpaid amounts under Sections 3.1, 3.2 and 3.3
through the this termination date. If the Company determines in good
faith that an "Incapacity" of the Employee has occurred (pursuant to
the definition of "Incapacity" set forth below), then it may give to
the Employee written notice of its intention to terminate the
Employment. In such event, the Employment shall terminate effective on
the tenth (10th) day after receipt by the Employee of such notice. For
purposes of this Employment Agreement, "Incapacity" shall mean such
physical or mental condition of the Employee as defined in the
Long-Term Disability Plan, which continues for at least 120 days and
which renders the Employee incapable of performing the essential
functions of his position with or without reasonable accommodations
(as confirmed by competent medical evidence satisfactory to Company).
9.2 Termination By The Company For Cause. Prior to the Expiration Date,
the Company may terminate the Employee's employment and this Agreement
for "Cause," and in such event, the Employment shall terminate
effective upon delivery of notice to the Employee of such termination.
For purposes of this Employment Agreement, "Cause" shall mean (i) a
material breach by the Employee of his duties and responsibilities
under this Employment Agreement (other than due to an Incapacity) or
any breach by the Employee of any material term of this Agreement,
(ii) the engaging by the Employee in conduct that is demonstrably and
materially injurious to the business, reputation, character, or
community standing of Company, (iii) the engaging by the Employee in
dishonest, fraudulent, or unethical conduct or in other egregious
conduct involving serious moral turpitude to the extent that in the
reasonable judgment of the Board of Directors, the Employee's
reputation and credibility no longer conform to the standards expected
of the Company's executives, (iv) the Employee's admission,
confession, plea bargain to or conviction in a court of law or any
crime or offense involving misuse or misappropriation of money or
other property of Company, (v) neglect of duties; (vi) the Employee's
failure to manage the business of the Company in the ordinary course,
in good faith and in a professional and diligent manner consistent
with acceptable business practices; (vii) the Employee acting outside
the scope of his duties and responsibilities as set forth in this
Agreement; and (viii) a violation by the Employee of any statutory or
common law duty to Company, including the duty of loyalty. In the
event that the Company exercises the election to terminate the
Employment pursuant to this Section 9.2, then the Employment shall
terminate effective upon delivery of notice to the Employee of such
termination, and the Employee shall be
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entitled to receive any pro rata accrued but unpaid amounts under
Section 3.1 of this Agreement through the date of termination, but
shall not be entitled to receive any other amounts under this
Employment Agreement or otherwise.
9.3 Termination By The Company Other Than For "Cause". Prior to the
Expiration Date, the Company may terminate the Employee's employment
and this Agreement without Cause, and in such event, the Employment
shall terminate effective upon delivery of notice to the Employee of
such termination. In such event, and upon the execution of a general
release of all claims against Company, and subject to the remaining
provisions of this Section 9.3, the Employee shall be entitled to
receive unpaid amounts under Sections 3.1, 3.2, 3.3, 3.4, and 3.5
through the Expiration Date of this Employment Agreement, with said
amounts to be paid on regular payroll cycles as if the Employment had
not been terminated prior to the Expiration Date. The amounts, if any,
payable under this Section 9.3 shall commence within 45 days after the
Employee's termination of the Employment; provided that the Employee
has signed a general release as described in the preceding sentence
and the revocation period for such release has expired; and provided,
further, that if the Employee is a "specified employee" (as that term
is defined in Section 409A of the Internal Revenue Code) at the time
of his termination of the Employment, then the amounts, if any,
payable under this Section 9.3 shall not commence until the first day
of the seventh month following the Employee's termination of the
Employment. Notwithstanding the foregoing, no payments under this
Section 9.3 of this Agreement shall be made except upon Order
approving said payments by the U.S. Bankruptcy Court assigned to the
Company's current U.S. Chapter 11 bankruptcy reorganization
proceeding.
9.4 Termination By The Employee With "Good Reason". Prior to the
Expiration Date, the Employee may terminate the Employment and this
Agreement for "Good Reason." For purposes of this Employment
Agreement, "Good Reason" shall mean:
(a) demotion of the Employee, without his consent, by the Company to
a lesser position than that provided for in this Employment
Agreement as of the Effective Date (including a material
reduction or demotion of the Employee's job title,
responsibilities, authorities, powers, duties, Base Salary, or
benefits; or a change of the job position to which Employee
reports); or
(b) material breach of any provision of this Employment Agreement by
the Company;
provided, however, that Good Reason shall not exist unless the
Employee has first provided the Company with a written notice setting
forth the reasons for the existence of Good Reason in reasonable
detail, and the Company has not cured the reasons for the existence of
Good Reason within thirty (30) days after receiving such notice. If
the Employee terminates the Employment for Good Reason, and upon the
execution of a general release of all claims against Company, and
subject to the remaining provisions of this Section 9.4, the Employee
shall be entitled to receive unpaid amounts under Sections 3.1, 3.2,
3.3, 3.4 and 3.5 through the Expiration Date,
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with said amounts to be paid on regular payroll cycles as if the
Employment had not been terminated prior to the Expiration Date. The
amounts, if any, payable under this Section 9.4 shall commence within
forty-five (45) days after the Employee's termination of the
Employment; provided that the Employee has signed a general release as
described in the preceding sentence and the revocation period for such
release has expired; and provided, further, that if the Employee is a
"specified employee" (as that term is defined in Section 409A of the
Internal Revenue Code) at the time of his termination of the
Employment, the amounts, if any, payable under this Section 9.4 shall
not commence until the first day of the seventh month following the
Employee's termination of the Employment. Notwithstanding the
foregoing, no payments under this Section 9.4 of this Agreement shall
be made except upon Order approving said payments by the U.S.
Bankruptcy Court assigned to the Company's current U.S. Chapter 11
bankruptcy reorganization proceeding.
9.5 Termination By The Employee Other Than For "Good Reason". Prior to
the Expiration Date, the Employee may terminate the Employment and
this Agreement for other than Good Reason, and in such event, the
Employment shall terminate effective upon delivery of notice to the
Company by Employee of such termination. In such event, the Employee
shall be entitled to receive any pro rata accrued but unpaid amounts
under Section 3.1 of this Agreement through the date of termination,
but shall not be entitled to receive any other amounts under this
Employment Agreement or otherwise.
9.6 On termination of the Employment, the Employee shall return to the
Company in accordance with its instructions all of the Company's
proprietary technology and trading models, records, software, models,
reports, and other documents and any copies thereof and any other
property belonging to the Company which are in the Employee's
possession or under his control. The Employee shall, if so required by
the Company, confirm in writing his compliance with his obligations
under this Clause.
9.7 The termination of the Employment shall be without prejudice to any
right the Company may have in respect of any breach by the Employee of
any provisions of this Employment Agreement which may have occurred
prior to such termination.
9.8 In the event of termination of the Employment hereunder however
arising, the Employee agrees that he will not at any time after such
termination represent himself as still having any connection with the
Company, except as a former employee for the purpose of communicating
with prospective employers or complying with any applicable statutory
requirements.
9.9 Upon a termination of the Employment under this Section, the Company
shall be relieved of all further obligations under this Employment
Agreement. Notwithstanding such termination of the Employment, the
Employee shall continue to be bound by the provisions of Sections 6,
7, and 8.
10. SEVERABILITY
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The various provisions and sub-provisions of this Employment Agreement are
severable, and if any provision or sub-provision or identifiable part thereof is
held to be invalid or unenforceable by any court of competent jurisdiction, then
such invalidity or unenforceability shall not affect the validity of
enforceability of the remaining provisions or sub-provisions or identifiable
parts in this Employment Agreement.
11. WARRANTY
The Employee represents and warrants that he is not prevented by any other
Employment Agreement, arrangement, contract, understanding, Court Order or
otherwise, which in any way directly or indirectly conflicts, is inconsistent
with, or restricts or prohibits him from fully performing the duties of the
Employment, in accordance with the terms and conditions of this Employment
Agreement.
12. NOTICES
Any notice to be given hereunder may be delivered (a) in the case of the Company
by first class mail addressed to its Registered Office and (b) in the case of
the Employee, either to him personally or by first class mail to his last known
residence address. Notices served by mail shall be deemed given when they are
mailed.
13. WAIVERS AND AMENDMENTS
No act, delay, omission, or course of dealing on the part of any party hereto in
exercising any right, power, or remedy hereunder shall operate as, or be
construed as, a waiver thereof or otherwise prejudice such party's rights,
powers, and remedies under this Employment Agreement. This Employment Agreement
may be amended only by a written instrument signed by the Employee and a duly
authorized officer of the Company.
14. PRIOR AGREEMENTS
This Employment Agreement cancels and is in substitution for all previous
letters of engagement, offer letters, agreements, and arrangements (whether oral
or in writing) relating to the subject-matter hereof between the Company and the
Employee, all of which shall be deemed to have been terminated by mutual
consent. This Employment Agreement constitutes the entire terms and conditions
of the Employee's employment and no waiver or modification thereof shall be
valid unless in writing, signed by the parties, and only to the extent therein
set forth. Notwithstanding the foregoing, however, the terms and conditions of
the written, signed Confidentiality Agreement that the Employee signed with the
Employer prior to commencing the Employment shall remain in full force and
effect, pursuant to its terms.
15. JURISDICTION AND GOVERNING LAW
Any and all disputes arising under or in connection with this Employment
Agreement or concerning in any way the Employee's employment shall be
adjudicated exclusively in the State of Michigan, within twenty-five (25)
geographical miles of Rochester Hills. The Employee consents to personal
jurisdiction of any state or federal court sitting in the State of Michigan
within twenty (2)
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geographical miles of Rochester Hills, and waives any objection that such forum
is inconvenient. The Employee hereby consents to service of process in any such
action by U.S. mail or other commercially reasonable means of receipted
delivery. This Employment Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan.
16. ASSIGNABILITY
The rights and obligations contained herein shall be binding on and inure to the
benefit of the successors and assigns of the Company. The Employee may not
assign his rights or obligations hereunder without the express written consent
of the Company.
17. HEADINGS; CONSTRUCTION
The headings contained in this Employment Agreement are inserted for reference
and inserted for reference and convenience only and in no way define, limit,
extend, or describe the scope of this Employment Agreement or the meaning or
construction of any of the provisions hereof. As used herein, unless the context
otherwise requires, the single shall include the plural and vice versa, words of
any gender shall include words of any other gender, and "or" is used in the
inclusive sense.
18. SURVIVAL OF TERMS
If this Employment Agreement is terminated for any reason, the provisions of
Sections 6, 7, and 8 shall survive and the Employee and the Company, as the case
may be, shall continue to be bound by the terms thereof to the extent provided
therein.
19. CONTINGENCIES
Employee understands that as of the date of signing of this Agreement, the
Company is in U.S. Chapter 11 bankruptcy reorganization and lacks the legal
authority to bind itself to the terms and conditions of this Agreement without
U.S. Bankruptcy Trustee approval. Accordingly, notwithstanding anything to the
contrary herein, this Agreement shall not become final and binding on the
Company unless and until it is approved by the U.S. Bankruptcy Trustee assigned
to the Company's Chapter 11 proceeding. Further, and independent of the Trustee
approval issue, the Employee understands and agrees that as a continuing
condition of his employment with the Company, he must maintain his legal
authorization to be employed in the United States, either by continuation of his
current green card status or the obtainment of U.S. citizenship.
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20. EMPLOYEE ACKNOWLEDGMENT
THE EMPLOYEE REPRESENTS THAT HE HAS HAD AMPLE OPPORTUNITY TO REVIEW THIS
AGREEMENT AND THE EMPLOYEE ACKNOWLEDGES THAT HE UNDERSTANDS THAT IT CONTAINS
IMPORTANT CONDITIONS OF THE EMPLOYMENT AND THAT IT EXPLAINS POSSIBLE
CONSEQUENCES, BOTH FINANCIAL AND LEGAL, IF THE EMPLOYEE BREACHES THE AGREEMENT.
AS WITNESS the hands of a duly authorized officer of the Company and of the
Employee the day and year first before written.
SIGNED by /s/ Xxxxxxx Xxxxxx )
---------------------------
Xxxxxxx Xxxxxx, Vice President, )
Human Resources, for and on behalf of )
Dura Automotive Systems, Inc. )
Date: December 8, 2006
SIGNED by /s/ Xxxxx Xxxxxxxx )
--------------------------
Xxxxx Xxxxxxxx )
Date: 12/8/06
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