Exhibit 10.24
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of this 27th day of September, 1999 by and between
Xxxxxxx X. Xxxxx, a resident of Englewood, Colorado (the "Executive"), and
Precision Auto Care, Inc., a Virginia corporation (the "Company").
WITNESSETH:
WHEREAS, on March 31, 1999 the Company granted to the Executive options to
purchase 20,000 shares of the Company's common stock and awarded the Executive
10,000 shares of restricted stock pursuant to the terms of the Company's 1999
Employee Stock Option Restricted Stock Plan (the "Stock Option Plan").
WHEREAS, it was a condition to the grant of the options and the award of
restricted shares to the Executive that the Stock Option Plan be approved by the
Company's shareholders and that the Executive agree to terminate the terms of
all employment agreements between the Executive and the Company, including,
without limitation, the Employment Agreement between the Executive and the
Company dated August 26, 1997, and to replace the terms of such employment
agreements with the terms of this employment agreement.
WHEREAS, the Executive desires to continue to provide his services to the
Company and the Company desires to continue to employ the Executive upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual promises,
covenants and agreements contained herein, and intending to be legally bound,
the parties hereby agree as follows:
1. Employment and Term.
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The Company will employ the Executive, and the Executive hereby accepts
employment with the Company, for an initial term that shall be deemed to have
commenced on November 12, 1997, and shall continue for a period of three (3)
years thereafter until and including November 12, 2000, (the "Initial Term"),
unless such employment is earlier terminated as provided herein. After
expiration of the Initial Term, the Executive's employment under this Agreement
shall continue for consecutive one-year terms unless either party notifies the
other that it is terminating the agreement by giving the other party written
notice at least 45 days prior to the termination of the Initial Term or
applicable additional one-year term. In the event that a party notifies the
other that it is terminating this Agreement in accordance with the preceding
sentence, the Company shall not have any obligation to pay any severance benefit
or other compensation to the Executive pursuant to Section 7 of this Agreement
or otherwise.
2. Duties.
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The Executive shall serve in the capacity of Vice President, Car Wash
Division. During the term of his employment hereunder, the Executive shall
devote his full business time and attention to the performance of his duties for
the Company.
3. Compensation.
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(a) Base Salary. The Company shall pay the Executive, and the
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Executive shall accept, as full compensation for all services rendered
hereunder, a basic salary (the "Base Salary") and the other compensation and
benefits provided hereunder. The Executive's Base Salary shall be at an annual
rate of One Hundred Twenty Thousand Dollars ($120,000), payable in approximately
equal installments at such intervals as are consistent with the Company's pay
periods for salaried executive employees. The Executive acknowledges that the
Company is current in the payment of the Base Salary for all periods through and
including the date of this Agreement.
(b) Performance Bonus. The Executive shall participate in bonus plans
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and shall be entitled to receive bonuses thereunder, as may be approved by the
Board of Directors in its discretion.
(c) Benefits.
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(i) The Executive shall be eligible to participate in retirement,
group insurance, medical, dental, vacation and any other plans or programs of
substantially similar character as are made generally available to executive
employees of the Company which do not duplicate the benefits otherwise
specifically provided in this Agreement. All such benefits are to be provided by
the Company, subject to the terms of any welfare or pension plan sponsored by
the Company.
(ii) The Company shall reimburse the Executive for all expenses
incurred by him in the performance of his duties pursuant to this Agreement in
accordance with the Company's policies concerning the reimbursement of expenses.
(iii) Executive shall receive such other benefits and/or
allowances as are permitted to him from time to time by the Board of Directors.
(d) Restructuring of Payments. Notwithstanding anything in this
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Agreement to the contrary, in the event that, in the opinion of the Company's
auditors, any payments of compensation to be made hereunder would be treated as
"excess parachute payments" within the meaning of section 280G of the Internal
Revenue Code as amended, the Company and the Executive shall use their best
efforts to restructure any of the payments so as to avoid the imposition of
excise tax upon the Executive and the loss of deduction for such payments by the
Company.
4. Confidentiality.
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While employed by the Company under this Agreement and at all times
thereafter, the Executive shall not, without the prior written consent of the
Company, divulge to any third party or use for his own benefit or the benefit of
any third party, or for any purpose other than the exclusive benefit of the
Company, any confidential or proprietary business or technical information
revealed, obtained or developed in the course of his employment with the Company
or his duties performed for the Company or which is otherwise the property of
the Company or any of its subsidiaries or affiliated companies; provided that,
nothing contained herein shall restrict the Executive's use or disclosure of
such information (i) in the proper course of conduct of the Company's business,
(ii) known generally to the public (other than that which he may have disclosed
in breach of this Agreement) or (iii) as required by law so long as the
Executive gives the Company prior notice of such required disclosure and
cooperates with the Company in keeping the information confidential unless
precluded from doing so by legal authority.
5. Covenant Not to Compete.
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(a) The Executive shall not, within any geographical area while
employed by the Company or while performing duties for the Company hereunder,
and within the United States of America for two (2) years thereafter, except
that if the Executive is terminated by the Company other than for cause under
Section 7(d), or is terminated by the Executive for good reason as set forth
under Section 7(e), than for a period of time equal to the lessor of 12 months
or the remainder of the Initial Term (if it has not yet expired) or the number
of months remaining in any additional one-year term arising thereafter, directly
or indirectly engage or become interested in (as owner, stockholder, partner,
co-venturer, director, officer, employee, agent, consultant or otherwise) any
business that engages in an auto care or manufacturing business of a type
conducted by the Company or any of its subsidiaries during the term of this
Agreement. Notwithstanding the foregoing, the Executive may hold as a passive
investment up to five percent (5%) of the outstanding securities of any class of
any publicly-held entity that engages in the auto care industry.
(b) It is the desire and the intent of the parties that the provisions
of this Section 5 shall be enforceable to the fullest extent permissible under
applicable law and public policy. Accordingly, if this Section 5 or any portion
thereof shall be adjudicated to be invalid or unenforceable, the length and
scope of this Section 5 shall be reduced to the extent necessary so that this
covenant may be enforced to the fullest extent possible under applicable law.
The parties hereto do expressly authorize any court of competent jurisdiction or
any arbitrator or panel of arbitrators convened in accordance with Section 6(b)
of this Agreement to enforce any provision of this Section 5 or portion thereof
or to modify any such provision or portion thereof in order that any such
provision or portion thereof shall be enforced to the fullest extent permitted
by applicable law.
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6. Enforcement.
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(a) Injunctive Relief. The parties recognize that, in the event of any
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breach by the Executive of any of the provisions of Section 4 or 5 hereof, the
Company will suffer continuing and irreparable harm for which the Company will
not have an adequate remedy at law. The Executive hereby waives any and all
right to assert any claim or defense that the Company has an adequate remedy at
law for any such breach. In recognition thereof, the Company and the Executive
hereby agree that, in the event of any such breach, the Company will be entitled
to seek injunctive relief or any other appropriate remedy to enforce such
provisions. The parties further agree that this Section 6 shall not in any way
limit remedies at law or in equity otherwise available to the Company. In the
event the Company seeks injunctive relief and is unsuccessful on the merits, or
terminates such action prior to entry of a judgment or other ruling on the
merits, other than a termination of such action due to a settlement agreement
between the Company and the Executive, the Company shall reimburse the Executive
for his reasonable attorneys' fees.
(b) Arbitration. In the event of any dispute between the parties
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under or relating to this Agreement or relating to the Executive's employment by
the Company, such dispute shall be submitted to and settled by arbitration in
the Commonwealth of Virginia in accordance with the Employment Dispute
Resolution Rules of the American Arbitration Association then in effect, by an
arbitrator or arbitrators selected in accordance with said rules. The
arbitrator(s) shall have the right and authority to determine how their award or
decision as to each issue and matter in dispute may be implemented or enforced.
Any decision or award shall be final and conclusive on the parties; there shall
be no appeal therefrom other than for claimed bias, fraud or misconduct by the
arbitrator(s); judgment upon any award or decision may be entered in any court
of competent jurisdiction in the Commonwealth of Virginia or elsewhere; and the
parties hereto consent to the application by any party in interest to any court
of competent jurisdiction for confirmation or enforcement of such award. The
party against whom a decision or award is made shall pay the fees of the
American Arbitration Association. Notwithstanding the foregoing, the Company, at
its sole option, shall be entitled to elect to enforce its rights contemplated
by Section 6(a) hereof relating to breaches of Section 4 or 5 hereof by
arbitration pursuant to a proceeding commenced by the Company in a court of
competent jurisdiction in lieu of an arbitration proceeding.
7. Termination of Employment.
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(a) Death. The Executive's employment hereunder shall terminate in
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the event of Executive's death. Except for any salary and benefits accrued,
vested and unpaid as of the date of any such termination and except for any
benefits to which the Executive or his heirs or personal representatives may be
entitled under and in accordance with the terms of any employee benefit plan,
policy or program maintained by the Company, the Company shall be under no
further obligation hereunder to the Executive or his heirs or personal
representatives, and the Executive or his heirs and personal representatives no
longer shall be entitled to receive any payments or any other rights or benefits
under this Agreement.
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(b) Disability. The Company may terminate the Executive's employment
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hereunder for "Disability," if an independent physician mutually selected by the
Executive or his representative and the Board of Directors or its designee has
determined that the Executive has been substantially unable to render to the
Company services of the character contemplated by Section 2 of this Agreement,
by reason of a physical or mental illness or other condition continuing for more
than one hundred twenty (120) consecutive days or for shorter periods
aggregating more than one hundred eighty (180) days in any period of twelve (12)
consecutive months (excluding in each case days on which the Executive was on
vacation). In the event of such Disability, the Executive shall be entitled to
receive any salary and benefits accrued, vested and unpaid as of the date of any
such termination and any benefits to which the Executive may be entitled under
and in accordance with the terms of any employee benefit plan, policy or program
maintained by the Company. The Company shall be under no further obligation
hereunder to the Executive, and the Executive no longer shall be entitled to
receive any other payments, rights or benefits under this Agreement.
(c) Termination by the Company for Cause. The Company may terminate the
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Executive's employment hereunder for "Cause." For purposes of this Agreement,
"Cause" shall mean any of the following:
(i) The Executive's willful misconduct or gross negligence;
(ii) The Executive's conscious disregard of his obligations
hereunder;
(iii) The Executive's conscious violation of any material
provision of the Company's by-laws or of its other stated policies, standards or
regulations; or
(iv) A determination that the Executive has demonstrated a
dependence upon any addictive substance, including alcohol, controlled
substances, narcotics or barbiturates.
The Executive shall not be entitled to receive any payments or any other rights
or benefits under this Agreement (except for any salary and benefits accrued,
vested and unpaid as of the date of any such termination) or otherwise and the
Company shall be under no further obligation hereunder to the Executive.
Following any termination for Cause, the Company shall have such rights and
remedies as may be available to it for any breach of this Agreement or
otherwise.
(d) Termination by the Company other than for Cause. The Company may
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terminate the Executive's employment hereunder at any time for any other reason,
such termination being effective upon receipt of written notice. In the event
of such termination, the Executive shall be entitled to receive a severance
benefit equal to Base Salary at the rate in effect at the time of termination
for the lesser of i) twelve (12) months, or ii) the number of months remaining
in the Initial Term (if it has not yet expired) or the number of months
remaining in any additional one-year term arising thereafter, and shall also be
entitled to receive any salary and benefits accrued, vested and unpaid as of the
date of any such termination and any benefits to which the Executive may be
entitled under and in accordance with the terms of any employee
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benefit plan, policy or program maintained by the Company. This severance
benefit shall not be paid in the form of a lump sum and shall be paid over and
during the applicable period of months in accordance with the Company's standard
payroll practices. The Company shall be under no further obligation hereunder to
the Executive and the Executive shall not be entitled to receive any payments or
any other rights or benefits under this Agreement or otherwise.
(e) Termination by the Executive for Good Reason. Notwithstanding
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anything herein to the contrary, the Executive shall be entitled to terminate
his employment hereunder for "Good Reason" without breach of this Agreement. For
purposes of this Agreement, "Good Reason" shall exist in the event of any of the
following:
(i) A change in the Executive's place of employment outside of a
100-mile radius of the metropitan area of Denver, Colorado;
(ii) A material diminution in title or a substantial elimination
of the duties and responsibilities of the Executive; or
(iii) A material breach by the Company of its obligations
hereunder; or
(iv) The Executive shall cease to be the Senior Vice President
of the Company following a "change in control" of the Company. For purposes of
this Section 7(e)(iv), a "change in control of the Company" shall mean (A) the
acquisition, directly or indirectly, by any "person" (as such term is defined in
Section 13(d) and 14(d) of the Securities Exchange Act of 1934 as in effect on
the date hereof), of voting power over voting shares of the Company that would
entitle holders thereof to cast at least fifty percent (50%) of the votes that
all shareholders would be entitled to cast in the election of directors of the
Company; or (B) during any period of two consecutive years during the Initial
Term of this Agreement, individuals who at the beginning of such period
constitute the Company Board of Directors cease for any reason to constitute at
least a majority thereof, unless the election of each director who is not a
director at the beginning of such period shall have been approved in advance by
directors representing at least a majority of the directors then in office who
are directors at the beginning of such period.
In the event of such termination by the Executive, the Executive shall
nonetheless be entitled to receive a severance benefit equal to Base Salary at
the rate stated in, and payable in the manner contemplated by, Section 7(d) of
this Agreement. Except for such severance benefit and except for any salary and
benefits accrued, vested and unpaid as of the date of such termination, the
Executive no longer shall be entitled to receive any payments or any other
rights or benefits under this Agreement, and the Company shall have no further
obligation hereunder or otherwise to the Executive following any such
termination.
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(f) Termination by the Executive for other than Good Reason. The
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Executive may terminate his employment hereunder at any time for any other
reason, provided the Executive has given the Company ninety (90) days' written
notice of termination, termination being effective upon expiration of the notice
period. In the event of such termination, the Executive shall be entitled to
receive any salary and benefits accrued, vested and unpaid as of the date of any
such termination and any benefits to which the Executive may be entitled under
and in accordance with the terms of any employee benefit plan, policy or program
maintained by the Company. The Company shall be under no further obligation
hereunder to the Executive and the Executive no longer shall be entitled to
receive any other payments, rights or benefits under this Agreement or
otherwise.
(g) Pro-Rata Bonus. Whenever, pursuant to this Section 7, the Executive
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is entitled, upon the termination of his employment, to receive
"salary...accrued, vested and unpaid as of the date of any such termination",
the amount due him may include a pro-rata performance bonus, if it would be
appropriate to calculate a pro-rata portion of a performance bonus in accordance
with the provisions of any bonus plan which may have been implemented in
accordance with Section 3(b) hereof.
8. Place of Employment. The Company agrees that the principal location at
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which the Executive is to render his services hereunder will be Denver,
Colorado, unless a modification is understood and agreed to in writing by the
Executive and Company.
9. Withholding. Notwithstanding anything herein to the contrary, all
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payments required to be made hereunder by the Company to the Executive, or his
estate or beneficiaries, shall be subject to the withholding of such amounts as
the Company may reasonably determine it should withhold pursuant to any
applicable law or regulation.
10. Survival. This Agreement shall survive any termination of the
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Executive's employment hereunder unless otherwise provided herein.
11. Miscellaneous.
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(a) Successors and Assigns. The Company may assign this Agreement to,
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and only to, an entity which is owned more than fifty percent (50%), directly or
indirectly, by the Company, and any person or entity which acquires all or
substantially all of the Company's business, and, subject to the foregoing, upon
such assignment this Agreement shall inure to the benefit of and be binding upon
such entity. This Agreement shall not be assignable by the Executive and shall
inure to the benefit of and be binding upon him and his personal representative
and other legal representatives. It is understood that this Section 11(a) shall
not affect the right of the Executive to terminate his employment for "Good
Reason" pursuant to Section 7(e) hereof.
(b) Notice. Any notice or communication required or permitted under
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this Agreement shall be made in writing or sent by certified or registered mail,
return receipt requested and postage prepaid, addressed as follows:
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If to the Executive:
00000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
If to the Company:
Precision Auto Care, Inc.
000 Xxxxxx Xxxxx, X.X.
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
or to such other address as either party may from time to time duly specify by
notice given to the other party in the manner specified above. Notice shall be
deemed given when received by the other party, including by his or its agent.
(c) Entire Agreement; Amendments. This Agreement contains the entire
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agreement and understanding of the parties relating to the subject matter hereof
and supersedes all prior discussions, agreements and understandings relating
thereto between them. This Agreement may not be changed or modified, except by
an agreement in writing executed by the Company, with the approval of its Board
of Directors or its designee, and by the Executive.
(d) Waiver. The waiver of a breach of any term or provision of this
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Agreement shall not operate as or be construed to be a waiver of any other or
subsequent breach of this Agreement.
(e) Governing Law. All questions concerning the construction, validity,
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enforcement and interpretation of this Agreement, and the performance of the
obligations imposed by this Agreement, shall be governed by the laws of the
Commonwealth of Virginia applicable to contracts made and wholly to be performed
in such state, without regard to choice of law principles.
(f) Severability. In the event that any one or more of the provisions
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contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable, in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of the Agreement. Such
invalid, illegal or unenforceable provision(s) shall be deemed modified to the
extent necessary to make it (them) valid, legal and enforceable.
(g) Indemnification. The Executive shall be entitled to the benefit of
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the indemnification provided by the Charter and the Bylaws of the Company;
provided that the Company shall be permitted to amend such provisions from time
to time so long as the Executive, to the extent permitted by applicable law, is
afforded indemnification at least as favorable as that provided by the Charter
and Bylaws as in effect on the date hereof.
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(h) Captions. All captions and section headings used herein are for
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convenient reference only and do not form a part of this Agreement.
(i) Counterparts. This Agreement may be executed in counterparts, each
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of which shall constitute one and the same Agreement.
(j) Computation of Time. In computing any period of time pursuant to
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this Agreement, the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a Saturday, Sunday,
or a legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday, Sunday, or legal holiday. Likewise, if the period of
time concludes on a Saturday, Sunday or a legal holiday, the period shall run
until the end of the next day thereafter which is not a Saturday, Sunday, or
legal holiday.
(k) Pronouns and Plurals. All pronouns and any variations thereof shall
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be deemed to refer to the masculine, feminine, neuter, singular, or plural as
the identity of the person or persons may require.
(l) Prior Agreements. The Executive and the Company confirm that the
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terms of this Employment Agreement shall supersede and replace in all respects
all of the terms and conditions set forth in any previous employment agreement
between the Executive and the Company, including, without limitation, the
Employment Agreement dated August 26, 1997.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the day and year first above written.
PRECISION AUTO CARE, INC.
_______________________________
Xxxxxxx X. Xxxxxx
President and CEO
EXECUTIVE
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Xxxxxxx X. Xxxxx
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