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EXHIBIT 10.8.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of the 25th day of May, 1999,
between XXXXXXX XXXXXX BUILDING PRODUCTS, INC. (the "Company") and XXXXXX X.
XXXXXXXX, a resident of the State of Texas("Executive").
BACKGROUND
Executive has been employed by the Company and its subsidiary, Ashley
Aluminum, LLC (formerly Ashley Aluminum, Inc.) ("Ashley") pursuant to an
Employment Agreement dated September 1, 1996 (the "Prior Agreement") as
President of the Company and President and Chief Executive Officer of Ashley.
The Board of Directors of the Company desires to modify, renew and extend the
employment relationship with Executive, and Executive desires to continue
employment on the terms and conditions set forth below. This Agreement will
amend, replace and supersede the Prior Agreement.
AGREEMENT
In consideration of the continued employment of Executive by the
Company, the premises, and the mutual agreements hereinafter set forth, the
parties agree:
1. Definitions. The following terms used herein shall have the
definitions set forth below:
(a) "Business" or "Business of the Company" means the
business of distributing patio and screen enclosure products, vinyl and
aluminum building products, windows, fascia, soffit, fasteners, and other
exterior building products and roll forming aluminum building products.
(b) "Cause" means conduct amounting to fraud or dishonesty
against the Company; Executive's willful violation of Sections 2(a) or (b)
hereof, or any of the Company's work rules or policies or repeated absences
from work without a reasonable excuse, if the Board of Directors of the Parent
notifies Executive of such violation or absence in writing and Executive fails
to cure such violation or absenteeism within five (5) days after written notice
has been given, provided that written notice relating to such violation or
absenteeism shall only be given once as it relates to a particular manner of
conduct; intoxication with alcohol or drugs while on Company business during
regular business hours; a conviction or plea of guilty or nolo contendere to a
felony or a crime involving dishonesty against the Company; or Executive's
failure to observe the requirements of Sections 2(c), 5 or 6 hereof.
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(c) "Disability" means (i) the inability of Executive to
perform the duties of Executive's employment due to physical or emotional
incapacity or illness, where such inability is expected to be a long-continued
and indefinite duration or (ii) Executive shall be entitled to (x) disability
retirement benefits under the federal Social Security Act or (y) recover
benefits under any long-term disability plan or policy maintained by the
Company. In the event of a dispute, the determination of Disability shall be
made by the Board of Directors of the Company and shall be supported by advice
of a physician competent in the area to which such Disability relates.
(d) "Effective Date" means the date set forth above.
2. Terms of Engagement; Duties
(a) The Company hereby employs Executive, commencing on the
Effective Date, and Executive hereby accepts employment by the Company subject
to the terms and conditions hereof. Executive is engaged initially with the
title and functions of Vice Chairman, President and Chief Operating Officer of
the Company. Executive shall report to and shall perform the duties assigned by
the Board of Directors of the Company from time to time, and as are provided in
the Bylaws of the Company. At all times during the term of this Agreement, the
Executive shall be employed as a senior executive of the Company with
appropriate and commensurate title, rank and status and Executive shall retain
the president position of any division or unit of the Company in the future
that contains substantially all of the assets of the Company as are held by the
Company on the Effective Date.
(b) Throughout the term of this Agreement, Executive shall:
(i) devote all of Executive's business effort,
time, energy, and skill (reasonable vacations and reasonable absences
due to illness excepted) to the duties assigned by the Board of
Directors of the Company;
(ii) faithfully, loyally, and industriously
perform such duties, subject to the control and supervision of the
Board of Directors of the Company; and
(iii) diligently follow and implement all
management policies and decisions of the Company that are communicated
to Executive.
(c) During the term of this Agreement, Executive shall not be
engaged (whether or not during normal business hours) in any other business or
professional activity, whether or not such activity is pursued for gain, profit
or other pecuniary advantage that is contrary to the provisions of Section
2(b)(i) above; provided, however, that this restriction shall not be construed
as preventing Executive from (i) investing his personal assets in businesses
which do not compete with the Company in such form or manner as will not
require any services on the part of Executive in the operation or the affairs
of the companies in which such investments are made and in which his
participation is solely that of an investor or (ii) purchasing securities in
any corporation whose securities are regularly traded provided that such
purchase shall not result in his collectively owning beneficially at any time
five (5%) percent or more of the equity securities of any corporation engaged
in a business competitive to that of the Company.
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3. Compensation. In consideration of the services rendered by
Executive pursuant to this Agreement, the Company shall provide the following:
(a) A base salary of Three Hundred Forty Thousand Dollars
($340,000) per annum (the "Base Salary") which Base Salary will be reviewed
periodically and may be increased by the Company from time to time. The Base
Salary shall be paid in accordance with the Company's standard payroll
practices in effect from time to time, and shall be subject to such deductions
and withholdings as are required by law or by policies of the Company.
(b) Executive shall be eligible to be considered for an
annual cash performance bonus, which may consist of an amount of up to one
hundred percent (100%) of the Base Salary in the applicable year based on the
attainment of performance objectives established by the Board of Directors of
the Company in good faith and Executive's contributions to the attainment of
those objectives, and shall be in such amount and payable in such manner and on
such terms as are determined by the Board of Directors of the Company. Nothing
contained in this subsection (b) shall obligate the Company to pay a bonus to
Executive, unless the Board of Directors of the Company determines to award
such a bonus to Executive.
(c) The right to participate in any insurance plans
maintained by the Company from time to time to the extent that Executive's
position, tenure, salary, age, health and other qualifications make him
eligible to participate, and such other fringe benefits as are provided to the
other senior management employees of the Company, provided that the Company
shall not be required to adopt or continue any insurance plans or fringe
benefits.
(d) Reimbursement for all business reasonable expenses
authorized by the Company and incurred by Executive in connection with the
Business of the Company (including car allowance) subject to compliance with
the expense reimbursement policies established by the Company and in sufficient
detail to comply with Internal Revenue Service Regulations.
(e) A grant, as of the Effective Date, of a number of options
to purchase Common Stock of the Company determined in accordance with the
Company's Long Term Incentive Compensation Program and issued under the
existing Stock Incentive Plans of the Company. The exercise price of such
options shall be determined by the formula established by the Board of
Directors under such Program. Such options will have a term of ten years and
will vest in one-fourth increments over four years from the date of grant.
(f) Executive shall be eligible for annual grants of
additional options to purchase Common Stock of the Company under the Company's
Long Term Incentive Compensation Program.
(g) The remuneration and benefits set forth in this Section 3
shall be the only compensation payable to Executive with respect to his
employment hereunder, and Executive shall not be entitled to receive any
compensation in addition to that set forth in this Section 3 for any services
rendered by him in any capacity to the Company or any affiliated corporation
unless agreed to in writing by the Company or such affiliated corporation.
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4. Term and Termination of this Agreement. The term of
employment of Executive pursuant to this Agreement shall commence on the
Effective Date and shall continue for a term of four (4) years, or until sooner
terminated as provided herein.
(a) Executive's employment hereunder may be terminated:
(i) Upon the death or Disability of Executive;
(ii) By the Company, immediately for Cause;
(iii) By Executive upon ninety (90) days prior
written notice to the Company;
(iv) By Company immediately upon written notice
to Executive; or
(v) By mutual agreement between Executive and
the Company.
(b) Except as set forth below, upon termination of
Executive's employment hereunder pursuant to this Section 4, the Company shall
have no further obligation to Executive or his personal representative with
respect to remuneration due under this Agreement, except for Base Salary earned
but unpaid at date of termination, provided however, Executive's covenants in
Sections 5 and 6 of this Agreement shall survive the termination of Executive's
employment hereunder. Upon termination of Executive's employment hereunder
pursuant to Section 4(a)(iv) above, Executive shall be entitled to receive
severance pay (the "Severance Amount") consisting of an amount equal to (i) the
then current annualized Base Salary plus (ii) the average of the annual bonus
actually paid to or accrued for Executive hereunder for the two (2) most recent
fiscal years of the Company ending prior to the date of termination, paid
together over a period of twelve (12) months in accordance with the Company's
standard payroll practices in effect at the time of termination. If Executive
elects to continue coverage on the Company's health plan upon termination of
employment pursuant to Section 4(a)(iv) above, the Company will pay the monthly
premiums for the first twelve months of the eligible continuation period or
until Executive obtains employment and has satisfied any necessary waiting
periods under the new employer's health plan, whichever is sooner. It is
understood that Executive's coverage under the Company's disability, accidental
death or dismemberment and group life insurance plans cease as of the date of
termination. If Executive fails to observe the requirements of Sections 5 or 6
hereof, then the Company shall have no obligation to pay any portion of the
Severance Amount remaining unpaid to Executive.
5. Ownership, Non-Disclosure, and Non-Use of Trade Secrets.
(a) The following terms used in this Section 5 shall
have the definitions set forth below:
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(i) "Excluded Information" means any data or
information that is a Trade Secret hereunder (1) that has been
voluntarily disclosed to the public by the Company or has become
generally known to the public (except where such public disclosure has
been made by or through the Executive or by a third person or entity
with the knowledge of the Executive without authorization by the
Company); (2) that has been independently developed and disclosed by
parties other than the Executive or the Company to the Executive or to
the public generally without a breach of any obligation of
confidentiality by any such person running directly or indirectly to
the Company; or (3) that otherwise enters the public domain through
lawful means.
(ii) "Trade Secrets" means information which derives
economic value, actual or potential, from not being generally known
and not being readily ascertainable to other persons who can obtain
economic value from its disclosure or use and which is the subject of
efforts that are reasonable under the circumstances to maintain its
secrecy or confidentiality. Trade Secrets may include either technical
or non-technical data, including without limitation, (1) any useful
process, machine, chemical formula, composition of matter, or other
device which (A) is new or which Executive has a reasonable basis to
believe may be new, (B) is being used or studied by the Company and is
not described in a printed patent or in any literature already
published and distributed externally by the Company, and (C) is not
readily ascertainable from inspection of a product of the Company; (2)
any engineering, technical, or product specifications including those
of features used in any current product of the Company or to be used,
or the use of which is contemplated, in a future product of the
Company; (3) any application, operating system, communication system,
or other computer software (whether in source or object code) and all
flow charts, algorithms, coding sheets, routines, subroutines,
compilers, assemblers, design concepts, test data, documentation, or
manuals related thereto, whether or not copyrighted, patented or
patentable, related to or used in the Business of the Company; or (4)
information concerning the customers, suppliers, products, pricing
strategies of the Company, personnel assignments and policies of the
Company, or matters concerning the financial affairs and management of
the Company or any parent, subsidiary, or affiliate of the Company;
provided however, that Trade Secrets shall not include any Excluded
Information.
(b) Executive acknowledges and agrees that all Trade Secrets,
and all physical embodiments thereof, are confidential to and shall be and
remain the sole and exclusive property of the Company and that any Trade
Secrets produced by the Executive during the period of Executive's employment
by the Company shall be considered "work for hire" as such term is defined in
17 U.S.C. Section 101, the ownership and copyright of which shall be vested
solely in the Company. Executive agrees (i) immediately to disclose to the
Company all Trade Secrets developed in whole or part by Executive during the
term of Executive's's employment by the Company, and (ii) at the request and
expense of the Company, to do all things and sign all documents or instruments
reasonably necessary in the opinion of the Company to eliminate any ambiguity
as to the rights of the Company in such Trade Secrets including, without
limitation, providing to the Company Executive's full cooperation in any
litigation or other proceeding to establish, protect, or obtain such rights.
Upon request by the Company, and in any event upon termination of Executive's
employment by the Company for any reason, Executive shall promptly deliver to
the Company all
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property belonging to the Company including, without limitation, all Trade
Secrets (and all embodiments thereof) then in Executive's custody, control or
possession.
(c) Executive agrees that all Trade Secrets of the Company
received or developed by Executive as a result of Executive's employment with
the Company will be held in trust and strictest confidence, that Executive will
protect such Trade Secrets from disclosure, and that Executive will make no use
of such Trade Secrets, except in connection with Executive's employment
hereunder, without the Company's prior written consent. The obligations of
confidentiality contained in this Agreement will apply during Executive's
employment by the Company and (i) with respect to all Trade Secrets consisting
of scientific or technical data, at any and all times after expiration or
termination (for whatever reason) of such employment; and (ii) with respect to
all other Trade Secrets, for a period of two (2) years after such expiration or
termination, unless a longer period of protection is provided by law.
6. Noncompete; Nonsolicitation Covenants.
(a) The following terms used in this Section 6 shall
have the definitions set forth below:
(i) "Affiliate" means any person or entity
directly or indirectly controlling, controlled by, or under common
control with Executive. As used herein, the word "control" means the
power to direct the management and affairs of a person.
(ii) "Area" means all of North America.
(iii) "Competing Enterprise" means any person or
any business organization of whatever form, engaged directly or
indirectly within the Area in the Business of the Company.
(b) Executive covenants that Executive shall, during the term
of this Agreement and for a period of one (1) year following the termination,
for whatever reason, of Executive's employment by the Company, observe the
following separate and independent covenants:
(i) Neither Executive nor any Affiliate will,
without the prior written consent of the Company, within the Area,
either directly or indirectly, (A) become financially interested in a
Competing Enterprise (other than as a holder of less than five percent
of the outstanding voting securities of any entity whose voting
securities are listed on a national securities exchange or quoted by
the National Association of Securities Dealers, Inc. automated
quotation system), or (B) engage in or be employed by any Competing
Enterprise as a consultant, officer, director, or executive or
managerial employee.
(ii) Neither Executive nor any Affiliate will,
without the prior written consent of the Company, either directly or
indirectly, on Executive's own behalf or in the service or on behalf
of others, solicit, divert, or appropriate, or attempt to solicit,
divert, or appropriate, to any Competing Enterprise within the Area,
any person or entity
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whose account with the Company was serviced by or under Executive's
direction or supervision during the term of this Agreement.
(iii) Neither Executive nor any Affiliate will,
without the Company's prior written consent, either directly or
indirectly, on Executive's own behalf or in the service or on behalf
of others, solicit, divert, or hire away, or attempt to solicit,
divert, or hire away, to any Competing Enterprise, any person employed
by the Company, whether or not such employee is a full-time or a
temporary employee of the Company and whether or not such employment
is pursuant to written agreement and whether or not such employment is
at will.
7. Remedies. Executive acknowledges and agrees that the Company
is engaged in the Business of the Company in and throughout the Area, and that
by virtue of the training, duties, and responsibilities attendant with
Executive's employment by the Company and the special knowledge of the business
and operations of the Company that Executive will have as a consequence of
Executive's employment by the Company, great loss and irreparable damage would
be suffered by the Company if the Executive should breach or violate any of the
terms or provisions of the covenants and agreements set forth herein. Executive
further acknowledges and agrees that each such covenant and agreement is
reasonably necessary to protect and preserve the interest of the Company.
Therefore, in addition to all the remedies provided at law or in equity,
Executive agrees and consents that the Company shall be entitled to a temporary
restraining order and a permanent injunction to prevent a breach or
contemplated breach of any of the covenants or agreements of Executive
contained herein. The existence of any claim, demand, action or cause of action
of Executive against the Company shall not constitute a defense to the
enforcement by the Company of any of the covenants or agreements herein whether
predicated upon this Agreement or otherwise, and shall not constitute a defense
to the enforcement by the Company of any of its rights hereunder.
8. General Provisions.
(a) In the event that any one or more of the provisions, or
parts of any provisions, contained in the Agreement shall for any reason be
held to be invalid, illegal, or unenforceable in any respect by a court of
competent jurisdiction, the same shall not invalidate or otherwise affect any
other provision hereof, and this Agreement shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained herein.
Specifically, but without limiting the foregoing in any way, each of the
covenants of the parties to this Agreement contained herein shall be deemed and
shall be construed as a separate and independent covenant and should any part
or provision of any of such covenants be held or declared invalid by any court
of competent jurisdiction, such invalidity shall in no way render invalid or
unenforceable any other part or provision thereof or any other covenant of the
parties not held or declared invalid.
(b) This Agreement and the rights and obligations of the
Company hereunder may be assigned by the Company to any subsidiary of or
successor to the Company, and shall inure to the benefit of, shall be binding
upon, and shall be enforceable by any such assignee, provided that any such
assignee shall agree to assume and be bound by this Agreement. This Agreement
and the rights and obligations of Executive hereunder may not be assigned by
Executive.
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(c) The waiver by the Company of any breach of this Agreement
by Executive shall not be effective unless in writing, and no such waiver shall
operate or be construed as a waiver of the same or another breach on a
subsequent occasion.
(d) This Agreement and the rights of the parties hereunder
shall be governed by and construed in accordance with the laws of the State of
Texas. The parties agree that any appropriate state court located in Dallas
County, Texas or any Federal Court located in Dallas, Texas shall have
exclusive jurisdiction of any case or controversy arising under or in
connection with this Agreement and shall be a proper forum in which to
adjudicate such case or controversy. The parties consent to the jurisdiction of
such courts.
(e) This Agreement embodies the entire agreement of the
parties relating to the employment of Executive by the Company. No amendment or
modification of this Agreement shall be valid or binding upon the Company or
Executive unless made in writing and signed by the parties. All prior
understandings and agreements relating to the employment of Executive by the
Company (including the Prior Agreement) are hereby expressly terminated and
superseded.
(f) Any notice, request, demand, or other communication
required to be given hereunder shall be made in writing and shall be deemed to
have been fully given if personally delivered or if mailed by United States
Mail, certified or registered, postage prepaid, to the parties at the following
addresses (or at such other addresses as shall be given in writing by any party
to the other party hereto):
If to Executive:
Xxxxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxx #000
Xxxxxx, XX 00000
If to Company:
Xxxxxxx Xxxxxx Building Products, Inc.
00000 Xxxxx Xxxx
Xxxxxx, XX 000000
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(g) This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, and it shall not
be necessary for the same counterpart of this agreement be signed by all of the
undersigned in order for the agreements set forth herein to be binding upon all
of the undersigned in accordance with the terms hereof.
IN WITNESS WHEREOF, the Company and Executive have each executed and
delivered this Agreement as of the date first above written.
COMPANY:
XXXXXXX XXXXXX BUILDING PRODUCTS, INC.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, Vice President &
General Counsel
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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