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EXHBIT 10.03
EMPLOYMENT AGREEMENT
(as Amended and Restated as of June 12, 1998)
This Employment Agreement ("this Agreement") is made and entered into
as of June 12, 1998 (the "Effective Date"), by and between CSK Auto, Inc., an
Arizona corporation (the "Company"), and Xxxxx Xxxxxx ("Executive").
WHEREAS, the Company and Executive are party to a certain Employment
Agreement, dated as of November 1, 1996 (the "Old Employment Agreement"); and
WHEREAS, Employer and Employee desire to amend certain provisions of
the Old Employment Agreement;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree that, as of the Effective Date, the terms and conditions of the Old
Employment Agreement be, and they hereby, are amended and restated in their
entirety, and the Company hereby agrees to employ Executive, and Executive
hereby accepts such employment, on the terms and conditions hereinafter set
forth.
1. POSITION.
From the Effective Date until the termination of Executive's employment
hereunder (the "Period of Employment"), Executive shall serve as President and
Chief Operating Officer of the Company, and shall have the normal duties and
responsibilities of a chief operating officer. Executive shall be subject to the
customary oversight and direction of, and shall report solely to, the Board of
Directors of the Company (the "Board"). During the Period of Employment,
Executive will (a) during normal business hours, devote his full time and
exclusive attention to, and use his best efforts to advance, the business and
welfare of the Company, and (b) not engage in any other employment activities
for any direct or indirect remuneration without the concurrence of the Board;
provided, however, Executive may serve on corporate, charitable and community
boards so long as such activities do not unreasonably interfere with the
performance of his duties under this Agreement, and provided that any such
activities are approved in advance by the Board, which approval will not be
unreasonably withheld.
2. PLACE OF EMPLOYMENT.
Executive's office shall be at the Company's principal executive
offices in Phoenix, Arizona.
3. COMPENSATION.
3.1 Base Salary. During the Period of Employment, the Company shall pay
Executive a Base Salary at the rate of Four Hundred Fifty Thousand Dollars
($450,000) per annum payable at least as frequently as monthly and subject to
payroll deductions as may be necessary or customary in respect of the Company's
salaried employees in general. The amount
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of Executive's Base Salary shall not be changed through the Company's fiscal
year ending January 1999, and thereafter Executive's Base Salary hereunder shall
be subject to annual review by the Board, provided that the level of such Base
Salary shall not be subject to reduction.
3.2 Performance-Based Compensation. In addition to the Base Salary
provided for in Section 3.1 hereof, Executive shall be eligible to receive a
cash bonus in respect of each fiscal year during the Period of Employment (the
"Performance Bonus"). The Performance Bonus for any fiscal year shall be in an
amount equal to a percentage of his Base Salary and shall be determined by the
Company's Board of Directors based upon the Company's financial performance in
such fiscal year, with reference to a financial target (in terms of net income,
earnings per share or other measure) set by the Board as part of its annual
budgeting process.
4. BENEFITS.
During the Period of Employment, Executive shall be entitled to
participate in all benefit plans and programs maintained by the Company which
are available to its executive officers, including any and all perquisites,
provided that Executive's right to participate in such plans and programs shall
not affect the Company's right to amend or terminate the general applicability
of such plans and programs, and Executive acknowledges that he shall have no
vested rights under or to participate in any such plan or program except as
expressly provided under the terms thereof. Commencing on the Effective Date,
Executive shall be entitled to five (5) weeks of vacation annually (or such
greater amount as is provided to senior executives of the Company generally)
with carryovers in accordance with Company policy. Executive shall also be
entitled to the business and personal use of an automobile provided by the
Company, and the reimbursement of all expenses of operating and maintaining such
automobile. The Company shall provide Executive with office space, stenographic
assistance, and such other facilities and services as shall be suitable to
Executive's position and adequate for the performance of his duties hereunder.
5. EXPENSES; TAXES.
Upon presentation of acceptable substantiation therefor, the Company
will pay or reimburse Executive for such reasonable travel, entertainment and
other expenses as he may incur during the Period of Employment in connection
with the performance of his duties hereunder. Federal, state and local income
taxes shall be withheld on all cash and in-kind payments made by the Company to
Executive in accordance with applicable tax laws and regulations.
6. TERMINATION OF EMPLOYMENT.
The provisions of this Section 6 shall apply upon termination of
Executive's employment hereunder. In connection with any termination of
Executive's employment hereunder, Executive or his beneficiaries shall be
entitled to receive, prorated as appropriate, earned but unpaid Base Salary,
unreimbursed amounts pursuant to Section 5 hereof, and unpaid and unreimbursed
payments and benefits under, and in accordance with the terms of, applicable
benefit plans and programs, said payments being collectively referred to as
Standard Termination Payments.
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6.1 For Cause or Not for Good Reason. If the Company terminates
Executive's employment for Cause (as hereinafter defined) or if Executive
terminates his employment other than for Good Reason (as defined in Section
6.3), the Company's obligations to compensate Executive shall in all respects
cease as of the date of such termination, except for Standard Termination
Payments. Termination of Executive's employment for "Cause" shall mean
termination by the Company because Executive:
(i) has been convicted of a felony or a crime involving
moral turpitude, or
(ii) has used alcohol or drugs on an ongoing basis to an
extent that materially interferes with the
performance by Executive of his duties under this
Agreement, or
(iii) has embezzled or misappropriated Company funds or
property, or
(iv) has willfully and knowingly violated Section 7.1,
Section 7.2 or Section 7.3 hereof, or
(v) has willfully and continually failed to substantially
perform his duties hereunder (other than any such
failure resulting from mental or physical illness)
after written demand for substantial performance is
delivered by the Board which specifically identifies
the manner in which the Board believes Executive has
not substantially performed his duties and Executive
fails to cure his non-performance within fifteen (15)
business days of receiving such notice.
Notwithstanding the occurrence of any event listed in clauses (i)
through (v) above, Executive shall not be deemed to have been terminated for
Cause without (a) reasonable notice to Executive setting forth the reasons for
the Company's intention to terminate for Cause, (b) an opportunity for
Executive, together with his counsel, to be heard before the Board, and (c)
delivery to Executive of a notice of termination from the Board finding that, in
the good faith opinion of a majority of the Board (exclusive of Executive),
Executive was guilty of the conduct referred to in such notice.
6.2 Upon Death or Permanent Disability. If Executive's employment is
terminated as a result of death or Permanent Disability (as hereinafter
defined), the Company's obligation to compensate Executive shall in all respects
cease as of the date of such termination, except for Standard Termination
Payments including, without limitation, all disability benefits to which
Executive was entitled on the date of such termination, regardless of when such
benefits would be payable. The Company may terminate Executive's employment
hereunder attributable to the "Permanent Disability" of Executive if Executive
becomes physically or mentally incapacitated or disabled so that he is unable to
perform for the Company substantially the same services as he performed prior to
incurring such incapacity or disability (the Company, at its option and expense,
is entitled to retain a physician reasonably acceptable to Executive to confirm
the existence of such incapacity or disability, and the determination of such
physician shall be
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binding upon the Company and Executive), and such incapacity or disability
exists for an aggregate of six (6) calendar months in any twelve (12) calendar
month period.
6.3 Not For Cause or For Good Reason. If (i) Executive's employment is
terminated by the Company for a reason other than Cause, Executive's death or
Executive's Permanent Disability, or (ii) Executive terminates his employment
for Good Reason (as hereinafter defined), the Company's obligation to compensate
Executive shall in all respects cease as of the date of such termination, except
(a) for Standard Termination Payments, (b) that the Company will, for a period
of twelve (12) months following said date of termination, pay to Executive each
month an amount equal to Executive's Base Salary in effect at the time of such
termination divided by twelve (12), (c) that the Company will, at the time it
normally pays year-end bonuses to other employees based upon the Company's
performance in the prior fiscal year, pay to Executive with respect to the year
in which his employment terminated a prorated bonus based upon the number of
months in such fiscal year for which the Executive was employed multiplied by
the lower of the bonus Executive would have received if his employment had
continued throughout such year and the bonus that the Executive received for the
fiscal year immediately preceding the fiscal year in which his employment
terminated, and (d) that the Company will, for a period of twelve (12) months
following said date of termination, provide Executive with welfare benefits,
including any life insurance, hospitalization, medical and disability benefits,
substantially similar to those provided to Executive as of the date of
termination, provided that such benefits shall be discontinued to the extent
Executive receives similar benefits from subsequent employment. For purposes of
this Agreement, "Good Reason" shall exist if (x) a significant adverse change to
the employment responsibilities or authority of Executive occurs and is promptly
objected to by Executive in writing, (y) the Company shall fail to pay to
Executive or, if applicable, Executive's heirs any portion of his compensation
or benefits when due, and (z) the Company shall require Executive to be based at
any location outside of the greater Phoenix metropolitan area; provided that
Good Reason shall not exist unless Executive shall have first provided the
Company and the Board with written notice of the event identified in any of the
preceding clauses (x) through (z) and the Company shall have failed to remedy or
cure such event within fifteen (15) days following receipt of such notice.
6.4 Release and Satisfaction. At the time of termination of Executive's
employment, Executive and the Company agree to execute mutual releases whereby
(a) Executive will release, relinquish and forever discharge the Company and any
director, officer, employee, shareholder, controlling person or agent of the
Company from any and all claims, damages, losses, costs, expenses, liabilities
or obligations, whether known or unknown (other than any such claims, damages,
losses, costs, expenses, liabilities or obligations arising under (i) any
indemnification arrangement of the Company with respect to Executive, (ii) any
employee benefit plan or program (whether or not tax-qualified) covering
Executive, (iii) any stock purchase or stock option plan or agreement to which
the Company and Executive are parties (or any document executed in connection
therewith) or (iv) this Agreement, to the extent the Company or any such person
has continuing obligations pursuant to the express provisions hereof following
such termination), which Executive has incurred or suffered or may incur or
suffer as a result of Executive's employment by the Company or the termination
of such employment, and (b) the Company will release, relinquish and forever
discharge Executive and his heirs, successors and
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assigns from any and all claims, damages, losses, costs, expenses, liability or
obligations, whether known or unknown (except as set forth in Section 6.5 hereof
and other than any such claims, damages, losses, costs, expenses, liabilities or
obligations arising under any of the arrangements or agreements referred to in
clauses (i) through (iii) in the preceding clause (a) of this Section 6.4 or
under this Agreement to the extent Executive or any such person has continuing
obligations pursuant to the express provisions hereof following such
termination), which the Company has incurred or suffered or may incur or suffer
as a result of the Company's employment of Executive or the termination of such
employment.
6.5 Effect on This Agreement. The termination of Executive's employment
shall not affect the continuing operation and effect of Sections 6.4 and 7
hereof, nor affect any obligation to make payments pursuant to Section 6 hereof,
which shall continue in full force and effect upon the Company and Executive,
and its and his heirs, successors and assigns. Nothing in Section 6.1 or 6.4
hereof shall be deemed to operate or shall operate as a release, settlement or
discharge of any liability of Executive to the Company (a) from any act or
omission by Executive enumerated in Section 6.1 which constituted a reason for
termination of Executive's employment for Cause or (b) in connection with any
amount Executive owes to the Company pursuant to a loan or other advance.
6.6 Mitigation. Executive shall not be required to mitigate the amount
of any payment provided for under this Agreement by seeking other employment or
otherwise nor will any payments provided for herein be subject to offset in
respect of any claims which the Company may have against Executive and, except
as specifically provided herein, the amount of any payment or benefit provided
for in this Agreement shall not be reduced by any compensation earned or
benefits received by Executive as the result of employment by a future employer,
by offset against any amount claimed to be owed by him to the Company, or
otherwise.
7. NON-DISCLOSURE OF PROPRIETARY INFORMATION, SURRENDER OF RECORDS; INVENTIONS
AND PATENTS.
7.1 Proprietary Information. Executive agrees that he shall not use for
his own purpose or for the benefit of any person or entity other than the
Company or its shareholders or affiliates, nor otherwise disclose to any
individual or entity, at any time while he is employed by the Company or
thereafter any proprietary information of the Company unless such disclosure (a)
has been authorized by the Board, (b) is, in the good faith judgment of
Executive, required in the course of Executive's employment hereunder, (c) is in
the course of such individual's or entity's employment or retention by the
Company, or (d) is required by law, a court of competent jurisdiction, or a
governmental or regulatory agency. For purposes of this Agreement, the term
"proprietary information" shall mean: (a) the name or address of any customer,
supplier or affiliate of the Company, or any information concerning the
transactions or relations of any customer, supplier or affiliate of the Company
or any of its shareholders; (b) any information concerning any product,
technology or procedure employed by the Company, but not generally known to its
customers, suppliers or competitors, or under development by or being tested by
the Company, but not at the time offered generally to customers or suppliers;
(c) any information relating to the marketing methods, sales margins, discounts,
rebates, supplier incentives, or the
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like, the capital structure, or results of any business plan of the Company; (d)
any information contained in the Company's policies and procedures or employees'
manual; (e) any inventions, innovations, trade secrets or other items covered by
Section 7.3 below; and (f) any other information which the Board has determined
by resolution and communicated to Executive to be confidential or proprietary.
However, proprietary information shall not include any information that is or
becomes generally known to the industries in which the Company competes other
than through actions of Executive in violation of Section 7.1 or 7.2 hereof.
7.2 Confidentiality and Surrender of Records. Executive agrees that,
while he is employed by the Company or at any time thereafter, he shall not
except as required by law give any "confidential records" (as hereinafter
defined) to, or permit any inspection or copying of confidential records by, any
individual or entity other than in the course of such individual's or entity's
employment or retention by the Company or as required by law, a court of
competent jurisdiction, or a governmental or regulatory agency, nor shall he
retain any of the same following termination of this employment, without the
prior approval of the Board. For purposes hereof, "confidential records" means
all correspondence, memoranda, files, manuals, financial, operating or marketing
records, magnetic tape, or electronic or other media of any kind which may be in
Executive's possession or under his control or accessible to him which contain
any proprietary information as defined in Section 7.1 above.
7.3 Inventions and Patents. Executive agrees that all inventions,
innovations, trade secrets, patents and processes developed by him alone or in
conjunction with others at any time during his employment by the Company shall
belong to the Company. Executive will use his best efforts to perform all
actions reasonably requested by the Board to establish and confirm such
ownership by the Company.
7.4 Definition of Company. For purposes of this Section 7, the term
"Company" shall include the Company and any and all of its subsidiaries,
ventures or affiliates, whether currently existing or hereafter formed.
7.5 Enforcement. The parties hereto agree that the duration and area
for which the covenants set forth in Section 7 are to be effective are
reasonable. In the event that any court or arbitrator determines that the time
period or the area, or both of them, are unreasonable and that any of the
covenants are to that extent unenforceable, the parties hereto agree that such
covenants will remain in full force and effect, first, for the greatest time
period, and second, in the greatest geographical area that would not render them
unenforceable. The parties intend that this Agreement will be deemed to be a
series of separate covenants, one for each and every county of each and every
state of the United States of America. Executive agrees that damages are an
inadequate remedy for any breach of the covenants in this Section 7, and that
the Company will, whether or not it is pursuing any potential remedies at law,
be entitled to equitable relief in the form of preliminary and permanent
injunctions without bond or other security upon any actual or threatened breach
of this Agreement.
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8. MISCELLANEOUS.
8.1 Notice. Any notice required or permitted to be given hereunder
shall be deemed sufficiently given if sent by registered or certified mail,
postage prepaid, addressed to the addressee at his or its address last provided
the sender in writing by the addressee for purposes of receiving notices
hereunder or, unless or until such address shall be so furnished, to the address
indicated opposite his or its signature to this Agreement. Each party may also
provide notice by sending the other party a facsimile at a number provided by
such other party.
8.2 Modification and No Waiver of Breach. No waiver or modification of
this Agreement shall be binding unless it is in writing signed by the parties
hereto. No waiver by a party of a breach hereof by the other party shall be
deemed to constitute a waiver of a future breach, whether of a similar or
dissimilar nature, except to the extent specifically provided in any written
waiver under this Section 8.2.
8.3 Governing Law. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of New York, and all
questions relating to the validity and performance hereof and remedies hereunder
shall be determined in accordance with such law.
8.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same agreement.
8.5 Captions. The captions used herein are for ease of reference only
and shall not define or limit the provisions hereof.
8.6 Entire Agreement. This Agreement together with any agreement, plans
or other documents implementing the terms of this Agreement constitute the
entire agreement between the parties hereto relating to the matters encompassed
hereby and supersede any prior oral or written agreements.
8.7 Assignment. The rights of the Company under this Agreement may,
without the consent of Executive, be assigned by the Company, in its sole and
unfettered discretion, to any person, firm, corporation or other business entity
which at any time, whether by purchase, merger, or otherwise, directly or
indirectly, acquires all or substantially all of the stock, assets or business
of the Company.
8.8 Non-Transferability of Interest. None of the rights of Executive to
receive any form of compensation payable pursuant to this Agreement shall be
assignable or transferable except through a testamentary disposition or by the
laws of descent and distribution upon the death of Executive. Any attempted
assignment, transfer, conveyance, or other disposition (other than as aforesaid)
of any interest in the rights of Executive to receive any form of compensation
to be made by the Company pursuant to this Agreement shall be void.
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8.9 Arbitration. Any dispute arising under this Agreement shall be
resolved by binding arbitration conducted under the auspices and pursuant to the
rules of the American Arbitration Association and held in Phoenix, Arizona, or
such other place as the parties may mutually agree. Each party shall bear its or
his own costs and expenses in any such arbitration and one-half of the
arbitrator's fees and expenses.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first written above.
CSK AUTO, INC.
By:
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Name: Xxxxxxx Xxxxxxx
Title: Chairman and Chief Executive Officer
Address for Notices:
000 X. Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
With a copy to:
CSK Auto Corporation
c/o Investcorp International Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxxx Xxxxxxx
EXECUTIVE
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Xxxxx Xxxxxx
Address for Notices:
0000 X. Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
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