EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of October 1,
1996 by and between Xxxx X. Xxxx, an individual ("Executive"), and Aftermarket
Technology Corp., a Delaware corporation (the "Company").
WHEREAS, Executive and RPM Merit, Inc., a Delaware corporation
("RPM"), entered into that certain Employment Agreement dated July 29, 1994 (the
"Prior Agreement");
WHEREAS, contingent upon Executive's relocation to the Chicago,
Illinois area within three months of the relocation of the Company's
corporate offices to Chicago, Illinois, Executive and RPM desire to terminate
the Prior Agreement and Executive and the Company desire to enter into this
Agreement to replace the Prior Agreement;
WHEREAS, all things necessary to make this Agreement a valid, binding
and legal instrument have been performed;
NOW, THEREFORE, THIS AGREEMENT WITNESSETH: that in consideration of
the covenants and premises, receipt whereof is hereby acknowledged, Executive
and the Company hereby agree and provide:
1. EMPLOYMENT BY THE COMPANY AND TERM.
(a) FULL TIME AND BEST EFFORTS. Subject to the terms set forth
herein, the Company agrees to employ Executive as Chief Financial Officer and
Executive hereby accepts such employment. During the term of his employment
with the Company, Executive will devote his full time, best efforts and
attention to the performance of his duties hereunder and to the business and
affairs of the Company.
(b) DUTIES. Executive shall serve in an executive capacity and shall
perform such duties as are customarily associated with his then-current title,
consistent with the Bylaws of the Company and as required by the Company's Board
of Directors (the "Board") and the officers to whom the Executive reports,
including performing duties for such affiliates as the Board may specify.
(c) COMPANY POLICIES. The employment relationship between the
parties shall be governed by the general employment policies and practices of
the Company, including but not limited to those relating to protection of
confidential information and assignment of inventions, except that when the
terms of this Agreement differ from or are in conflict with the Company's
general employment policies or practices, this Agreement shall control.
(d) TERM. The initial term of employment of Executive under this
Agreement shall begin as of the date hereof and end on the third anniversary
hereof (such period, the "Initial Term"), subject to the provisions for
termination set forth herein and renewal as provided in Section 1(e) below
and subject to Section 9 below.
(e) RENEWAL. Unless the Company shall have given the Executive
notice that this Agreement shall not be renewed at least 90 days prior to
the end of the Initial Term,
the term of this Agreement shall be automatically extended for a period of
one year, such procedure to be followed in each such successive period. Each
extended term shall continue to be subject to the provisions for termination
set forth herein.
2. COMPENSATION AND BENEFITS.
(a) SALARY. Executive shall receive for services to be rendered
hereunder an annual base salary of $150,000 (the "Base Salary") payable on a
monthly basis, subject to increase at the sole discretion of the Board, and
subject to standard withholdings for taxes and social security and the like.
The Board shall review Executive's salary on an annual basis and
may, in its sole discretion, increase Executive's salary, taking into
consideration Executive's performance and scope of responsibilities.
(b) PARTICIPATION IN BENEFIT PLAN. During the term hereof, Executive
shall be entitled to participate in any group insurance, hospitalization,
medical, dental, health and accident, disability or similar plan or program of
the Company now existing or established hereafter to the extent that he is
eligible under the general provisions thereof. The Company may, in its sole
discretion and from time to time, establish additional senior management benefit
programs as it deems appropriate. Executive understands that any such plans may
be modified or eliminated in the Company's discretion in accordance with
applicable law.
(c) VACATION. Executive shall be entitled to a period of annual
vacation time equal to that provided to managers of equal position by the
Company's policies and procedures regarding vacation, but in any event not less
than four weeks per year. The days selected for Executive's vacation must be
mutually agreeable to the Company and Executive.
(d) LIFE INSURANCE. During the term hereof, the Company shall
procure and pay for a $250,000 life insurance policy covering Executive, for the
benefit of such beneficiaries as Executive shall designate.
(e) MOVING COSTS. The Company shall reimburse Executive for his
closing costs and household goods transfer costs incurred in connection with
moving his residence from Normandy Park to the Chicago area in accordance with
standard Company policy. Executive's home shall be turned over to a relocation
company. Executive is likewise entitled to two months' salary to cover all
other incidental moving costs. All costs for which the Executive is entitled to
reimbursement under this Section shall be documented in accordance with the
Company's expense reimbursement policies.
3. OPTION AND BONUS PLANS.
(a) PARTICIPATION. During the term hereof, Executive shall be
entitled to participate in any stock option plan (an "Option Plan") and any
bonus or incentive plan (a "Bonus Plan") of the Company currently made available
by the Company to executive employees of the Company or which may be made
available in the future to executive employees of the Company, subject to and on
a basis consistent with the terms, conditions and administration of any such
plan.
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Executive understands that any such plan may be modified or eliminated in
the Company's discretion in accordance with applicable law.
(b) BONUSES. If, among other matters, the Company achieves the
management budget to be adopted by the Company for a full fiscal year and
throughout such fiscal year Executive is employed pursuant to this Agreement,
the Board may, at its sole discretion, grant Executive a bonus with respect
to such year equal to 50% of his then annual base salary.
4. REASONABLE BUSINESS EXPENSES AND SUPPORT.
Executive shall be reimbursed for documented and reasonable business
expenses in connection with the performance of his duties hereunder. Executive
shall be furnished reasonable office space, assistance and facilities.
5. TERMINATION OF EMPLOYMENT. The date on which Executive's employment
by the Company ceases, under any of the following circumstances, shall be
defined herein as the "Termination Date."
(a) TERMINATION FOR CAUSE.
(i) TERMINATION; PAYMENT OF ACCRUED SALARY AND VACATION. The
Board may terminate Executive's employment with the Company at any time for
cause, immediately upon notice to Executive of the circumstances leading to such
termination for cause. In the event that Executive's employment is terminated
for cause, Executive shall receive payment for all accrued salary and vacation
time through the Termination Date, which in this event shall be the date upon
which notice of termination is given. The Company shall have no obligation to
pay severance of any kind nor to make any payment in lieu of notice.
(ii) DEFINITION OF CAUSE. "CAUSE" means the occurrence or
existence of any of the following with respect to Executive, as determined by
the Board at its sole discretion: (a) a material breach by the Executive of
the terms of his employment or of his duty not to engage in any transaction
that represents, directly or indirectly, self-dealing with the Company or any
of its affiliates which has not been approved by the Board, if in any such
case such material breach remains uncured after the lapse of 30 days
following the date that the Company has given the Executive written notice
thereof; (b) the repeated material breach by the Executive of any duty
referred to in clause (a) above as to which at least one written notice has
been given pursuant to such clause (a); (c) any act of dishonesty,
misappropriation, embezzlement, intentional fraud or similar conduct
involving the Company or any of its affiliates; (d) the conviction or the
plea of nolo contendere or the equivalent in respect of a felony involving
moral turpitude; (e) any intentional damage of a material nature to any
property of the Company or any of its affiliates; (f) the repeated
non-prescription use of any controlled substance or the repeated use of
alcohol or any other non-controlled substance which, in the reasonable
determination of the Board, in any case described in this clause (f), renders
the Executive unfit to serve in his capacity as an officer or employee of the
Company or its affiliates; or (g) conduct by the Executive which in the
reasonable
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determination of the Board demonstrates gross unfitness to serve in
his capacity as an officer or employee of the Company or its affiliates.
(b) VOLUNTARY TERMINATION. Executive may voluntarily terminate his
employment with the Company at any time upon 45 days prior written
notice, after which no further compensation of any kind or severance payment
will be payable under this Agreement.
(c) TERMINATION UPON DISABILITY. The Company may terminate
Executive's employment in the event Executive suffers a disability that renders
Executive unable to perform the essential functions of his position, even with
reasonable accommodation, for four months within any eight-month period.
After the Termination Date, which in this event shall be the date upon which
notice of termination is given, no further compensation will be payable under
this Agreement.
(d) TERMINATION WITHOUT CAUSE.
(i) TERMINATION PAYMENT DURING THE INITIAL TERM. The Company
may terminate Executives employment without "cause," as defined above,
immediately upon notice to Executive. In the event Executive's employment is
terminated without "cause," as defined above, the Company shall pay Executive
as severance an amount equivalent to his then base salary for a period of one
year, less standard withholdings for tax and social security purposes,
payable over such term in weekly PRO RATA payments commencing as of the
Termination Date plus any applicable PRO RATA earned bonus.
(ii) TERMINATION PERIOD AFTER THE INITIAL TERM. In the event
that the term of this Agreement is extended pursuant to Section 1(e) hereof
(an "Extension Period") and during such Extension Period Executive's
employment is terminated without "cause," as defined above, the Company shall
pay Executive as severance an amount equal to 12 months of his then base
salary, less standard withholdings for tax and social security purposes,
payable over such 12-month term in weekly PRO RATA payments commencing as of
the Termination Date.
(iii) FUNDAMENTAL CHANGES. In the event that the Company
makes a substantial change which results in diminution in the Executive's
duties, authority, responsibility or compensation without performance or market
justification, he may terminate his employment; PROVIDED, HOWEVER, that
Executive shall provide the Company 15 days' notice prior to any such
termination and the Company shall have until the end of such 15-day period to
cure such diminution. A termination in such circumstances shall be treated as a
Company termination without cause and Executive shall be entitled to the same
severance payments provided in Sections 5(d)(i) and 5(d)(ii), as applicable.
(e) BENEFITS UPON TERMINATION. All benefits provided under
Sections 2(b) and 2(d) hereof shall be extended, at the Company's election and
cost, to the extent permitted by the Company's insurance policies and benefit
plans, for one year after Executive's Termination Date, except (a) as required
by law (e.g., COBRA health insurance continuation election) or (b) in the event
of a termination described in Section 5(a).
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(f) TERMINATION UPON DEATH. If Executive dies prior to the
expiration of the term of this Agreement, the Company shall continue coverage of
Executive's dependents (if any) under all benefit plans or programs of the type
listed above in Section 2(b) herein for a period of 12 months.
6. PROPRIETARY INFORMATION OBLIGATIONS.
During the term of employment under this Agreement, Executive will
have access to and become acquainted with the Company's confidential and
proprietary information, including but not limited to information or plans
regarding the Company's customer relationships, personnel, or sales, marketing,
and financial operations and methods; trade secrets; formulas; devices; secret
inventions; processes; and other compilations of information, records, and
specifications (collectively "Proprietary Information"). Executive shall not
disclose any of the Company's Proprietary Information directly or indirectly, or
use it in any way, either during the term of this Agreement or at any time
thereafter, except as required in the course of his employment for the Company
or as authorized in writing by the Company. All files, records, documents,
computer-recorded information, drawings, specifications, equipment and similar
items relating to the business of the Company, whether prepared by Executive or
otherwise coming into his possession, shall remain the exclusive property of the
Company and shall not be removed from the premises of the Company under any
circumstances whatsoever without the prior written consent of the Company,
except when (and only for the period) necessary to carry out Executive's duties
hereunder, and if removed shall be immediately returned to the Company upon any
termination of his employment and no copies thereof shall be kept by Executive;
PROVIDED, HOWEVER, that Executive shall be entitled to retain documents
reasonably related to his interest as a shareholder and any documents that were
personally owned or acquired.
7. NONINTERFERENCE. While employed by the Company and for a period of
one year thereafter, Executive agrees not to interfere with the business of the
Company by directly or indirectly soliciting, attempting to solicit, inducing,
or otherwise causing any employee of the Company to terminate his or her
employment in order to become an employee, consultant or independent contractor
to or for any other employer.
8. NONCOMPETITION. Executive agrees that during the term of this
Agreement and for a period of 18 months after the termination hereof, he
will not, without the prior consent of the Company, directly or indirectly, have
an interest in, be employed by, be connected with, or have an interest in, as an
employee, consultant, officer, director, partner, stockholder or joint venturer,
in any person or entity owning, managing, controlling, operating or otherwise
participating or assisting in any business which is similar to or in competition
with the business of the Company (i) during the term of this Agreement, in any
location, and (ii) for the five year period following the termination of this
Agreement, in any state in which the Company was conducting business at the date
of termination of Executive's employment and continues to do so thereafter;
PROVIDED, HOWEVER, that the foregoing shall not prevent the Executive from being
a stockholder of less than 1% of the issued and outstanding securities of any
class of a corporation listed on a national securities exchange or designated as
national market system securities on an interdealer quotation system by the
National Association of Securities Dealers, Inc.
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9. RELOCATION REQUIREMENT. Upon execution of this Agreement, the
Prior Agreement shall be terminated and this Agreement shall replace the
Prior Agreement; PROVIDED, HOWEVER, that notwithstanding anything herein to
the contrary, if Executive shall not have relocated to the Chicago, Illinois
area within three months of the relocation of the Company's corporate offices
to Chicago, this Agreement shall be null and void and the Prior Agreement
shall be reinstated and shall thereafter remain in full force and effect.
10. MISCELLANEOUS.
(a) NOTICES. Any notices provided hereunder must be in writing and
shall be deemed effective upon the earlier of personal delivery (including
personal delivery by telecopy or telex) or the third day after mailing by first
class mail to the recipient at the address indicated below:
To the Company:
Aftermarket Technology Corp.
00000 Xxxxx Xxx Xxxxx
Xxxxx X-000
Xxxxxxx Xxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
To Executive:
Xxxx X. Xxxx
Aftermarket Technology Corp.
00000 Xxxxx Xxx Xxxxx
Xxxxx X-000
Xxxxxxx Xxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
or to such other address or to the attention of such other person as the
recipient party will have specified by prior written notice to the sending
party.
(b) SEVERABILITY. If any term or provision (or any portion thereof)
of this Agreement is determined by a court to be invalid, illegal or incapable
of being enforced by any rule of law or public policy, all other terms and
provisions (or other portions thereof) of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or provision (or
any portion thereof) is invalid, illegal or incapable of being enforced, this
Agreement shall be deemed to be modified so as to effect the original intent of
the parties as closely as possible to the end that the transactions contemplated
hereby and the terms and provisions hereof are fulfilled to the greatest extent
possible.
(c) ENTIRE AGREEMENT. This document constitutes the final, complete,
and exclusive embodiment of the entire agreement and understanding between the
parties related to the subject matter hereof and supersedes and preempts any
prior or contemporaneous understandings, agreements, or representations by or
between the parties, written or oral.
(d) COUNTERPARTS. This Agreement may be executed on separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
agreement.
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(e) SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors and assigns, except that Executive may not assign
any of his duties hereunder and he may not assign any of his rights hereunder
without the prior written consent of the Company.
(f) ATTORNEYS FEES. If any legal proceeding is necessary to enforce
or interpret the terms of this Agreement, or to recover damages for breach
therefore, the prevailing party shall be entitled to reasonable attorneys' fees,
as well as costs and disbursements, in addition to any other relief to which he
or it may be entitled.
(g) AMENDMENTS. No amendments or other modifications to this
Agreement may be made except by a writing signed by both parties. No amendment
or waiver of this Agreement requires the consent of any individual, partnership,
corporation or other entity not a party to this Agreement. Nothing in this
Agreement, express or implied, is intended to confer upon any third person any
rights or remedies under or by reason of this Agreement.
(h) CHOICE OF LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the internal
law, and not the law of conflicts, of the State of Illinois.
IN WITNESS WHEREOF, the parties have executed this agreement effective as
of the date it is last executed below by either party.
--------------------------
Xxxx X. Xxxx
AFTERMARKET TECHNOLOGY CORP.
----------------------------
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
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