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Exhibit 10.8
Xxxx 1995 10-K
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EMPLOYMENT AGREEMENT
This employment agreement (the "Agreement") is entered into as of the 2nd
day of May, 1995, by and between XXXX INDUSTRIES, INC. (the "Company") and
XXXXXXX X. XXXX ("Executive").
WHEREAS, the Company desires to employ the services of Executive, and
Executive desires to accept such employment, upon the terms set forth herein;
and
WHEREAS, prior to the date hereof, Executive was employed by Company as its
President and Chief Operating Officer and as Chief Executive Officer of its
Auto-Air Composites, Inc. subsidiary ("Auto-Air");
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, Executive and Company agree as follows:
1. EMPLOYMENT. Company hereby employs Executive its President and
Chief Operating Officer and in such other positions with the Company or its
subsidiary corporations as the Company's Board of Directors may from time to
time direct, and Executive hereby accepts such employment.
(a) DUTIES AND SERVICES. Executive agrees to serve Company and
to perform such services and duties as are appropriate to the capacities in
which he is employed. Executive agrees that he shall devote substantially all
of his working time, attention and efforts solely and exclusively to such
employment and will perform his duties and services faithfully, diligently and
to the best of his ability, and will use his very best efforts to promote the
interests of the Company. Executive shall report to the Board of Directors of
the Company or such other person or persons as the Board of Directors of the
Company shall authorize. Executive shall assist in preparation of budgets and
business strategic plans, assist in the preparation and implementation of and
be responsible for achievement of the Company's goals and objectives, and
perform such other services for the Company or its other subsidiaries as
directed by the Company's Board of Directors.
(b) ADHERENCE TO RULES AND LAWS. Executive specifically agrees
to support, implement and observe corporate policies and guidelines established
by the Company's Boards of Directors. Executive agrees to abide by all
applicable laws and governmental regulations relating to the Company's business
and to promote compliance therewith by employees, agents and representatives
under his direction and control. Executive acknowledges that he may be given
or have access to material nonpublic information with respect to the Company
and as such is subject to the restrictions imposed under the Securities and
Exchange Act of 1934 and other federal and state laws with respect to trading
in the Company's securities while in possession of such information, and with
respect to the disclosure of such information.
(c) EMPLOYMENT TERM. The term of Executive's active employment
shall commence on the date above first written and shall continue until his
resignation or termination by the Board of Directors (the "Employment Term").
(d) COMPENSATION. As the total compensation for services to be
rendered by Executive during the Employment Term in all capacities in which
employed, Company agrees to pay Executive, and Executive agrees to accept:
(i) BASE SALARY. An initial base salary (the "Base
Salary") of $168,000 per annum, payable in equal monthly
installments; said initial base salary to be reviewed annually by
the Board of Directors.
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(ii) INCENTIVE BONUS. In addition to Executive's Base
Salary, the Board of Directors of the Company shall annually
consider the payment of a bonus, not to exceed 50% of Executive's
Base Salary, to Executive, the amount of which, if any, shall be
determined by a quantitative incentive plan agreed to by Executive
and the Board of Directors.
(iii) OTHER BENEFITS.
A. Executive shall be entitled to participate
in group life insurance, medical and hospitalization plans and
pension plans, as such may be afforded by the Company or Auto-Air
generally to its officers and employees.
B. Company shall reimburse Executive in
accordance with its standard practice applicable to executive
officers for necessary and reasonable business expenses incurred by
Executive in performing his duties hereunder. In addition, Company
shall reimburse Executive for membership dues at one club or
country club of his choice in the Lansing, Michigan area.
C. During the Employment Term, Executive shall
be entitled to four weeks of vacation with full pay each year.
Vacation time must be taken at a time which does not unreasonably
interfere with the conduct of the Company's business. Vacation may
be accumulated by Executive, up to an aggregate of eight weeks, to
be taken in future years, but is the intent of the Company that
Executive take not less than two weeks of vacation in each year.
D. Company shall provide to Executive, an
American automobile suitable to his position and an automobile
allowance for actual expenses incurred in connection therewith.
Executive shall be entitled to a new automobile every three years.
2. STOCK OPTIONS. Executive shall be eligible to receive such option
awards as may be provided from time to time by the Company's Board of Directors
or the Compensation Committee thereof.
3. RESTRICTIVE COVENANTS AND CONFIDENTIALITY. As a condition to the
performance by Company of its obligations hereunder:
(a) Executive shall, during the Employment Term, promptly
advise the Board of Directors of any business opportunity ("Business
Opportunity") of which he becomes aware. Business Opportunity means any
person, corporation or other entity which requires or is seeking to acquire
services, goods, materials or products of the nature provided by the Company or
any of its subsidiaries; any potential acquisitions of other businesses or
entities or assets; or any inquiries concerning acquisition of the Company, or
any of its subsidiaries, divisions, or assets.
(b) Executive agrees that at all times during the Employment
Term and for two years thereafter he will not directly or indirectly, through
any person, corporation or other entity (whether as an employee, officer,
director, consultant or otherwise), (i) in any manner solicit business from or
divert from the Company or any of its subsidiaries the business of any client
or customer of Company or any of its subsidiaries which was a client or
customer, or which was identified by the Company or any of its subsidiaries as
a prospective client or customer, during the Employment Term; nor (ii) solicit,
entice or induce any person who is or shall be an employee or officer of the
Company or any of its subsidiaries to become employed by any other person,
corporation or entity; provided, however, that after the termination of his
employment with the Company, Executive may engage in any business activity
unrelated to the business activities of the Company or its subsidiaries.
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(c) Because the Company and Auto-Air have utilized and the
Company and its subsidiaries will, during the Employment Term, utilize the
services of Executive in areas of responsibility involving trust and
confidence, and because Executive will from time to time obtain knowledge with
respect to the conduct of the business of the Company or its subsidiaries and
with respect to the clients and customers of the Company and its subsidiaries
which is not generally known in the trade or industry in which the Company, its
subsidiaries, client or customers, as the case may be, are engaged or which the
Company may deem confidential and proprietary, Executive agrees that at all
times during the Employment Term and after the termination of his employment
relationship with Company, he will take such reasonable steps as are necessary
to maintain the confidentiality of such information and that he will not,
unless authorized by Company in writing, directly or indirectly disclose to, or
for the benefit of, any other person, firm or corporation any information of
any kind concerning any matters affecting or relating to the business of the
Company, its subsidiaries, clients and customers, including, without
limitation, information concerning the business of the Company, its
subsidiaries, customers, manner of operation, plans, procedures or other data
of any kind or nature. The parties hereto stipulate that such information is
(i) material to the conduct of the business of the Company and its
subsidiaries, (ii) confidential, and (iii) proprietary to the Company, and that
disclosure of such information would have a serious adverse effect on the
effective and successful conduct of the business and good will of the Company
and its subsidiaries. All documents, records and copies thereof regarding the
operations or business of the Company or its subsidiaries, whether prepared by
Executive or others, and all information which might be given to Executive or
to which he has access in the course of his employment, are and shall remain
the exclusive property of the Company. Any documents in Executive's possession
upon termination of employment shall be delivered immediately to the Company.
(d) Executive further agrees that he shall not, during his
Employment Term, nor within one year after termination of his employment with
Company, without the prior written approval of Company's Board of Directors,
directly or indirectly, through any person, firm or corporation (whether as an
employee, officer, director, consultant or otherwise), (i) except in the event
of termination by the Company under Paragraph 4(a), have any financial interest
in or render any services to any person, firm or corporation (other than
another subsidiary of Company) in competition with Company or any of its
subsidiaries in any region in which business is conducted by Company or any of
its subsidiaries during Employment Term; nor (ii) render services to any
Business Opportunity of which he has learned (A) during the Employment Term
unless he shall have advised Company of such Business Opportunity in accordance
with subsection (a) of this paragraph 3.
4. TERMINATION OF EMPLOYMENT.
(a) TERMINATION WITHOUT CAUSE. Executive's employment
hereunder may be terminated for any reason at any time upon the giving of six
months written notice by Executive or one year's written notice by the Company.
In the event that notice is given by either party, Company may elect to
terminate Executive's duties and functions with the Company and its
subsidiaries before the expiration of the notice, but will be obligated to pay
the benefits provided in paragraph 1 until the end of the notice period.
(b) TERMINATION FOR CAUSE, DEATH OR DISABILITY. Executive's
employment hereunder may be terminated immediately by Company for "Cause" and
shall terminate on the date of occurrence in the event of the death or
"Disability" of Executive. Such termination shall be subject to the following
terms:
(i) In the event Executive's employment is terminated
by Company for "Cause," Executive shall be paid his Base Salary
until the date of termination and all other benefits (except any as
may be required by law with respect to medical insurance coverage)
shall thereupon cease.
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(ii) In the event Executive dies or is disabled and
unable to perform services for Company, he or his personal
representative shall be paid his Base Salary and benefits through
the Employment Term and for six months thereafter.
As used in this Agreement, the term "Cause" shall mean material
theft from Company or its subsidiaries; substantial and continuing willful
failure to perform Executive's duties; violation of a material provision of this
Agreement; or intention and material misrepresentation to the Board of
Directors. As used in this Agreement, "Disability" shall mean a physical or
mental illness, injury, incompetency or incapacity, which renders Executive
incapable of fully performing the services required of Executive as an executive
of Company and which does or may be expected to continue during the remainder of
his life. Determination of Disability and the date upon which it shall be
deemed to have occurred shall be made by a physician who is acceptable to both
Company and Executive. Such determination shall be binding on all parties to
this Agreement. In the event Company and Executive do not agree upon a
physician, they shall each name a physician and the two physicians shall name a
third physician who shall conduct the examination and make the determination as
to whether Executive suffered a disability.
5. ASSIGNABILITY OF BINDING EFFECT; CHANGE OF CONTROL.
(a) This Agreement shall inure to the benefit of and shall be
binding upon the heirs, executors, administrators, successors and legal
representatives of Executive, and shall inure to the benefit of and be binding
upon Company and its successors and assigns, including any successor to
substantially all of the assets and business of Company as a going concern.
The provisions of Section 3 of this Agreement shall survive termination of this
Agreement for the periods set forth herein and shall be specifically
enforceable by any successor or assign of the Company. Neither Executive's
rights under this Agreement nor the obligations of Executive hereunder may be
delegated or assigned.
(b) In the event that there is a change of control (as
hereinafter defined) of the Company on any date subsequent to May 2, 1995, and
the employment of Executive by the Company is terminated within one year of the
change of control for any reason, including termination without cause,
termination for cause, death disability or voluntary resignation, Executive
shall be paid an amount equal to his compensation from the Company for the
preceding year, including any bonus, insurance and other benefits. Except as
to a person who was a beneficial owner of at least 20% of the Company's
outstanding common stock on May 2, 1995, the term "change of control" as used
herein means the acquisition by any person or group of beneficial ownership of
more than 30% of the Company's outstanding common stock (or, if the Company
shall have outstanding more than one class of equity securities, an aggregate
of 30% of the voting securities of the Company). For purposes of determining
the definition of person, group, and beneficial ownership, the provisions of
Rule 13(d)-3 under the Securities and Exchange Act of 1934 shall apply.
6. ENTIRE AGREEMENT. This Agreement constitutes the complete
understanding between Company and Executive with respect to the subject matter
hereof, and no statement, representation, warranty or covenant has been made by
either party except as expressly set forth herein. This Agreement may not be
altered, modified or amended except by written instruments signed by each of
the parties hereto. No waiver of any term or provision hereof shall be
effective unless made in a writing signed by the party against whom enforcement
of the waiver is sought. No waiver of any term or provision of this Agreement
shall be deemed to be a waiver of any subsequent breach of such term or
provision, or the breach of any other term or provision hereof.
7. SEVERABILITY. If any provision of this Agreement or any part
thereof is invalid, unlawful or incapable of being enforced, by reason of any
rule of law or public policy, all conditions and provisions of this Agreement
shall nevertheless remain in full force and effect.
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8. WARRANTY. Executive warrants and represents that he is not a party
to any agreement, contract or understanding which would in any way restrict or
prohibit him from undertaking or performing employment in accordance with the
terms and conditions of this Agreement.
9. GOVERNING LAW. This Agreement shall be
governed by, construed in accordance with, and enforced under the laws of
the State of Michigan.
10. NOTICES. All communications or notices required or permitted by
this Agreement shall be in writing and shall be deemed to have been given at
the earlier of the date when actually delivered to the persons named below or
when deposited in the United States mail, certified or registered mail, postage
prepaid, return receipt requested, and addressed as follows, unless either of
the parties hereto notify the other in accordance with this section of a change
of address:
If to the Company: Xxxx Industries, Inc.
Attn: Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
With Copy To: Xxxxxxx & Xxxxx
Attn: Xxxxxx X. Xxxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
If to Executive: Xxxxxxx X. Xxxx
Xxxx Industries, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date above first written.
XXXX INDUSTRIES, INC.
By:
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Xxxxxxx X. Xxxxxxx, Chairman
of the Board of Directors
XXXXXXX X. XXXX
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