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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into as of and
effective May ___, 1997 by and between AUTOMOTIVE ONE PARTS STORES, INC., a
Florida corporation (the "Company"), and XXXXXX X. XXXXXX, III (hereinafter
called the "Executive").
RECITALS
A. The Executive is currently employed as the Chief Executive Officer and
President of the Company.
B. The Executive possesses intimate knowledge of the business and affairs
of the Company, its policies, methods and personnel.
C. The Board of Directors of the Company recognizes that the Executive
has contributed to the growth and success of the Company, and it is in the best
interest of the Company to enter into an employment agreement with Executive.
D. The Board has determined that this Agreement will reinforce and
encourage the Executive's continued attention and dedication to the Company.
E. The Executive is willing to make his services available to the Company
and on the terms and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties agree as follows:
1. Employment.
1.1 Employment and Term. The Company hereby agrees to employ the
Executive and the Executive hereby agrees to serve the Company on the terms and
conditions set forth herein.
1.2 Duties of Executive. During the term of this Agreement, the
Executive shall serve as President and Chief Executive Officer of the Company,
shall diligently perform all services as may be assigned to him by the Board
(provided that, such services shall not materially differ from the services
currently provided by Executive), and shall exercise such power and authority
as may from time to time be delegated to him by the Board. The Executive shall
devote his full time and attention to the business and affairs of the Company,
render such services to the best of his ability, and use his best efforts to
promote the interests of the Company.
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2. Term.
2.1 Initial Term. The initial term of this Agreement, and the
employment of the Executive hereunder, shall commence on May 1, 1997 (the
"Commencement Date") and shall expire on May 2, 2002, unless sooner terminated
in accordance with the terms and conditions hereof (the "Initial Term").
2.2 Renewal Terms. At the end of the Initial Term, this Agreement
shall automatically renew for successive one year terms, subject to earlier
termination of this Agreement as provided herein.
2.3 Expiration Date. The date on which the term of this Agreement
shall expire (including the date on which any renewal term shall expire), is
sometimes referred to in this Agreement as the Expiration Date.
3. Compensation.
3.1 Base Salary. The Executive shall receive a base salary (the "Base
Salary") during each year of the Initial Term, payable in installments
consistent with the Company's normal payroll schedule and subject to applicable
withholding and other taxes, in the following amounts:
(i) $80,000/year during year 1; and
(ii) $100,000/year during years 2 and 3; and
(iii) $120,000/year during years 4 and 5.
The Base Salary also shall be reviewed, at least annually, for merit increases
and may, by action and in the discretion of the Board, be increased, but never
decreased, at any time or from time to time. If the term of this Agreement shall
be renewed as provided in Section 2.2 hereof, then during such renewal term of
his employment hereunder, the Executive's Base Salary shall be increased each
year by no less than 10% over the previous years Base Salary and Executive shall
be paid as set forth and subject to the provisions of this paragraph.
3.2 Incentive Bonus. The Executive shall be eligible to participate in and
the Company shall implement an incentive bonus plan based on the annual
performance of the Company, as determined by and in the discretion of the Board
of Directors.
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4. Expense Reimbursement and Other Benefits.
4.1 Reimbursement of Expenses. During the term of Executive's
employment hereunder, upon the submission of proper substantiation by the
Executive, and subject to such rules and guidelines as the Company may from time
to time adopt, the Company shall reimburse the Executive for all reasonable
expenses actually paid or incurred by the Executive in the course of and
pursuant to the business of the Company. The Executive shall account to the
Company in writing for all expenses for which reimbursement is sought and shall
supply to the Company copies of all relevant invoices, receipts or other
evidence reasonably requested by the Company.
4.2 Compensation/Benefit Programs. During the term of this Agreement,
the Executive shall be entitled to participate in all medical, dental,
hospitalization, accidental death and dismemberment, disability, travel and life
insurance plans, and any and all other plans as are presently and hereinafter
offered by the Company to its executives, including savings, pension,
profit-sharing and deferred compensation plans.
4.3 Working Facilities. The Company shall furnish the Executive with
an office, secretarial help and such other facilities and services suitable to
his position and adequate for the performance of his duties hereunder.
4.4 Automobile. The Company shall provide the Executive either with
the use of an automobile together with reimbursement of the reasonable operating
expenses thereof, or in the discretion of the Company with an automobile
allowance of $800 per month.
4.5 Stock Options. During the term of his employment, Employee will
be provided with stock options under the Company's stock option plan(s) as
determined by the Company's Board of Directors and/or Compensation Committee.
4.6 Other Benefits. The Executive shall be entitled to five weeks of
vacation each calendar year during the term of this Agreement, to be taken at
such times as the Executive and the Company shall mutually determine and
provided that no vacation time shall interfere with the duties required to be
rendered by the Executive hereunder. Any vacation time not taken by Executive
during any calendar year may not be carried forward into any succeeding calendar
year. The Executive shall receive such additional benefits, if any, as the Board
of the Company shall from time to time determine.
5. Termination.
5.1 Termination for Cause. The Company shall at all times have the
right, upon written notice to the Executive, to terminate the Executive's
employment hereunder, for cause. For purposes of this Agreement, the term
"cause" shall mean (i) an action or omission of the Executive which constitutes
a willful and material breach of this Agreement which is not cured within
fifteen (15) days after receipt by the Executive of written notice of same, (ii)
fraud, embezzlement, misappropriation of funds or breach of trust in connection
with his services
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hereunder, (iii) conviction of any crime which involves dishonesty or a breach
of trust, (iv) gross negligence in connection with the performance of the
Executive's duties hereunder, or (v) the material and willful or knowing failure
or refusal (other than as a result of a disability) by the Executive to perform
his duties hereunder. Any termination for cause shall be made in writing to the
Executive, which notice shall set forth in detail all acts or omissions upon
which the Company is relying for such termination. The Executive shall have the
right to address the Board regarding the acts set forth in the notice of
termination. Upon any termination pursuant to this Section 5.1, the Company
shall pay to the Executive (i) his Base Salary to the date of termination, and
(ii) a severance payment equal to 12 months of the Executive's Base Salary at
the time of the termination of the Executive's employment with the Company. The
Company shall have no further liability hereunder (other than for reimbursement
for reasonable business expenses incurred prior to the date of termination,
subject, however, to the provisions of Section 4.1).
5.2 Disability. The Company shall at all times have the right, upon
written notice to the Executive, to terminate the Executive's employment
hereunder, if the Executive shall become entitled to benefits under the
Company's Long Term Disability Plan as then in effect, or, if the Executive
shall as the result of mental or physical incapacity, illness or disability,
become unable to perform his obligations hereunder for a period of 90 days in
any 12-month period. The Company shall have sole discretion based upon competent
medical advice to determine whether the Executive continues to be disabled. Upon
any termination pursuant to this Section 5.2, the Company shall (i) pay to the
Executive any unpaid Base Salary through the effective date of termination
specified in such notice, and (ii) pay to the Executive a severance payment
equal to 12 months of the Executive's Base Salary at the time of the termination
of the Executive's employment with the Company. The Company shall have no
further liability hereunder (other than for reimbursement for reasonable
business expenses incurred prior to the date of termination, subject, however to
the provisions of Section 4.1).
5.3 Death. In the event of the death of the Executive during the term
of his employment hereunder, the Company shall (i) pay to the estate of the
deceased Executive any unpaid Base Salary through the Executive's date of death,
and (ii) pay to the Executive a severance payment equal to 12 months of the
Executive's Base Salary at the time of the termination of the Executive's
employment with the Company. The Company shall have no further liability
hereunder (other than for (x) reimbursement for reasonable business expenses
incurred prior to the date of the Executive's death, subject, however to the
provisions of Section 4.1, and (y) payment of compensation for unused vacation
days that have accumulated during the calendar year in which such termination
occurs).
5.4 Termination Without Cause. At any time the Company shall have the
right to terminate the Executive's employment hereunder by written notice to the
Executive. Upon any termination pursuant to this Section 5.4 (that is not a
termination under any of Sections 5.1, 5.2, 5.3 or 5.5) the Company shall (i)
pay to the Executive any unpaid Base Salary through the effective date of
termination specified in such notice, (ii) continue to pay the Executive's Base
Salary following the termination of the Executive's employment with the Company
for the Period (as hereinafter defined) in the manner and at such time as the
Base Salary otherwise would have
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been payable to the Executive, and (iii) continue to provide the Executive with
the health, dental and life insurance benefits he was receiving under Sections
4.2 hereof, for the Period (as hereinafter defined) in the manner and at such
times as such benefits otherwise would have been payable or provided to the
Executive. For the purposes of this Section the "Period" shall be defined as the
greater of (x) the number of days remaining under the term of this Agreement or
any extension or renewal thereof, as if this Agreement had not been terminated,
or (y) twelve (12) months. The Company shall have no further liability hereunder
(other than for (x) reimbursement for reasonable business expenses incurred
prior to the date of termination, subject, however, to the provisions of Section
4.1, and (y) payment of compensation for unused vacation days that have
accumulated during the calendar year in which such termination occurs).
5.5 Resignation by Executive. The Executive shall at all times have
the right, upon sixty (60) days written notice to the Company, to terminate the
Executive's employment hereunder. Upon any termination pursuant to this Section
5.5, the Company shall pay to the Executive any unpaid Base Salary through the
effective date of termination specified in such notice. The Company shall have
no further liability hereunder (other than for (x) reimbursement for reasonable
business expenses incurred prior to the date of termination, subject, however,
to the provisions of Section 4.1, and (y) payment of compensation for unused
vacation days that have accumulated during the calendar year in which such
termination occurs).
5.6 Survival. The provisions of this Article 5 shall survive the
termination of this Agreement, as applicable.
6. Restrictive Covenants.
6.1 Non-competition. At all times while the Executive is employed by
the Company and for a one (1) year period after the termination of the
Executive's employment with the Company for any reason, the Executive shall not,
directly or indirectly, engage in or have any interest in any sole
proprietorship, partnership, corporation or business or any other person or
entity (whether as an employee, officer, director, partner, agent, security
holder, creditor, consultant or otherwise) that directly or indirectly (or
through any affiliated entity) engages in competition with the Company located
within a fifty (50) mile radius of Company's current place of business or any
subsequent location Company may conduct business from where the Company markets
and sells its products or its services (for this purpose, any business that
engages in the retail or wholesale automotive parts and accessories business
shall be deemed to be in competition with the Company); provided that such
provision shall not apply to the Executive's ownership of Common Stock of the
Company or the acquisition by the Executive, solely as an investment, of
securities of any issuer that is registered under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended, and that are listed or admitted for
trading on any United States national securities exchange or that are quoted on
the National Association of Securities Dealers Automated Quotations System, or
any similar system or automated dissemination of quotations of securities prices
in common use, so long as the Executive does not control, acquire a controlling
interest in or become a member of a group which exercises direct or indirect
control or, more than five percent of any class of capital stock of such
corporation. During the term of Executive's
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employment relationship with Company, the geographical limitation of a fifty
(50) mile radius contained above shall not be applicable, and Executive shall be
prohibited from such ownership and/or activity regardless of the geographical
location of such other business.
6.2 Nondisclosure. The Executive shall not at any time, directly or
indirectly, divulge, communicate, use to the detriment of the Company or for the
benefit of any other person or persons, or misuse in any way, any Confidential
Information (as hereinafter defined) pertaining to the business of the Company.
Any Confidential Information or data now or hereafter acquired by the Executive
with respect to the business of the Company (which shall include, but not be
limited to, information concerning the Company's financial condition, prospects,
technology, customers, suppliers, sources of leads and methods of doing
business) shall be deemed a valuable, special and unique asset of the Company
that is received by the Executive in confidence and as a fiduciary, and
Executive shall remain a fiduciary to the Company with respect to all of such
information. For purposes of this Agreement, "Confidential Information" means
information disclosed to the Executive or known by the Executive as a
consequence of or through his employment by the Company (including information
conceived, originated, discovered or developed by the Executive) prior to or
after the date hereof, and not generally known, about the Company or its
business. Notwithstanding the foregoing, nothing herein shall be deemed to
restrict the Executive from disclosing Confidential Information to the extent
required by law.
6.3 Nonsolicitation of Employees and Customers. At all times while
the Executive is employed by the Company and for a one (1) year period after the
termination of the Executive's employment with the Company for any reason, for
the Executive shall not, directly or indirectly, for himself or for any other
person, firm, corporation, partnership, association or other entity (a) employ
or attempt to employ or enter into any contractual arrangement with any employee
or former employee of the Company, unless such employee or former employee has
not been employed by the Company for a period in excess of six months, and/or
(b) divert, attempt to divert, call on or solicit any of the actual or targeted
prospective customers of the Company on behalf of any person or entity in
connection with any business competitive with the business of the Company, nor
shall the Executive make known the names and addresses of such clients or any
information relating in any manner to the Company's trade or business
relationships with such customers, other than in connection with the performance
of Executive's duties under this Agreement.
6.4 Books and Records. All books, records, and accounts relating in
any manner to the customers or clients of the Company, whether prepared by the
Executive or otherwise coming into the Executive's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company on termination of the Executive's employment hereunder or on the
Company's request at any time.
6.5 Definition of Company. Solely for purposes of this Section 6, the
term "Company" also shall include any existing or future subsidiaries of the
Company that are operating during the time periods described herein and any
other entities that directly or indirectly,
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through one or more intermediaries, control, are controlled by or are under
common control with the Company during the periods described herein.
6.6 Acknowledgment by Executive. The Executive acknowledges and
confirms that the length of the term of the provisions of this Section 6 and the
geographical restrictions contained in Section 6.1 are fair and reasonable and
not the result of overreaching, duress or coercion of any kind. The Executive
further acknowledges and confirms that his full, uninhibited and faithful
observance of each of the covenants contained in this Section 6 will not cause
him any undue hardship, financial or otherwise, and that enforcement of each of
the covenants contained herein will not impair his ability to obtain employment
commensurate with his abilities and on terms fully acceptable to him or
otherwise to obtain income required for the comfortable support of him and his
family and the satisfaction of the needs of his creditors. The Executive
acknowledges and confirms that his special knowledge of the business of the
Company is such as would cause the Company serious injury or loss if he were to
use such ability and knowledge to the benefit of a competitor or were to compete
with the Company in violation of the terms of this Section 6. The Executive
further acknowledges and confirms that the Confidential Information, the
substantial relationships with Company's specific prospective and existing
customers and suppliers: (i) are valuable, special, and a unique asset of
Company; (ii) have provided and will hereafter provide Company with a
substantial competitive advantage in the operation of its business; and (iii)
are a legitimate business interest of Company. Company and Executive also agree
that the existence of these legitimate business interests justifies the need for
the restrictive covenants set forth in this Section, and the restrictive
covenants are reasonably necessary to protect Company's legitimate business
interests.
6.7 Reformation by Court. In the event that a court of competent
jurisdiction shall determine that any provision of this Section 6 is invalid or
more restrictive than permitted under the governing law of such jurisdiction,
then only as to enforcement of this Section 6 within the jurisdiction of such
court, such provision shall be interpreted and enforced as if it provided for
the maximum restriction permitted under such governing law.
6.8 Extension of Time. If the Executive shall be in violation of any
provision of this Section 6, then each time limitation set forth in this Section
6 shall be extended for a period of time equal to the period of time during
which such violation or violations occur. If the Company seeks injunctive relief
from such violation in any court, then the covenants set forth in this Section 6
shall be extended for a period of time equal to the pendency of such proceeding
including all appeals by the Executive.
6.9 Survival. The provisions of this Section 6 shall survive the
termination of this Agreement, as applicable.
7. Injunction and Remedies.
7.1 It is recognized and hereby acknowledged by the parties hereto
that a breach by the Executive of any of the covenants contained in Section 6 of
this Agreement will
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cause irreparable harm and damage to the Company, the monetary amount of which
may be virtually impossible to ascertain. As a result, the Executive recognizes
and hereby acknowledges that the Company shall be entitled to an injunction from
any court of competent jurisdiction enjoining and restraining any violation of
any or all of the covenants contained in Section 6 of this Agreement by the
Executive or any of his affiliates, associates, partners or agents, either
directly or indirectly, and that such right to injunction shall be cumulative
and in addition to whatever other remedies the Company may possess. In the event
that the Company does apply for such an injunction, Executive shall not raise as
a defense thereto that the Company has an adequate remedy at law. Executive
hereby consents and agrees that temporary and permanent injunctive relief may be
granted in any proceedings which might be brought to enforce any such terms,
covenants, or provisions without the necessity of proof of actual damages or
posting of a bond.
7.2 Executive and Company hereby acknowledge and agree that, in the
event of any breach by Executive, directly or indirectly, of the foregoing
restrictive covenants, it will be difficult to ascertain the precise amount of
damages that may be suffered by Company by reason of such breach; and
accordingly, the parties hereby agree that, as liquidated damages (and not as a
penalty) in respect of any such breach, Executive shall be required to provide
an accounting of any and all benefits received by Executive as a result of such
breach, including, but not limited to, true and correct financial records, or
other data detailing the financial benefit Executive received or derived,
directly or indirectly, from any and all violative acts or activities, and
Executive thereafter shall be required to pay to Company, as damages, cash
amounts equal to any and all gross revenues received or derived by Executive,
directly or indirectly, from any and all violative acts or activities. The
parties hereby agree that the foregoing constitutes a fair and reasonable
estimate of the actual damages that might be suffered by reason of any breach of
Section 6 by Executive, and the parties hereby agree to such liquidated damages
in lieu of any and all other measures of damages that might be asserted in
respect of any subject breach.
8. Claims not a Defense. Executive expressly agrees that the existence of
any claims that he may have against the Company, whether or not arising from
this Agreement, shall not constitute a defense to the enforcement of the
covenants or provisions set forth in Sections 6 and 7.
9. Assignment. Neither party shall have the right to assign or
delegate his rights or obligations hereunder, or any portion thereof, to any
other person.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida. Each party hereto agrees to
submit to the personal jurisdiction and venue of the State and/or Federal Courts
located in Orange County, Florida, for resolution of all disputes arising out
of, in connection with, or by reason of the interpretation, construction, and
enforcement of this Agreement, and hereby waives the claim or defense therein
that such courts constitute an inconvenient forum.
11. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and, upon
its effectiveness, shall supersede
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all prior agreements, understandings and arrangements, both oral and written,
between the Executive and the Company (or any of its affiliates) with respect to
such subject matter. This Agreement may not be modified in any way unless by a
written instrument signed by both the Company and the Executive.
12. Notices: All notices required or permitted to be given hereunder shall
be in writing and shall be personally delivered by courier, sent by registered
or certified mail, return receipt requested or sent by confirmed facsimile
transmission addressed as set forth herein. Notices personally delivered, sent
by facsimile or sent by overnight courier shall be deemed given on the date of
delivery and notices mailed in accordance with the foregoing shall be deemed
given upon the earlier of receipt by the addressee, as evidenced by the return
receipt thereof, or three (3) days after deposit in the U. S. mail. Notice shall
be sent (i) if to the COMPANY, addressed to: 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx, 00000, Telecopier (000) 000-0000, Attention: Chief Financial Officer,
and (ii) if to the EXECUTIVE, to his address as reflected on the payroll records
of the Company, or to such other address as either party hereto may from time to
time give notice of to the other.
13. Benefits; Binding Effect. This Agreement shall be for the benefit of
and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where applicable,
assigns, including, without limitation, any successor to the Company, whether by
merger, consolidation, sale of stock, sale of assets or otherwise.
14. Severability. The invalidity of any one or more of the words, phrases,
sentences, clauses or sections contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any part thereof,
all of which are inserted conditionally on their being valid in law, and, in the
event that any one or more of the words, phrases, sentences, clauses or sections
contained in this Agreement shall be declared invalid, this Agreement shall be
construed as if such invalid word or words, phrase or phrases, sentence or
sentences, clause or clauses, or section or sections had not been inserted. If
such invalidity is caused by length of time or size of area, or both, the
otherwise invalid provision will be considered to be reduced to a period or area
which would cure such invalidity.
15. Waivers. The waiver by either party hereto of a breach or violation of
any term or provision of this Agreement shall not operate nor be construed as a
waiver of any subsequent breach or violation.
16. Damages. Nothing contained herein shall be construed to prevent the
Company or the Executive from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of any term
or provision of this Agreement. In the event that either party hereto brings
suit for the collection of any damages resulting from, or the injunction of any
action constituting, a breach of any of the terms or provisions of this
Agreement, then the party found to be at fault shall pay all reasonable court
costs and attorneys' fees of the other, including all costs of collection or
appeals.
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17. Section Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
18. No Third Party Beneficiary. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
other than the Company, the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and assigns, any rights or
remedies under or by reason of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
COMPANY:
AUTOMOTIVE ONE PARTS STORES, INC.,
a Florida corporation
By: /s/ Xxxxxx X. Xxxxxx, III
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Name: Xxxxxx X. Xxxxxx, III
Title: President
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxx, III
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Xxxxxx X. Xxxxxx, III
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