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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of January 1,
1997 (the "Effective Date"), by and between XXXXXXXX COMPANIES, INC., a Texas
corporation,(the "Employer"), and XXXXXX XXXXX, an individual residing in
Collin County, Texas (the "Employee"). In consideration of the covenants and
agreements herein contained, Employer and Employee agree as follows:
1. Term. Subject to the terms and conditions set forth in this
Agreement, including the right of Employer to terminate employment under
Section 11 for certain reasons, Employer hereby employs Employee, and Employee
hereby accepts such employment from Employer, for a period commencing on the
Effective Date, and unless earlier terminated or extended in accordance with
the provisions of this Agreement, expiring on December 31, 1997.
2. Extent of Services. During the term of this Agreement,
Employee shall devote substantially all of his business time, attention and
effort to the business of Employer in order to discharge his duties in a manner
consistent with any and all policies and guidelines as may be established by
Employer from time to time. Employee shall not, during the term of this
Agreement, be engaged in any other business or pursuit for pecuniary advantage;
provided, however, that the foregoing shall not be construed as preventing
Employee from investing personal assets in such form or manner as will not
require any significant services on Employee's part and will not violate any
provision of this Agreement.
3. Duties. Employee shall be employed for the term of this
Agreement as the General Manager of Extruders, a division of Employer, and in
such capacity shall perform the normal duties associated with such position,
subject to the general direction, approval and control of the Board of
Directors of Employer (the "Board"). Employee shall perform his duties
faithfully, competently, and to the best of his ability. A substantial change
in the duties of Employer shall require the consent of Employee.
4. Cash Compensation.
(a) Salary. Subject to the other terms and conditions
of this Agreement and as compensation for the performance of his
services hereunder, Employer shall pay Employee fixed compensation at
an initial annual rate of One Hundred Thousand and No/100 Dollars
($100,000) during the term of Employee's employment under this
Agreement (such payment is referred to herein as "Salary"). Salary
shall accrue and be payable in accordance with the payroll practices
of Employer for executives in effect from time to time during the term
hereof.
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All such payments shall be subject to deduction and withholding
authorized or required by applicable law. The Salary shall be
reviewed by the Board in December of each fiscal year and may be
increased, at the sole discretion of the Board, effective on the first
day of the immediately following fiscal year of Employer. Any
increase in Salary shall then become the Salary payable under this
Agreement.
(b) Incentive Bonus. Subject to the other terms and
conditions of this Agreement and as further compensation for the
performance of his services hereunder, Employer shall pay Employee an
incentive bonus during the term of Employee's employment under this
Agreement (such payment is referred to herein as the "Incentive
Bonus"). The Incentive Bonus shall be equal to Three Percent (3%) of
the "Division's Pre-Tax Profit" (as defined hereinbelow). All such
payments shall be subject to deduction and withholding authorized or
required by applicable law.
For purposes of this Agreement, "Division's Pre-Tax Profit" shall
mean, for any applicable period, the gross income of the Extruders Division of
Employer, other than capital gains, less the Division's expenses, deductions
and credits directly attributable to such operations, including, but not
limited to a management fee of 2% of gross sales of the Division, and
management expenses reasonably allocated to such Division. In computing the
Division's Pre-Tax Profit, no deduction shall be taken or allowance made for:
(i) federal or state income taxes; (ii) this Incentive Bonus, or (iii) any
interest expense not directly attributable to the operations of such Division.
The Division's Pre-Tax Profit for any applicable period shall be determined in
accordance with generally accepted accounting principles by that certified
public accountants regularly engaged by Employer and their determination shall
be final and conclusive on the parties hereto.
Except as otherwise specifically provided herein, the Incentive Bonus
shall be paid to the Employee on or before the later of: (i) April l0th of the
fiscal year immediately following the one for which the calculation is made, or
(ii) ten (10) days following the receipt of that calculation of the Division's
Pre-Tax Profit for the applicable period from the certified public accountants
engaged by Employer; provided, however, that in any event the Incentive Bonus
shall be paid an or before June 1st of the fiscal year immediately following
the year for which the calculation of the Incentive Bonus is made. Payment of
the Incentive Bonus shall be accompanied by a copy of the calculation on which
the Incentive Bonus is based.
In the event that the Incentive Bonus is not paid on or before April
10th as provided in the preceding paragraph, the Employer
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shall prepare an estimate of Employee's Incentive Bonus. On or before April
10th of the fiscal year immediately following the year for which the estimate
of the Incentive Bonus is made, Employer shall pay to Employee seventy-five
percent (75%) of the Employer's estimate of the Employee's Incentive Bonus.
Such payment shall be accompanied by a copy of the calculation on which the
estimate of the Incentive Bonus is based. The balance, if any, of the
Incentive Bonus shall be paid as required in this paragraph 4(b).
5. Health and Disability Insurance. Employer shall provide
Employee with such health and disability insurance as is generally made
available from time to time to Employer's executive officers.
6. Expenses.
(a) Reimbursement. Employer shall reimburse Employee for
all items of travel, entertainment, and miscellaneous expense,
including, but not limited to, car telephone expense, incurred in
carrying out his duties under this Agreement. Reimbursement shall
only be made against an itemized list of such expenditures signed by
the Employee in such form as required by the Employer.
(b) Automobile. The Employer recognizes the Employee's
need for an automobile for business purposes. Employer shall provide
the Employee with an automobile, including all related maintenance
repairs, insurance and other costs. At Employee's request, a new
automobile shall be purchased for the Employee's use when the
automobile that the Employer is presently providing to Employee has
either: (i) been in service for three years, or (ii) exceeded 75,000
miles. Employer's cost for a new automobile for Employee shall not
exceed Twenty Five Thousand and No/100 Dollars ($25,000.00).
7. Key-Man Insurance. At any time during the term of this
Agreement, the Employer shall have the right to insure the life of the Employee
for the Employer's sole benefit, and to determine the amount of insurance and
the type of policy. The Employee shall cooperate with the Employer in taking
out such insurance by submitting to physical examination, by supplying all
information required by the insurance company, and by executing all necessary
documents. The Employee shall incur no financial obligation by executing any
required document, and shall have no interest in any such policy.
8. Confidentiality. Employee acknowledges that he is being
employed by Employer in a capacity in which he will receive or contribute to
information not generally known, and proprietary to Employer about Employer's
business, services and products (collectively, "Confidential Information").
Employee hereby
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acknowledges and agrees that all Confidential Information concerning the
business or affairs of Employer which Employee may acquire in connection with
or as a result of his association with Employer shall be and was received in
strict confidence and shall be used only for the purpose of performing his
duties pursuant to this Agreement and that no such Confidential Information
shall be otherwise used or disclosed by Employee during or after the term of
this Agreement without the prior written consent of Employer. Upon termination
of Employee's employment hereunder, all Confidential Information and other
documents, records, notebooks, customer lists, mailing lists, business
proposals, contracts, agreements and other repositories containing information
concerning Employer or the business of Employer (including all copies thereof)
in Employee's possession, whether prepared by Employee or others, shall remain
with or be returned to Employer.
9. Noncompetition. Employer and Employee acknowledge that it
would be difficult to maintain the confidentiality of Confidential Information
if Employee were to be associated with a competitor of Employer. Accordingly,
Employee covenants and agrees that, for so long as Employer pays Salary to
Employee and for a period of one year thereafter, he will not, within the
United States of America, Mexico and Canada, directly or indirectly, compete
with Employer by engaging in a business which in substantially similar to the
business of Employer. For the purposes of this Section 9, the following terms
shall have the meanings indicated below:
(a) The term "compete" shall include with respect to the
business of Employer, without limitation, engaging in or attempting to
engage in the manufacture or distribution of windows and doors and all
related products, either alone or with any individual, partnership,
corporation, cooperative or association.
(b) The words "directly or indirectly" as they modify
the word "compete" shall mean: (i) acting as an agent, representative,
consultant, officer, director or employee of any entity or enterprise
which is competing (as defined in this Section 9) with the business of
Employer; (ii) participating in any such competing entity or
enterprise as an owner, partner, limited partner, joint venturer,
creditor or shareholder (except as a shareholder holding less than a
five percent (5%) interest in a corporation whose shares are actively
traded on a regional or national securities exchange or in the
over-the-counter market); or (iii) communicating to any such competing
entity or enterprise any competitive non-public information concerning
any past, present or identified prospective client or customer of, or
supplier to, Employer.
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(c) With the objective of obtaining the successful
implementation of the foregoing restrictive covenant, Employer and
Employee agree that in the event such restrictive covenant should fail
for lack of reasonableness, such covenant and the obligations
contained therein shall be enforced to a reasonable extent.
10. Injunctive Relief. In the event of a breach or threatened
breach by Employee of any of the provisions of Sections 8 and 9 hereof,
Employer shall be entitled to specific performance, injunctive relief or such
other legal and/or equitable remedies as may be appropriate. Nothing contained
herein shall be construed as prohibiting Employer from pursuing any other
remedies available to it for such breach or threatened breach of any of the
terms and provisions of this Agreement, nor limiting its right to the recovery
of damages from Employee or any other person or entity for the breach or
violation of any provision of this Agreement, whether such remedy be at law or
in equity. The parties hereto agree that, in the event any court issues a
temporary restraining order, preliminary, temporary or permanent injunction
pursuant to Employee's application therefore to Sections 8 or 9 hereof, a bond
of $1,000 shall be sufficient and adequate security for Employer's liability
for wrongful injunction.
11. Termination.
(a) Upon written notice, the Employer may immediately
terminate Employee's employment for Cause (as defined hereinbelow).
In such event, Employee shall be paid only Salary pro rata to the date
of such termination notice (less all amounts required to be withheld
or deducted therefrom and all amounts owed or due by Employee to
Employer), and Employee shall forfeit all rights to the Incentive
Bonus otherwise due to him or to which he may be entitled.
(b) In the event that Employee terminates his employment
with Employer prior to the expiration of the term set forth in Section
1 and Employee has not breached any provision of this Agreement,
Employee shall be paid Salary as has been earned to the date of
termination, together with the Incentive Bonus, pro- rated from the
first day of Employer's then-current fiscal year to the date of
Employee's termination, such Incentive Bonus to be paid within
one-hundred twenty (120) days following the date of Employee's
termination (less all amounts required to be withheld or deducted
therefrom and all amounts owed or due by Employer to Employer). Any
such termination of employment by Employee, and the payment of Salary
and Incentive Bonus pursuant to this Section 11(b) shall be without
prejudice to any rights of Employer under this Agreement.
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(c) In the event that Employer terminates Employee other
than for Cause, Employee shall continue to be paid Salary for a period
of twelve (12) months, together with the Incentive Bonus, pro-rated
from the first day of Employer's then-current fiscal year to the date
of such termination, such Incentive Bonus to be paid within one
hundred twenty (120) days following the date of Employee's termination
(less all amounts required to be withheld or deducted therefrom and
all amounts owed or due by Employee to Employer), and (ii) if Employee
elects to be covered under Employer's health plan, to pay Employee's
cost of such coverage (on the same basis as prior to Employee's
termination) for a period of twelve (12) months following Employee's
termination.
(d) If Employee dies during the term hereof, this
Agreement shall terminate, and Employer shall pay to the estate of
Employee the Salary which would otherwise be payable to Employee up to
the and of the month in which his death occurs (less all amounts
required to be withheld or deducted therefrom and all amounts owed or
due by Employee to Employer), together with the Incentive Bonus
pro-rated from the first day of Employer's then current fiscal year to
the date of Employee's death, such Incentive Bonus to be paid within
one-hundred twenty (120) days following the date of Employee's death
(less all amounts required to be withheld or deducted therefrom and
all amounts owed or due by Employee to Employer).
(e) In the event that this Agreement or the employment
of Employee is terminated, Employee shall not be obligated to mitigate
his damages nor the amount of any payment provided for him in this
Agreement by seeking other employment or otherwise.
(f) For the purposes of this Agreement, "Cause" shall
mean:
(i) that Employee shall have committed an
intentional material act of fraud or embezzlement against
Employer in connection with his duties or in the course of his
employment with Employer;
(ii) that Employee shall have committed an
intentional act of wrongful material damage to property of the
Employer;
(iii) that Employee shall have committed an
intentional wrongful disclosure of material secrets
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possessed by, or material Confidential Information of the
Employer;
(iv) Employee shall intentionally fail to perform his
duties faithfully, competently, and to the best of his ability
in accordance with Section 3 hereinabove (other than due to
the physical or mental disability of Employee); or,
(v) any intentional breach of this Agreement by
Employee.
For the purposes of this Agreement, no act, or failure to act, on the
part of Employee shall be deemed "intentional" unless done, or omitted to be
done, by Employee not in good faith and without reasonable belief that his
action or omission was in the xxxx interest of Employer.
12. Disability. Notwithstanding anything in this Agreement to the
contrary, Employer may terminate this Agreement if, during the term of the
Agreement, Employee becomes disabled. For purposes of this Agreement, Employee
shall be deemed to have become disabled if, because of ill health, physical or
mental disability, or any other reason beyond his control, Employee shall have
been unable to unwilling or shall have failed to perform his duties under this
Agreement, as determined in good faith by the Board of Directors of Employer,
for a period of one hundred twenty (120) days in any 12-month period. Until
such determination, Employee shall be entitled to receive Salary and Incentive
Bonus (if any) under this Agreement unless this Agreement is otherwise
terminated pursuant to its terms. In the event Employer terminates this
Agreement due to the disability of Employee, Employee shall be paid Salary
pro-rata to the date of such termination, together with the Incentive Bonus,
pro-rated from the first day of Employer's then-current fiscal year to the date
of such termination, such Incentive Bonus to be paid within one hundred twenty
(120) days following the date of termination (less all amounts required to be
withheld or deducted therefrom and all amounts owed or due by Employee to
Employer).
13. Change in Control. This Agreement may be assigned by the
Employer in the event of a "Change in Control" as defined hereinbelow;
provided, however, that the assignee shall assume in writing all of the
Employer's obligations under this Agreement, in which event the Employer shall
be released of all further liability and obligations hereunder. Following a
"Change in Control", if the Employee is terminated by an assignee of Employer
for any reason other than for "Cause", as defined hereinabove, Employee shall
be paid the following for the remaining term of this Agreement: (i) his then
current Salary, and (ii) the Incentive Bonus based on an average of the
Division's Pre-Tax Profit for the three preceding
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fiscal years of Employer. For purposes of this Agreement, "Change in Control"
shall mean any of the following: (i) the sale or exchange of more than fifty
percent (50%) of the issued and outstanding voting stock of Employer to any
person or entity not related to or affiliated with the current shareholders of
Employer; (ii) a sale of substantially all of the assets of Employer to a
person or entity not related to or affiliated with the current shareholders of
Employer; or, (iii) the sale of the assets of the Extruders division of
Employer to a person or entity not related to or affiliated with the current
shareholders of Employer.
14. Change of Location. At the commencement of this Agreement,
the Employee shall perform his duties at the offices of the Extruders division
of Employer located at 000 Xxxxxxx 00, Xxxxx, Xxxxxx Xxxxxx, Xxxxx. Any change
in place of performance of duties outside of Collin or Dallas County, Texas
shall require the consent of Employee.
15. Vacation. During the term of this Agreement, Employee shall
be entitled to an annual vacation leave of four weeks at full pay. The time
for such vacation shall be selected by the Employee and approved by the
Employer, and it must be taken in each calendar year or it is forfeited.
Employee shall not be entitled to vacation pay in lieu of vacation.
16. Severability. Subject to Section 9 hereof, in the event that
any provision contained herein shall be held to be invalid, illegal or
unenforceable for any reason, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
17. Waiver. No delay or omission by either party hereto in
exercising any right or power hereunder shall impair such right or power or be
construed as a waiver thereof. A waiver by either of the parties hereto of any
of the covenants to be performed by the other or any breach thereof shall not
be construed to be a waiver of any succeeding breach thereof or of any other
covenant herein contained. All remedies provided for in this Agreement shall
be cumulative and in addition to and not in lieu of any other remedies
available to either party at law, in equity or otherwise.
18. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof,
and there are no representations, understandings or agreements relative hereto
which are not fully expressed herein, all prior agreements with respect to the
subject matter hereof being expressly superseded hereby. No change, waiver or
discharge hereof shall be valid unless in writing and signed by the party
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against which such change, waiver or discharge is sought to be enforced.
19. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas (without giving
effect to principles of conflicts of law).
20. Multiple Counterparts. This Agreement may be executed in
multiple identical counterparts, each of which shall be deemed an original, and
all of which taken together shall constitute but one and the same instrument.
In making proof of this Agreement, it shall not be necessary to produce or
account for more than one counterpart executed by the party sought to be
charged with performance hereunder.
21. Headings and Pronouns. The subject headings of the sections
contained herein are inserted for convenience only and shall not be considered
in interpreting any term or provision hereof. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular
or plural as the identity of the entities or persons referred to any require.
22. Binding Arbitration.
(a) Election. In the event of a contested claim or other
matter in dispute under this Agreement, either of the parties may, by
notice to the other party (a "Demand to Arbitrate"), elect that the
matter shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association
("AAA") by three (3) arbitrators, which shall administer the
arbitration. The costs and expenses of any such arbitration shall be
borne by the parties as determined by the arbitrators. Any such
election to arbitrate shall be binding on all parties to this
Agreement.
(b) Arbitrators. Employer shall appoint one arbitrator,
and Employee shall appoint one arbitrator. If either party fails to
appoint an arbitrator within thirty (30) days from the date a Demand
to Arbitrate was given, AAA shall make the appointment of the
arbitrator. The two (2) arbitrators thus appointed shall appoint the
third arbitrator. if such two (2) arbitrators fail to appoint the
third arbitrator within sixty (60) days from the date a Demand to
Arbitrate was given, AAA shall make the appointment of the third
arbitrator. Should any of the arbitrators so appointed die, resign,
refuse or become unable to act before a decision is given, the vacancy
shall be filled by the method set forth in this sub-paragraph (b) for
the original appointment. The Place of arbitration shall be Dallas,
Texas.
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(c) Binding Effect. The award and all decisions of the
arbitrators shall be final and binding upon the parties and there
shall be no appeal therefrom to any court except as expressly
permitted by the law of the place of arbitration. Judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. In the event of any conflict between the rules
of the arbitral authority and this Section 22, the provisions of this
Section 22 shall govern.
23. Survival. Employee understands and agrees that his covenants
and agreements contained in sections a and 9 hereof are the essence of this
Agreement and without the agreement of Employee to such covenants, Employer
would not employ him and divulge to hi. its proprietary information developed
at great cost to it. The continuation of the Employment of the Employee.
pursuant to the terms hereof is not a condition to the survival of the
covenants and provisions contained in such sections. All obligations and
duties of Employee and, subject to the specific terms of each obligation
contained herein, all rights of Employer as set forth in said sections, shall
survive the termination or expiration of this Agreement.
24. Attorney's Fees. If any civil action, whether at law or in
equity is necessary to enforce or interpret any of the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorney's fees, court
costs and other reasonable expenses of litigation, in addition to any other
relief to which such party may be entitled.
25. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered, telecopied
with telephonic confirmation (with original copy sent by first class mail,
postage prepaid, or delivered by hand, messenger or overnight courier) or on
the third day after being mailed by United states certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to Employee:
X.X.Xxx 0000
Xxxxx, Xxxxx 00000
If to Employer:
0000 Xxxxxxxxxx Xxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
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or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement this 20th day of March, 1995, to be effective as of the
Effective Date.
EMPLOYER:
XXXXXXXX COMPANIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: President and CEO
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EMPLOYEE:
/s/ Xxxxxx Xxxxx
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XXXXXX XXXXX
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