EXHIBIT 10.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Agreement") is made
and entered into as of the 1st day of October, 1996, by and between KEVCO, INC.,
a Texas Corporation (the "Employer") and XXXXXX X. XXXXXX (the "Employee");
WITNESSETH;
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WHEREAS, Employer is engaged, through its subsidiaries, in the wholesale
distribution of building products primarily to the manufactured housing and
recreational vehicle industries, in the manufacture and distribution of wood
products to the manufactured housing industry, and in providing services
ancillary and incidental thereto (collectively the "Employer's Business");
WHEREAS, Employee is experienced and qualified to perform duties connected
and associated with Employer's Business; and
WHEREAS, Employer and Employee wish to amend and restate in its entirety
that certain Employment Agreement dated May 31, 1991 as thereafter amended on
December 16, 1994 (collectively the "Prior Agreement") by entering into this
Agreement;
NOW, THEREFORE, IN CONSIDERATION of the premises and the covenants and
agreements contained herein, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto have agreed and hereby agree that the Prior
Agreement is hereby amended and restated in its entirety to read as follows:
1. Employment. Employer hereby employs the Employee and Employee hereby
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accepts such employment upon the terms and conditions hereinafter set forth.
2. Term of Employment. Employee's term of employment under this Agreement
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shall begin on the effective date of this Agreement as hereinafter provided and
shall, subject to early termination as hereinafter set forth in this
AMENDED AND RESTATED EMPLOYMENT AGREEMENT - Page 1
Agreement, continue for a term of five (5) years; provided, however, that
unless sooner terminated as provided herein, on each anniversary date of the
effective date of this Agreement, an additional period of one year shall be
added to the term of employment provided for herein, it being the intention of
the parties that the term of this Agreement shall always be five (5) years in
duration.
3. Duties of Employee. For the term provided in Paragraph 2 of this
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Agreement (subject to earlier termination as hereinafter provided), Employee
shall be employed as chairman of the board, president and chief executive
officer of Employer and Kevco Delaware, Inc. ("Delaware"), and as chairman of
the board and chief executive officer of Sunbelt Wood Components, Inc.
("Sunbelt"). Employee shall perform such duties and services on behalf of
Employer and each of its subsidiaries as is customarily performed by persons
holding the same or similar offices in other public companies.
4. Place of Employment. The duties to be performed by Employee shall be
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performed at the offices of Employer, located in Fort Worth, Texas and at such
other locations on a temporary nature as Employee may from time to time
determine or require as necessary for the performance of his duties hereunder.
5. Time Requirements. Employee shall devote such time and attention to
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Employer's Business during the term of this Agreement as Employee shall
reasonably determine is necessary for the carrying out of his duties hereunder;
provided, however, that Employee shall not be required to devote his entire
productive time, ability and attention to the business of Employer and in such
regard may devote a portion of his time, attention and abilities to other
businesses or activities in which Employee may be engaged of a business,
commercial or professional nature, whether for or without profit, and whether
for compensation or otherwise.
6. Conduct Requirements. Employee shall, at all times during the term of
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this Agreement, conduct himself in such a manner so as to reflect credit to
Employer and its subsidiaries and shall not do or perform any acts in his
capacity as an employee of Employer which shall cause Employer to suffer loss of
reputation or embarrassment.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT - Page 2
7. Compensation. Effective as of the effective date of this Agreement,
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Employer shall pay to Employee as compensation during the term of this
Employment Agreement (unless this Agreement is earlier terminated as hereinafter
provided) the following compensation:
(a) Salary. During the term of this Agreement, Employee shall
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receive an annual salary of $250,000, subject to mandatory deductions and
withholdings as required by law, payable each weekly payroll period in an amount
equal to $4,807.69, figured to and prorated for any partial employment period.
Employee's salary shall be reviewed by Employer's Compensation Committee no less
often than annually and may be increased (but not decreased) from time to time
in such amounts as the Compensation Committee shall determine. Any increases in
salary shall be reflected upon the "Schedule of Compensation" attached hereto
and made a part hereof. Any change in regular annual compensation shall be
effective as of the date it is entered on said schedule, initialled by the
proper officers of Employer and initialled by Employee.
(b) Bonus. Employee shall be entitled to receive an annual performance
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bonus for each fiscal year of Employer, beginning January 1, 1997, in an amount
equal to 2.4% of the Pre-Tax Income of Employer for each such fiscal year,
provided the Pre-Tax Income of Employer for such fiscal year is at least
$5,000,000. Each such bonus shall be subject to mandatory deductions and
withholdings as required by law and may be paid in installments in advance from
time to time based upon the Pre-Tax Income of Employer as of any applicable date
and the estimated Pre-Tax Income for the balance of such fiscal year. In the
event it is ultimately determined that the aggregate bonus prepaid to Employee
during any fiscal year exceeds the bonus to which Employee would have been
entitled based upon the Pre-Tax Income of the Employer for the entire fiscal
year, such excess amount actually received by Employee shall be deducted from
any bonus to which Employee would be entitled in the next succeeding fiscal year
or years of Employer. Employer's Compensation Committee shall review and
consider an increase in such performance bonus for Employee no less often than
annually, and in any event, not later than ninety (90) days after the beginning
of the fiscal year and shall otherwise comply with the provisions of Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), it being
the intention of the parties that the provisions hereof with respect to
Employee's performance-based bonus compensation shall be interpreted and
construed in such a manner so as to comply with Section 162(m) of the Code and
the rules and regulations promulgated
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thereunder. Any change in the performance bonus granted to Employee shall be
reflected upon the "Schedule of Compensation" attached hereto and made a part
hereof. Any change in such performance bonus shall be effective as of the date
indicated on such Schedule. As used herein, the term "Pre-Tax Income" shall
mean the net income of Employer and its subsidiaries on a consolidated basis
from all sources before all applicable federal and state income taxes and before
any deduction or accrual for Employee's bonus, and including any extraordinary
income, gains or other credits, computed in accordance with generally accepted
accounting principles applied on a basis consistent with that of prior periods.
8. Employee Benefits. For the periods set forth in this Paragraph 8,
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Employee shall be entitled to the following benefits:
(a) Medical and Dental Benefits. Until the death of the survivor of
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Employee and Employee's spouse (the "Coverage Term"), Employer shall use its
best efforts to include (i) Employee, (ii) Employee's spouse, and (iii) other
dependents [(ii) and (iii) being collectively referred to as the "Family")] in
all present and future group health, medical, dental, hospitalization and
similar programs offered by Employer and its subsidiaries to their respective
employees generally (collectively the "Insurance Coverage"). Employer covenants
and agrees to use its best efforts to cause its current and all future Insurance
Coverage to include retired employees (as defined in such Insurance Coverage)
(and their spouses), of Employer and its subsidiaries. For such purposes,
Employee, by definition, upon his retirement, shall be considered a "retired
employee" of Employer and its subsidiaries. The Employer shall bear all costs
and expenses of the Insurance Coverage for Employee and the Family. Employer
shall not take any action, or fail to take any action, the effect or result of
which would be to exclude or otherwise disqualify Employee or any of the Family
from inclusion in the Insurance Coverage. If Employee or any of the Family
cannot be included in or covered by the Insurance Coverage or if there is no
Insurance Coverage or to the extent there is no Insurance Coverage, the Employer
shall obtain for Employee or the affected members of the Family and shall keep
in full force and effect during the Coverage Term, comparable or additional
coverage for such persons; provided, however, if any of such coverage is not
available or to the extent any of such coverage is not available, Employer
shall, at its sole cost and expense, pay, or reimburse Employee and the affected
members of the Family for, all health, medical, dental, hospitalization,
deductibles and other similar costs and expenses (collectively the "Health
Costs") incurred or sustained by such persons
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during the Coverage Term not covered by or paid for by the Insurance Coverage or
such other coverage, including the insurance premiums for the Insurance Coverage
or other coverage. In determining whether coverage is "comparable coverage" the
following factors, among others, shall be considered relevant: quality of care,
freedom to select facilities, physicians and other health care providers,
relative financial responsibility of insured and insurer to cover Health Costs,
benefits and illnesses covered by applicable insurance, and ease of obtaining
health care provider services.
If Employer desires to sell to a third party all or substantially all of
the assets of Employer, Employer covenants and agrees to and with Employee to
cause such third party to assume the obligations set forth in this Paragraph
8(a), but any such assumption shall not relieve Employer of its obligations
hereunder.
(b) Other Benefits Plans. Employee, during the term of this Employment
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Agreement, shall be included in the Health and Accident Plan and in the
Investment and Tax Advice Plan previously adopted by Employer or its
subsidiaries, as well as shall be eligible to be included in any profit sharing,
pension, deferred compensation or other benefit plans of Employer or its
subsidiaries, including group term life insurance, as may be adopted by Employer
for all or any portion of its employees, including its key employees, from time
to time during the term of this Employment Agreement. The costs of
participating in any of such benefit plans shall be borne as provided in rules
and regulations adopted by Employer or its subsidiaries from time to time
dealing with any of such plans.
It is agreed and understood that there shall be no obligation on the part
of Employer or its subsidiaries to provide for the participation of the Employee
in, or to institute, any such plan or plans or to make any contribution or
contributions thereunder other than the Health and Accident Plan and the
Investment and Tax Advice Plan hereinabove described.
(c) Vacation and Holidays. Employee shall be entitled to thirty (30)
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days vacation with pay (or such greater length of time as may be approved from
time to time by the board of directors of Employer) during each fiscal year of
Employer, such vacation to be taken by Employee at such time or times as shall
be approved by the board of directors. In addition, Employee shall be entitled
to
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such holidays as the board of directors may approve. Unused vacation days may
not be carried over from one fiscal year to another.
9. Business Expenses. Employee shall be entitled to receive reimbursement
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for, or payment directly by the Company of, all reasonable expenses incurred by
Employee in the performance of his duties under this Agreement, provided that
the Employee accounts therefor in writing pursuant to Section 274 of the
Internal Revenue Code of 1986, as amended (the "Code"), that such expenses are
ordinary and necessary business expenses of Employer within the meaning of
Section 162 of the Code.
10. Termination. Except for the obligations of Employer set forth in
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Paragraphs 8(a) and 10(a) hereof, which obligations shall remain in full force
and effect as provided therein, this Agreement shall terminate earlier than
provided in Paragraph 2 hereof upon the first to occur of any of the following:
(a) Death. In the event Employee shall die during the term of this
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Employment Agreement, then and in such event, Employer shall continue to pay to
the executors, administrators or other legal representatives of Employee the
then salary being paid to Employee pursuant to Paragraph 7(a) for the balance of
the then existing term of this Agreement the same as if Employee had not died.
(b) Termination for Cause. This Agreement and Employee's employment by
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Employer may be terminated by Employer for cause. As used herein, the term "for
cause" shall mean (i) Employee willfully breaching or habitually neglecting the
duties he is required to perform under the terms of this Agreement, or (ii)
Employee being adjudicated a bankrupt, or (iii) Employee making an assignment of
his assets for the benefit of creditors, or (iv) Employee breaching the
provisions of Paragraphs 12 or 13 of this Agreement.
(c) Involuntary Termination Without Cause. This Employment Agreement
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and Employee's employment by Employer may not be terminated by Employer without
cause.
(d) Early Termination by Employee. If Employee resigns or otherwise
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terminates his employment with Employer (and all offices and duties with its
subsidiaries) prior to the expiration of the term provided in Paragraph 2
hereof, Employee shall forfeit and shall not be entitled to receive any
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compensation or other amounts from Employer whatsoever except any salary and
bonus earned by him prior to the date of termination as provided for in this
Agreement. Any termination pursuant to this Paragraph 10(d) shall not limit any
right or remedy that Employer may have against Employee.
11. Status of Agreement. The benefits or payments made under this
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Employment Agreement shall be independent of and in addition to those under any
other agreement which may be in effect between the parties hereto or any other
compensation payable to Employee or his designees or estate by the Employer and
unless specifically referred to herein or unless otherwise provided by agreement
or law, nothing contained herein shall be deemed to exclude Employee from any
pension, profit-sharing, insurance or other benefits to which he may otherwise
be or might become entitled as an employee of Employer.
12. Engaging in Other Employment. Employee covenants and agrees that,
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without the prior written consent of Employer, Employee shall not, during the
term of this Employment Agreement, directly or indirectly, either as an
employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director or in any other individual or representative
capacity, engage or participate in any business that is in competition in any
manner whatsoever with Employer's Business or take any action inconsistent with
the fiduciary relationship of an employee to his employer.
13. Trade Secrets. All non-public information relating to Employer's
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Business, including but not limited to the identity of its customers and
suppliers, its arrangements with such suppliers and customers and data relating
to its products and services, shall be treated as confidential by Employee, both
during and after the termination of Employee's employment. Except with the
prior approval of Employer, Employee shall not disclose any of such information
at any time to any persons, firms, corporations, partnerships, associations or
other legal entities except authorized personnel of Employer or any subsidiary
of Employer. In the event of a breach or threatened breach by Employee of the
provisions of this Paragraph 13, Employer shall, in addition to any other
available remedies, be entitled to an injunction restraining Employee from
disclosing, in whole or in part, any such information or from rendering any
services to any person, firm, corporation, partnership, association or other
legal entity to whom any such information may have been disclosed or is
threatened to be disclosed.
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14. Miscellaneous Provisions.
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(a) Notice. All notices, demands, changes of address, requests or
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other communications that may be or are required to be given, served or sent by
any party to any other party pursuant to this Agreement shall be in writing and
shall be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by hand delivery or telegram,
telephonic facsimile or other electronic process.
(b) Governing Law. This Agreement is being executed and delivered in
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Tarrant County, Texas. This Agreement shall be subject to, governed by and
construed in accordance with federal law and the internal substantive laws, not
the law of conflicts, of the State of Texas.
(c) Captions. The captions used herein are for administrative and
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convenience purpose only and shall not be construed in interpreting this
Agreement.
(d) Gender. Whenever the context so requires, the masculine shall
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include the feminine and neuter, and the singular shall include the plural, and
conversely.
(e) Legal Construction. If any portion of this Agreement shall be
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held invalid or inoperative, then so far as reasonable and possible (i) the
remainder of this Agreement shall be considered valid and operative, and (ii)
effect shall be given to the intent manifested by the portion held invalid or
inoperative.
(f) Amendments. This Agreement may be amended from time to time by an
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instrument in writing signed by all those who are parties to this Agreement at
the time of such amendment, such instrument being designated on its face as an
"Amendment" to this Agreement.
(g) Waiver. The failure of any party to insist in one or more
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instances upon the performance of any of the terms or conditions of this
Agreement shall not be construed as a waiver or relinquishment of any right
granted hereunder or of the future performance of any such term of condition,
but the obligations of any party with respect thereto shall continue in full
force and effect.
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(h) Counterparts. This Agreement may be executed in several
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
(i) Remedies. Each party hereto acknowledges that a remedy at law
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for any breach or attempted breach of this Agreement will be inadequate, agrees
that each other party hereto shall be entitled to specific performance and
injunctive and other equitable relief in case of any such breach or attempted
breach and further agrees to waive any requirement for securing or posting of
any bond in connection with the obtaining of any such injunctive or other
equitable relief. Such remedy shall be cumulative and not exclusive and shall be
in addition to any other rights or remedies any party may have against the
other.
(j) Attorneys' Fees. If any action at law or in equity, or any
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arbitration or mediation proceeding, including any action for injunctive or
declaratory relief, is brought to enforce or interpret any of the provisions of
this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and expenses from the other party, which fees and expenses may
be set by the court or other trier in the trial of such action or may be
enforced in a separate action brought for that purpose and which fees and
expenses shall be in addition to any other relief which may be awarded.
(k) Prior Agreement. This Agreement contains the entire agreement
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between the parties hereto and supersedes any and all prior agreements, whether
written or oral, including the Prior Agreement, between the parties with respect
to the within subject matter.
15. Mediation; Arbitration. If at any time a dispute or controversy
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should arise between Employer and Employee (the "Contestants") with respect to
an interpretation or the enforceability of any of the provisions of this
Agreement or with respect to any of the covenants or agreements contained in
this Agreement, the Contestants shall meet in the Dallas-Fort Worth metropolitan
area at a mutually agreed upon time and place within thirty (30) days of the
receipt of notice by any Contestant from any other Contestant (the "Initial
Notice") to meet to attempt to settle such dispute or controversy. If, as a
result of such meeting or any mutually agreed subsequent meetings held within
thirty (30) days thereafter, the Contestants are unable or unwilling to agree on
an appropriate resolution of such dispute or controversy, then and in such event
such dispute or controversy shall be submitted
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by the parties to binding arbitration to be conducted before a panel of
arbitrators in the Dallas-Fort Worth metropolitan area in accordance with the
Texas Rules of Civil Procedure and unless inconsistent, the Commercial
Arbitration Rules of the American Arbitration Association (or any successor
organization thereto) as then in effect. Any arbitration decision shall be
final and conclusive upon the Contestants, it being expressly agreed and
understood by the Contestants that any specific issue or issues relating to
disputes so determined shall not be the subject of any further dispute among the
Contestants or the subject of any further arbitration under this Paragraph 15.
The arbitrator's award in any such arbitration shall be final and binding and a
judgment upon such award may be enforced by any court of competent jurisdiction.
The expenses of such arbitration, including the fees of the arbitrators, shall
be borne equally between the Contestants unless otherwise specified in the
award. Each Contestant shall pay the fees and expenses of its own witnesses.
The prevailing Contestant shall be entitled to recover its attorneys' fees and
expenses unless otherwise specified in the award.
16. Time is of the Essence. Time shall be of the essence throughout the
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term of this Employment Agreement.
17. Effective Date. The effective date of this Agreement is October 1,
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1996.
18. Binding Effect. This Agreement shall be binding upon and inure to
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the benefit of the parties hereto and their heirs, executors, administrators,
successors, receivers, trustees, legal representatives, and permitted assigns
but is not assignable by either Employer or Employee without the prior written
consent of the party effected thereby.
19. Joinder. Employer covenants and agrees that, upon the organization of
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Delaware and Sunbelt, Employer will cause Delaware and Sunbelt to join in this
Agreement for the express purpose of jointly and severally making each of the
covenants, agreements and obligations of Employer set forth in this Agreement,
the same as if Delaware and Sunbelt were Employer hereunder; provided, however,
that such joinder is not meant to cause either Delaware or Sunbelt to duplicate
any compensation or benefits paid to Employee by Employer. The employment of
Employee is deemed to be necessary or convenient to the conduct, promotion or
attainment of the business of Delaware and Sunbelt and is in the best interest
of Delaware and Sunbelt.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written, effective the Effective Date.
EMPLOYER:
KEVCO, INC.,
A TEXAS CORPORATION
By:___________________________________
Its:_______________________________
Address: 0000 Xx. Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxx, Xx. 76107
EMPLOYEE:
______________________________________
______________________________________
XXXXXX X. XXXXXX
Address: 0000 Xxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxx 00000
JOINED IN BY:
DELAWARE:
KEVCO DELAWARE, INC.,
A DELAWARE CORPORATION
By:_________________________________
Its _____________________________
Address: 0000 Xx. Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxx 00000
AMENDED AND RESTATED EMPLOYMENT AGREEMENT - Page 11
SUNBELT:
SUNBELT WOOD COMPONENTS, INC.,
A DELAWARE CORPORATION
By:_________________________________
Its _____________________________
Address: 0000 Xx. Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxx 00000
AMENDED AND RESTATED EMPLOYMENT AGREEMENT - Page 12
