1
EXHIBIT 10.25(a)
EMPLOYMENT AGREEMENT, dated as of May 7, 1997 (the
"Agreement"), between The ▇. ▇. ▇▇▇▇▇▇▇ Company, Inc., a North
Carolina corporation (the "Employer"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(the "Employee").
The Employer desires to retain the Employee to supply services
to the Employer, and the Employee desires to provide the services to the
Employer, on the terms and subject to the conditions set forth in this
Agreement.
In consideration of (i) the Employee's agreement to supply the
services under this Agreement and (ii) the mutual agreements set forth below,
the sufficiency of which is hereby acknowledged, the Employer and the Employee
agree as follows:
1. Services; Term.
(a) The Employer hereby employs the Employee, and the
Employee hereby agrees to be employed by the Employer, as President and Chief
Executive Officer of the Employer and the Employee will use his best efforts to
perform services for the Employer in accordance with directions given to
Employee from time to time by the Board of Directors of the Employer.
(b) The Employee shall participate in the operation
of the business of the Employer (the "Business"), and assume and perform all
duties and responsibilities consistent with his title and position (the
"Services") as from time to time requested by the Employer.
(c) The Employee shall be employed for the period
commencing on the date of this Agreement (the "Effective Date") and ending on
May 6, 1999, unless sooner terminated pursuant to the provisions of this
Agreement (such period being referred to as the "Employment Period"); provided,
however, that on the second anniversary of the Effective Date (and on each
succeeding anniversary of the Effective Date during the Employment Period), the
Employment Period shall automatically be extended by an additional year (unless
Employer or Employee shall give the other at least 120 days' notice to the
contrary).
2. Performance by Employee. During the Employment Period, the
Employee shall devote all of his business time, attention, knowledge and skills
to, and use his best efforts to perform, the Services and shall promote the
interests of the Employer in carrying out the Services.
2
3. Compensation and Benefits. During the Employment Period:
(a) Base Compensation. As compensation for the
Services, the Employer shall pay to the Employee a base salary, which shall be
at the annual rate of $315,000 (the "Base Salary"), payable in accordance with
the Employer's payroll practices. The Base Salary shall be increased (but not
decreased) for cost of living adjustments, and subject to discretionary
increase, as determined by an annual review by the Board of Directors on or
prior to each anniversary of the Effective Date. In addition to and as a
supplement to Base Compensation, the Employer shall pay to the Employee
supplemental base compensation as set forth in the supplemental compensation
plan.
(b) Bonus Payments. As additional compensation for
the Services, the Employer shall pay to the Employee (i) annual fixed bonus
payments (the "Fixed Bonus") in an amount equal to 30% of the Employee's Base
Salary for such year payable on or around February 1, of the following year;
provided that the amount of the Fixed Bonus in any year shall be reduced by the
amount of supplemental base compensation paid to the Employee in such year, and
(ii) incentive compensation determined as set forth in the Management Incentive
Plan to be adopted by the Company. Each Fixed Bonus payment is contingent upon
Employee's being employed by the Company on the date that such Fixed Bonus
payment is otherwise due.
(c) Restricted Stock and Stock Option. On the date
hereof, the Employee will purchase shares of common stock of the Employer
(pursuant to the Securities Purchase and Stockholders Agreement) and be granted
options (pursuant to the Employer's 1997 Stock Option Plan) to acquire shares of
common stock of the Employer, in each case on terms and conditions to be
embodied in separate agreements between the Employee and the Employer (the
"Other Agreements").
(d) Benefit Plans. The Employee shall be entitled to
receive benefits from the Employer consistent with those currently in effect for
the Employer's senior executives, as those benefits are revised from time to
time by the Board of Directors of the Employer. Except as specifically provided
in this Section 3, nothing contained herein is intended to require the Employer
to maintain any existing benefits or create any new benefits.
(e) Vacations and Holidays. The Employee shall be
entitled to vacation and paid holidays in accordance with the Employer's policy.
4. Termination.
(a) Death or Disability. If the Employee dies during
Employment Period, the Employment Period shall terminate as of the date of the
Employee's death. If the Employee becomes unable to perform the Services for 90
consecutive days due to a physical or mental disability, (i) the Employer may
elect to terminate the Employment Period at any time thereafter, and (ii) the
Employment Period shall terminate as of the date of such election. All
disabilities shall be certified by a physician acceptable to both the Employer
and the Employee, or, in case the Employer and the Employee cannot agree upon
-2-
3
a physician within 15 days, then by a physician selected by physicians
designated by each of the Employer and the Employee. The Employee's failure to
submit to any physical examination by such physician after such physician has
given reasonable notice of the time and place of such examination shall be
conclusive evidence of the Employee's inability to perform his duties hereunder.
(b) Cause. The Employer, at its option, may terminate
the Employment Period and all of the obligations of the Employer under this
Agreement for Cause. The Employer shall have "Cause" to terminate the Employee's
employment hereunder in the event of (i) the Employee's conviction of, or plea
of guilty or nolo contendere to a felony, (ii) the Employee's gross negligence
in the performance of the Services, which is not corrected within 15 business
days after written notice, (iii) the Employee's knowingly dishonest act, or
knowing bad faith or willful misconduct in the performance of the Services to
the material detriment of the Company, which is not corrected within 15 business
days after written notice, or (iv) the Employee's other material breach of his
obligations under this Agreement, which is not corrected within a reasonable
period of time (determined in light of the cure appropriate to such material
breach, but in no event less than 15 business days) after written notice.
(c) Without Cause. The Employer, at its option, may
terminate the Employment Period without Cause at any time.
(d) Termination by Employee for Good Reason. The
Employee may terminate this Agreement upon 60 days' prior written notice to the
Employer for Good Reason (as defined below) if the basis for such Good Reason is
not cured within a reasonable period of time (determined in light of the cure
appropriate to the basis of such Good Reason, but in no event less than 15
business days) after the Employer receives written notice specifying the basis
of such Good Reason. "Good Reason" shall mean (i) the failure of the Employer to
pay any undisputed amount due under this Agreement or a substantial diminution
in benefits provided under this Agreement, (ii) a substantial diminution in the
status, position and responsibilities of the Employee or (iii) the Employer
requiring the Employee to be based at any office or location that requires a
relocation or commute greater than 50 miles from the office or location to which
the Employee is currently assigned.
(e) Payments in the Event of Termination. Upon the
termination of the Employment Period for death, disability or Cause, the
Employer shall pay to the Employee, or his estate, as the case may be, the Base
Salary and Fixed Bonus earned to the date of death or termination for disability
or Cause, as the case may be. Upon the termination of the Employment Period by
the Employer without Cause or by the Employee for Good Reason, the Employer
shall pay to the Employee (A) the Base Salary and Fixed Bonus earned to the date
of such termination, and (B) an additional amount equal to the sum of (1) the
Base Salary at the time of termination for a period beginning on the date of
such termination and ending on May 6, 1999 and (2) the annual rate of the Fixed
Bonus at the time of such termination multiplied by the number of years (or part
thereof) remaining in the Employment Period at the time of such termination;
provided that in the case of clause (1) and (2), the period shall not be less
than twelve months.
-3-
4
(f) Termination of Obligations. In the event of
termination of the Employment Period in accordance with this Section 4, all
obligations of the Employer and the Employee under this Agreement shall
terminate, except for any amounts payable by the Employer as specifically set
forth in Section 4(e); provided, however, that notwithstanding anything to the
contrary contained in this Agreement, the provisions of Section 5 and Section 6
shall survive such termination in accordance with their respective terms and the
relevant provisions of Section 7 shall survive such termination indefinitely. In
the event of termination of the Employment Period in accordance with this
Section 4, the Employee agrees to cooperate with the Employer in order to ensure
an orderly transfer of the Employer's duties and responsibilities.
5. Confidentiality; Non-Disclosure.
(a) (i) Except as provided in this Section 5(a), the
Employee shall not disclose any confidential or proprietary information of the
Employer or of its affiliates or subsidiaries to any person, firm, corporation,
association or other entity (other than the Employer, its subsidiaries, officers
or employees, attorneys, accountants, bank lenders, agents, advisors or
representatives thereof) for any reason or purpose whatsoever (other than in the
normal course of business on a need-to-know basis after the Employer has
received assurances that the confidential or proprietary information shall be
kept confidential), nor shall the Employee make use of any such confidential or
proprietary information for his own purposes or for the benefit of any person,
firm, corporation or other entity, except the Employer, As used in this Section,
the term "confidential or proprietary information" means all information which
is or becomes known to the Employee and relates to matters such as trade
secrets, research and development activities, new or prospective lines of
business (including analysis and market research relating to potential expansion
of the Business), books and records, financial data, customer lists, marketing
techniques, financing, credit policies, vendor lists, suppliers, purchases,
potential business combinations, distribution channels, services, procedures,
pricing information and private processes as they may exist from time to time;
provided that the term "confidential or proprietary information" shall not
include information that is or becomes generally available to the public (other
than as a result of a disclosure in violation of this Agreement by the Employee
or by a person who received such information from the Employee in violation of
this Agreement).
(ii) If the Employee is requested or (in the
opinion of his counsel) required by law or judicial order to disclose any
confidential or proprietary information, the Employee shall provide the Employer
with prompt notice of any such request or requirement so that the Employer may
seek an appropriate protective order or waiver of the Employee's compliance with
the provisions of this Section 5(a). The Employee will not oppose any reasonable
action by, and will cooperate with, the Employer to obtain an appropriate
protective order or other reliable assurance that confidential treatment will be
accorded the confidential or proprietary information. If, failing the entry of a
protective order or the receipt of a waiver hereunder, he is, in the opinion of
his counsel, compelled by law to disclose a portion of the confidential or
proprietary information, the Employee may disclose to the relevant tribunal
without liability hereunder only that portion of the
-4-
5
confidential or proprietary information which counsel advises the Employee he is
legally required to disclose, and each of the parties hereto agrees to exercise
such party's best efforts to obtain assurance that confidential treatment will
be accorded such confidential or proprietary information. During the Employment
Period, and for matters arising from events or circumstances occurring during
the Employment Period, the Employer will provide for the defense of matters
arising under this provision.
(b) The Employee agrees that he will promptly and
fully disclose to the Employer all inventions, ideas, software, trade secrets or
know-how (whether patentable or copyrightable or not) made or conceived by the
Employee (either solely or jointly with others) during the term of this
Agreement and for a period of six months thereafter, all tangible work product
derived therefrom (collectively, the "Ideas"). The Employee agrees that all such
Ideas shall be and remain the sole and exclusive property of the Employer. On
the request of the Employer, the Employee shall, during and after the term of
this Agreement, without charge to the Employer but at the expense of the
Employer, assist the Employer in any reasonable way to vest in the Employer,
title to all such Ideas, and to obtain any patents, trademarks or copyrights
thereon in all countries throughout the world. In this regard, the parties shall
execute and deliver any and all documents that the Employer may reasonably
request.
6. Non-Competition; Non-Solicitation. The Employee
acknowledges and recognizes his possession of confidential or proprietary
information and acknowledges the highly competitive nature of the Business and
accordingly agrees that, in consideration of the premises contained herein and
in consideration for payment by the Employer of the purchase price of the
Shares, he will not, during and for the period commencing on the Effective Date
and ending on the later of (a) May 6, 2000 and (b) the date that is one year
after the termination of the Employment Period, for any reason whatsoever,
either individually or as an officer, director, stockholder, partner, agent or
principal of another business firm, (i) directly or indirectly engage in the
United States, or any country in which the Employer or any of its affiliates or
subsidiaries actively engages in business during the Employment Period, in any
competitive business, (ii) assist others in engaging in any competitive business
in the manner described in clause (i), or (iii) induce any employee of the
Employer or any of its affiliates or subsidiaries to terminate such person's
employment with the Employer or such affiliate or subsidiary or hire any
employee of the Employer or any of its affiliates or subsidiaries to work with
any businesses affiliated with the Employee. The Employee acknowledges that he
has read this Section 6 and has full knowledge and acceptance of the terms
thereof. The Employer will pay the Employee $500 in consideration of the
Employee's agreement with the terms of this Section 6.
7. General Provisions.
(a) Enforceability. It is the desire and intent of
the parties hereto that the provisions of this Agreement shall be enforced to
the fullest extent permissible under the laws and public policies applied in
each jurisdiction in which enforcement is sought. Accordingly, although the
Employee and the Employer consider the restrictions contained in this Agreement
to be reasonable for the purpose of preserving the Employer's goodwill and
proprietary rights, if any particular provision of this Agreement shall be
adjudicated to
-5-
6
be invalid or unenforceable, such provision shall be deemed amended to delete
therefrom the portion thus adjudicated to be invalid or unenforceable, such
deletion to apply only with respect to the operation of such provision in the
particular jurisdiction in which such adjudication is made. It is expressly
understood and agreed that although the Employer and the Employee consider the
restrictions contained in Section 6 to be reasonable, if a final determination
is made by a court of competent jurisdiction that the time or territory or any
other restriction contained in this Agreement is unenforceable against the
Employee, the provisions of this Agreement shall be deemed amended to apply as
to such maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable.
(b) Remedies. The parties acknowledge that the
Employer's damages at law would be an inadequate remedy for the breach by the
Employee of any provision of Section 5 or Section 6, and agree in the event of
such breach that the Employer may obtain temporary and permanent injunctive
relief restraining the Employee from such breach, and, to the extent permissible
under the applicable statutes and rules of procedure, a temporary injunction may
be granted immediately upon the commencement of any such suit. Nothing contained
herein shall be construed as prohibiting the Employer from pursuing any other
remedies available at law or equity for such breach or threatened breach of
Section 5 or Section 6 of this Agreement.
(c) Withholding. The Employer shall withhold such
amounts from any compensation or other benefits referred to herein as payable to
the Employee on account of payroll and other taxes as may be required by
applicable law or regulation of any governmental authority.
(d) Assignment; Benefit. This Agreement is personal
in its nature and the parties hereto shall not, without the written consent of
the other, assign or transfer this Agreement or any rights or obligations
hereunder; provided that the provisions hereof shall inure to the benefit of,
and be binding upon, each successor of the Employer, whether by merger,
consolidation, transfer of all or substantially all of its assets, or otherwise.
(e) Indemnity. The Employer hereby agrees to
indemnify and hold the Employee harmless consistent with the Employer's policy
against any and all liabilities, expenses (including attorneys' fees and costs),
claims, judgments, fines, and amounts paid in settlement actually and reasonably
incurred in connection with any proceeding arising out of the Employee's
employment with the Employer (whether civil, criminal, administrative or
investigative, other than proceedings by or in the right of the Employer), if
with respect to the actions at issue in the proceeding the Employee acted in
good faith and in a manner Employee reasonably believed to be in, or not opposed
to, the best interests of the Company, and with respect to any criminal action)
Employee had no reason to believe Employee's conduct was unlawful. Said
indemnification arrangement shall (i) survive the termination of this Agreement,
(ii) apply to any and all qualifying acts of the Employee which have taken place
during any period in which he was employed by the Employer, irrespective of the
date of this Agreement or the term hereof, including, but not limited to, any
and all qualifying acts as an officer and/or director of any affiliate while the
Employee
-6-
7
is employed by the Company and (iii) be subject to any limitations imposed from
time to time under applicable law.
(f) Notices. All notices or other communications
which are required or permitted hereunder shall be in writing and sufficient if
delivered personally or sent by registered or certified mail, postage prepaid,
return receipt requested, sent by overnight courier, or sent by facsimile (with
confirmation of receipt), addressed as follows:
If to the Employer:
The ▇. ▇. ▇▇▇▇▇▇▇ Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Employee:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If such notice
or communication is mailed, such communication shall be deemed to have been
given on the fifth business day following the date on which such communication
is posted.
(g) Dispute Resolution; Attorney's Fees. The Employer
and the Employee agree that any dispute arising as to the parties' rights and
obligations hereunder shall be resolved by binding arbitration before a private
judge to be determined by mutually agreeable means. In such event, each of the
Employer and the Employee shall have the right to full discovery. The Employee
shall have the right, in addition to any other relief granted by such
arbitrator, to attorneys' fees; provided, however, that the Employer shall have
the right, in addition to any other relief granted by such arbitrator, to
reasonable attorneys' fees in the event that a claim brought by the Employee is
definitely decided in the Employer's favor (with the amount of such fees being
limited to those expended
-7-
8
defending the claim or claims decided in favor of the Employer). Any judgment by
such arbitrator may be entered into any court with jurisdiction over the
dispute.
(h) Acknowledgment. Employee acknowledges that he has
been advised by Employer to seek the advice of independent counsel prior to
reaching agreement with Employer on any of the terms of this Agreement.
(i) Amendments and Waivers. No modification,
amendment or waiver, of any provision of, or consent required by, this
Agreement, nor any consent to any departure herefrom, shall be effective unless
it is in writing and signed by the parties hereto. Such modification, amendment,
waiver or consent shall be effective only in the specific instance and for the
purpose for which given.
(j) Descriptive Headings; Certain Interpretations.
Descriptive headings are for convenience only and shall not control or affect
the meaning or construction of any provision of this Agreement.
(k) Counterparts; Entire Agreement. This Agreement
may be executed in any number of counterparts, and each such counterpart hereof
shall be deemed to be an original instrument, but all such counterparts together
shall constitute one agreement. This Agreement and the Other Agreements contain
the entire agreement among the parties with respect to the transactions
contemplated by this Agreement and the Other Agreements and supersede all prior
agreements or understandings among the parties with respect to the Employee's
employment by the Employer.
(l) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NORTH
CAROLINA.
(m) CONSENT TO JURISDICTION. EACH OF THE EMPLOYER AND
THE EMPLOYEE HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF
NORTH CAROLINA FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND THE EMPLOYEE
AGREES NOT TO COMMENCE ANY LEGAL PROCEEDING RELATING THERETO EXCEPT IN SUCH
COURT. EACH OF THE EMPLOYER AND THE EMPLOYEE IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH HE MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM
THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
-8-
9
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first written above.
THE ▇. ▇. ▇▇▇▇▇▇▇ COMPANY, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By:________________________________
Name:
Title:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-9-
10
EXHIBIT 10.25(b)
EMPLOYMENT AGREEMENT, dated as of May 20,
1998 (the "Agreement"), between The ▇. ▇.
▇▇▇▇▇▇▇ Company, Inc., a North Carolina
corporation (the "Employer"), and J.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Employee").
The Employer desires to retain the Employee to supply services
to the Employer, and the Employee desires to provide such services to the
Employer, on the terms and subject to the conditions set forth in this
Agreement.
In consideration of (i) the Employee's agreement to supply
services under this Agreement and (ii) the mutual agreements set forth below,
the sufficiency of which is hereby acknowledged, the Employer and the Employee
agree as follows:
SECTION 1. Employment Relationship.
(a) The Employer hereby employs the Employee, and the Employee
hereby agrees to be employed by the Employer, as Senior Vice President, General
Counsel and Secretary of the Employer, and the Employee will devote all of his
business time, attention, knowledge and skills and use his best efforts during
the Employment Period to perform services for the Employer in accordance with
directions given to the Employee from time to time by the Board of Directors of
the Employer.
(b) The period commencing on the date of this Agreement and
ending on the date on which this Agreement is terminated is referred to herein
as the "Employment Period." During the Employment Period, the Employee will be
an at-will employee of the Employer. The Employment Period shall be freely
terminable for any reason by either party at any time.
SECTION 2. Compensation and Benefits. During the Employment
Period:
(a) Base Compensation. The Employer shall pay to the Employee
a base salary of $224,000 per annum (the "Base Salary"), payable in accordance
with the Employer's payroll practices and prorated for the period commencing on
the date of this Agreement and ending on December 31, 1998. The Base Salary
shall be increased (but not decreased) for cost of living adjustments, and
subject to additional discretionary increases (but not decreases) as determined
by an annual review by the Board of Directors on or prior to each anniversary of
the Effective Date.
(b) Additional Compensation. As additional compensation for
the Services, the Employer shall pay to the Employee (i) annual fixed bonus
payments (the "Fixed Bonus") in an amount equal to 15% of the Employee's Base
Salary for such year, payable on or around February 1 of the following year, and
(ii) incentive compensation determined as set forth in the Company's Management
Incentive Plan. Each Fixed Bonus
11
payment is contingent upon Employee's being employed by the Company on the date
that such Fixed Bonus payment is otherwise due. The Employee will be entitled to
such additional incentive compensation as the Board of Directors of the Employer
determines in its discretion to pay the Employee. The Employee acknowledges that
the Employer may terminate or modify its management bonus and incentive plans at
any time although no termination or amendment affecting the Employee will be
made effective unless it is consistently applied to other employees
participating in such plans.
(c) Restricted Stock and Stock Options. During the Employment
Period, the Employee shall be eligible to participate in the ▇.▇. ▇▇▇▇▇▇▇
Company 1997 Stock Option Plan (the "Stock Plan") and to receive grants of
options to purchase Class A Common Stock of the Employer on terms no less
favorable than those granted to members of the Employer's Executive Committee or
other division Presidents of the Employer. Such grants may be awarded from time
to time pursuant to the Stock Plan in the sole discretion of the Employer's
Executive Committee.
(d) Benefit Plans. During the Employment Period, the Employee
shall be entitled to receive benefits from the Employer consistent with those
currently in effect for the Employer's senior executives (including deferred
compensation plans and company automobile perquisites), as those benefits are
revised from time to time by the Board of Directors of the Employer. Nothing
contained herein is intended to require the Employer to maintain any existing
benefits or create any new benefits. The Employee will be entitled to
participate in the Employer's deferred compensation program as a Level I
Employee.
(e) Other Benefits. The Employer will provide a vehicle of the
Employee's choice for the Employee's use at a cost (including expenses and
insurance) of up to $40,000. The Employee will be responsible for any costs in
excess of $40,000.
(f) Vacation and Holidays. The Employee shall be entitled to a
minimum of four weeks' vacation each year and paid holidays in accordance with
the Employer's policy.
SECTION 3. Termination.
(a) Death or Disability. If the Employee dies during the
Employment Period, the Employment Period shall terminate as of the date of the
Employee's death. If the Employee becomes unable to perform his duties for 90
consecutive days due to a physical or mental disability, (i) the Employer may
elect to terminate the Employment Period at any time thereafter, and (ii) the
Employment Period shall terminate as of the date of such election. All
disabilities shall be certified by a physician acceptable to both the Employer
and the Employee, or, if the Employer and the Employee cannot agree upon a
physician within 15 days, by a physician selected by physicians designated by
each of the Employer and the Employee. The Employee's failure to submit to any
physical examination by such physician after such physician has given reasonable
notice of the
-2-
12
time and place of such examination shall be conclusive evidence of
the Employee's inability to perform his duties hereunder.
(b) Cause. The Employer, at its option, may terminate the
Employment Period and all of the obligations of the Employer under this
Agreement for Cause. The Employer shall have "Cause" to terminate the Employee's
employment hereunder in the event of (i) the Employee's conviction of or plea of
guilty or nolo contendere to a felony, (ii) the Employee's gross negligence in
the performance of the Services, which is not corrected within 15 business days
after written notice, (iii) the Employee's knowingly dishonest act, or knowing
bad faith or willful misconduct in the performance of the Services, which is not
corrected within 15 business days after written notice, or (iv) the Employee's
other material breach of his obligations under this Agreement, which is not
corrected within a reasonable period of time (determined in light of the cure
appropriate to such material breach, but in no event less than 15 business days)
after written notice. If the Employee is charged with a felony, then during the
period while such charge or related indictment remains outstanding and until
finally determined, the Employer shall have the right to suspend the Employee
without compensation.
(c) Without Cause. The Employer, at its option, may terminate
the Employment Period without Cause at any time.
(d) Termination by Employee for Good Reason. The Employee may
terminate this Agreement upon 60 days' prior written notice to the Employer for
Good Reason (as defined below) if the basis for such Good Reason is not cured
within a reasonable period of time (determined in light of the cure appropriate
to the basis of such Good Reason, but in no event less than 15 business days)
after the Employer receives written notice specifying the basis of such Good
Reason. "Good Reason" shall mean (i) the failure of the Employer to pay any
undisputed amount due under this Agreement, (ii) a substantial diminution in the
status, position and responsibilities of the Employee or (iii) the Employer
requiring the Employee to be based at any office or location that requires a
relocation or commute greater than 50 miles from the office or location to which
the Employee is currently assigned.
(e) Payments in the Event of Termination. Upon the termination
of the Employment Period pursuant to this Section 3, the Employer shall pay to
the Employee, or his estate, the Base Salary and Fixed Bonus earned to the date
of death or termination for disability or Cause, as the case may be. Upon the
termination of the Employment Period by the Employer without Cause or by the
Employee for Good Reason, the Employer shall pay to the Employee or his estate
an additional amount equal to the Base Salary and Target Bonus, in each case,
that would have been payable to the Employee for the twelve-month period
beginning on the date of such termination. The Employer, at its option, may make
any payments due under this Section 3(e) either in a lump sum or as they would
have been paid had the Employee not been terminated.
-3-
13
(f) Termination of Obligations. In the event of termination of
the Employment Period in accordance with this Section 3, all obligations of the
Employer and the Employee under this Agreement shall terminate, except for any
amounts payable by the Employer as specifically set forth in Section 3(e);
provided, however, that notwithstanding anything to the contrary contained in
this Agreement, the provisions of Section 4 and Section 5 shall survive such
termination in accordance with their respective terms and the relevant
provisions of Section 6 shall survive such termination indefinitely. In the
event of termination of the Employment Period in accordance with this Section 3,
the Employee agrees to cooperate with the Employer in order to ensure an orderly
transfer of the Employee's duties and responsibilities.
SECTION 4. Confidentiality; Non-Disclosure.
(a) (i) Except as provided in this Section 4(a), the Employee
shall not disclose any confidential or proprietary information of the Employer
or of its affiliates or subsidiaries to any person, firm, corporation,
association or other entity (other than the Employer, its subsidiaries, officers
or employees, attorneys, accountants, bank lenders, agents, advisors or
representatives thereof) for any reason or purpose whatsoever (other than in the
normal course of business on a need-to-know basis after the Employer has
received assurances that the confidential or proprietary information shall be
kept confidential), nor shall the Employee make use of any such confidential or
proprietary information for his own purposes or for the benefit of any person,
firm, corporation or other entity, except the Employer. As used in this Section,
the term "confidential or proprietary information" means all information which
is or becomes known to the Employee and relates to matters such as trade
secrets, research and development activities, new or prospective lines of
business (including analysis and market research relating to potential expansion
of the Business), books and records, financial data, customer lists, marketing
techniques, financing, credit policies, vendor lists, suppliers, purchases,
potential business combinations, distribution channels, services, procedures,
pricing information and private processes as they may exist from time to time;
provided that the term "confidential or proprietary information" shall not
include information that is or becomes generally available to the public (other
than as a result of a disclosure in violation of this Agreement by the Employee
or by a person who received such information from the Employee in violation of
this Agreement).
(ii) If the Employee is requested or (in the opinion of his
counsel) required by law or judicial order to disclose any confidential or
proprietary information, the Employee shall provide the Employer with prompt
notice of any such request or requirement so that the Employer may seek an
appropriate protective order or waiver of the Employee's compliance with the
provisions of this Section 4(a). The Employee will not oppose any reasonable
action by, and will cooperate with, the Employer to obtain an appropriate
protective order or other reliable assurance that confidential treatment will be
accorded the confidential or proprietary information. If, failing the entry of a
protective order or the receipt of a waiver hereunder, he is, in the opinion of
his counsel, compelled by law to disclose a portion of the confidential or
proprietary information, the Employee
-4-
14
may disclose to the relevant tribunal without liability hereunder only that
portion of the confidential or proprietary information which counsel advises the
Employee he is legally required to disclose, and each of the parties hereto
agrees to exercise such party's best efforts to obtain assurance that
confidential treatment will be accorded such confidential or proprietary
information. During the Employment Period, and for matters arising from events
or circumstances occurring during the Employment Period, the Employer will
provide for the defense of matters arising under this provision.
(b) The Employee agrees that he will promptly and fully
disclose to the Employer all inventions, ideas, software, trade secrets or
know-how (whether patentable or copyrightable or not) made or conceived by the
Employee (either solely or jointly with others) during the Employment Period and
for a period of six months thereafter, all tangible work product derived
therefrom (collectively, the "Ideas"). The Employee agrees that all such Ideas
shall be and remain the sole and exclusive property of the Employer. On the
request of the Employer, the Employee shall, during and after the term of this
Agreement, without charge to the Employer but at the expense of the Employer,
assist the Employer in any reasonable way to vest in the Employer, title to all
such Ideas, and to obtain any patents, trademarks or copyrights thereon in all
countries throughout the world. In this regard, the parties shall execute and
deliver any and all documents that the Employer may reasonably request.
SECTION 5. Non-Competition; Non-Solicitation. The Employee
acknowledges and recognizes his possession of confidential or proprietary
information and acknowledges the highly competitive nature of the Business and
accordingly agrees that, in consideration of the premises contained herein and
in consideration for payment by the Employer of the purchase price of the
Shares, he will not, during and for the period commencing on the Effective Date
and ending on the date that is the later of one year after the termination of
the Employment Period or the date of expiration of the Non-Compete Period (as
defined in Section 3.6 of the Merger Agreement), for any reason whatsoever,
either individually or as an officer, director, stockholder, partner, agent or
principal of another business firm, (i) directly or indirectly engage in the
United States, or any country in which the Employer or any of its affiliates or
subsidiaries actively engages in business during the Employment Period, in any
competitive business; (ii) assist others in engaging in any competitive business
in the manner described in clause (i); or (iii) induce any employee of the
Employer or any of its affiliates or subsidiaries to terminate such person's
employment with the Employer or such affiliate or subsidiary or hire any
employee of the Employer or any of its affiliates or subsidiaries to work with
any businesses affiliated with the Employee. The Employee's ownership of not
more than 1% of the outstanding capital stock of any public corporation shall
not in itself be deemed to be engaging in any competitive business for purposes
of this Section 5.
SECTION 6. Change in Control Payment.
(a) If the Employment Period is terminated (i) upon or prior to a
Change in Control and the Employee reasonably demonstrates that such termination
occurred at the
-5-
15
request of a third party participating in, or otherwise in anticipation of, such
Change in Control or (ii) for the reasons set forth below occurring within one
year after a Change in Control (as defined), by the company, then the Employee
shall be entitled to a payment (the "Change in Control Payment") in an amount
equal to the Base Salary that would have been payable to the Employee for the
twenty-four month period beginning on the date of such termination plus the
target bonus (as defined in the Employer's Executive Bonus Plan) (the "Target
Bonus") that would have been payable to the Employee for the twelve-month period
beginning on the date of termination. A substantial diminution in the status,
position, compensation and responsibilities of the Employee or the requirement
that the Employee relocate more than 50 miles, all within one year after a
Change in Control shall be deemed termination by the company of the Employment
Period for purposes of determining whether a Change in Control Payment is due
under this Section 6(a). The Employer may elect to make any payments due under
this Section 6(a) either in a lump sum or as they would have been paid had the
Employment Period not been terminated. Notwithstanding the foregoing, any change
in Control Payment due under this Section 6(a) shall be limited to the extent
the Board (in its sole judgment) deems necessary to preserve the deductibility
by the Company of such Change in Control Payment pursuant to Section 280G of the
Internal Revenue Code of 1986, as amended, or any successor statute.
(b) "Change in Control" means any of the following: (i) the sale of all
or substantially all of the Company's assets to any person or entity not
directly or indirectly controlled by the holders of at least 50% of the Combined
Voting Power of the then outstanding shares of capital stock of the Company,
(ii) at any time prior to the consummation of an initial public offering of
Class A Common Stock of the Company or other common stock of the Company having
the voting power to elect directors, a transaction (except pursuant to such
initial public offering) resulting in ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ owning, collectively, less than 50% of the Combined
Voting Power of the then outstanding shares of capital stock of the Company or
(iii) at any time after the consummation of an initial public offering of Class
A Common Stock of the Company or other common stock of the Company having the
voting power to elect directors, the acquisition (except pursuant to such
initial public offering) by any person or entity not directly or indirectly
controlled by the Company's stockholders of more than 35% of the Combined Voting
Power of the then outstanding shares of capital stock of the Company. "Combined
Voting Power" with respect to capital stock of the Company means the number of
votes such stock is normally entitled (without regard to the occurrence of any
contingency) to vote in an election of directors of the Company.
SECTION 7. General Provisions.
(a) Enforceability. It is the desire and intent of the parties
hereto that the provisions of this Agreement shall be enforced to the fullest
extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, although the Employee
and the Employer consider the restrictions
-6-
16
contained in this Agreement to be reasonable for the purpose of preserving the
Employer's goodwill and proprietary rights, if any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such deletion to apply only with respect to the
operation of such provision in the particular jurisdiction in which such
adjudication is made. It is expressly understood and agreed that although the
Employer and the Employee consider the restrictions contained in Section 5 to be
reasonable, if a final determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is unenforceable against the Employee, the provisions of this
Agreement shall be deemed amended to apply as to such maximum time and territory
and to such maximum extent as such court may judicially determine or indicate to
be enforceable.
(b) Remedies. The parties acknowledge that the Employer's
damages at law would be an inadequate remedy for the breach by the Employee of
any provision of Section 4 or Section 5, and agree in the event of such breach
that the Employer may obtain temporary and permanent injunctive relief
restraining the Employee from such breach, and, to the extent permissible under
the applicable statutes and rules of procedure, a temporary injunction may be
granted immediately upon the commencement of any such suit. Nothing contained
herein shall be construed as prohibiting the Employer from pursuing any other
remedies available at law or equity for such breach or threatened breach of
Section 4 or Section 5 of this Agreement.
(c) Withholding. The Employer shall withhold such amounts from
any compensation or other benefits referred to herein as payable to the Employee
on account of payroll and other taxes as may be required by applicable law or
regulation of any governmental authority.
(d) Assignment; Benefit. This Agreement is personal in its
nature and neither party shall, without the prior written consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder. The
provisions hereof shall inure to the benefit of, and be binding upon, each
successor of the Employer, whether by merger, consolidation, transfer of all or
substantially all of its shares or assets, or otherwise.
(e) Indemnity. The Employer hereby agrees to indemnify and
hold the Employee harmless consistent with the Employer's policy against any and
all liabilities, expenses (including attorneys' fees and costs), claims,
judgments, fines, and amounts paid in settlement actually and reasonably
incurred in connection with any proceeding arising out of the Employee's
employment with the Employer (whether civil, criminal, administrative or
investigative, other than proceedings by or in the right of the Employer), if
with respect to the actions at issue in the proceeding the Employee acted in
good faith and in a manner Employee reasonably believed to be in, or not opposed
to, the best interests of the Company, and (with respect to any criminal action)
Employee had no reason to believe Employee's conduct was unlawful. Said
indemnification arrangement shall (i) survive the termination of this Agreement,
(ii) apply to any and all qualifying
-7-
17
acts of the Employee which have taken place during any period in which he was
employed by the Employer, irrespective of the date of this Agreement or the term
hereof, including, but not limited to, any and all qualifying acts as an officer
and/or director of any affiliate while the Employee is employed by the Company
and (iii) be subject to any limitations imposed from time to time under
applicable law.
(f) Dispute Resolution; Attorney's Fees. The Employer and the
Employee agree that any dispute arising as to the parties' rights and
obligations hereunder shall be resolved by binding arbitration before a private
judge to be determined by mutually agreeable means. In such event, each of the
Employer and the Employee shall have the right to full discovery. The Employee
shall have the right, in addition to any other relief granted by such
arbitrator, to attorney's fees; provided however, that the Employer shall have
the right, in addition to any other relief granted by such arbitrator, to
reasonable attorney's fees in the event that a claim brought by the Employee is
definitively decided in the Employer's favor (with the amount of such fees being
limited to those expended defending the claim or claims decided in favor of the
Employer). Any judgement by such arbitrator may be entered into any court with
jurisdiction over the dispute.
(g) Acknowledgment. Employee acknowledges that he has been
advised by Employer to seek the advice of independent counsel prior to reaching
agreement with Employer on any of the terms of this agreement.
(h) Amendments and Waivers. No modification, amendment or
waiver of any provision of, or consent required by, this Agreement, nor any
consent to any departure herefrom, shall be effective unless it is in writing
and signed by the parties hereto. Such modification, amendment, waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.
(i) Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by registered or certified mail, postage prepaid, return
receipt requested, sent by overnight courier, or sent by facsimile (with
confirmation of receipt), addressed as follows:
If to the Employer:
The ▇. ▇. ▇▇▇▇▇▇▇ Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-8-
18
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Employee:
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
-------------------------------
-------------------------------
Facsimile: (704)
---------------
or at such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If such notice
or communication is mailed, such communication shall be deemed to have been
given on the fifth business day following the date on which such communication
is posted.
(g) Amendments and Waivers. No modification, amendment or waiver,
of any provision of, or consent required by, this Agreement, nor any consent to
any departure herefrom, shall be effective unless it is in writing and signed by
the parties hereto. Such modification, amendment, waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
(h) Descriptive Headings; Certain Interpretations. Descriptive
headings are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
(i) Counterparts; Entire Agreement. This Agreement may be executed
in any number of counterparts, and each such counterpart hereof shall be deemed
to be an original instrument, but all such counterparts together shall
constitute one agreement. This Agreement contains the entire agreement among the
parties with respect to the transactions contemplated by this Agreement and
supersedes all other agreements or understandings among the parties with respect
to the Employee's employment by the Employer.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NORTH CAROLINA.
(k) CONSENT TO JURISDICTION. EACH OF THE EMPLOYER AND THE
EMPLOYEE HEREBY IRREVOCABLY AND UNCONDITIONALLY
-9-
19
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF NORTH CAROLINA FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND
THE EMPLOYEE AGREES NOT TO COMMENCE ANY LEGAL PROCEEDING RELATING THERETO EXCEPT
IN SUCH COURT. EACH OF THE EMPLOYER AND THE EMPLOYEE IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH HE MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
-10-
20
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first written above.
THE ▇. ▇. ▇▇▇▇▇▇▇ COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name:
Title:
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-11-
21
EXHIBIT 10.25(c)
EMPLOYMENT AGREEMENT, dated as of July 1, 1998 (the
"Agreement"), between The ▇. ▇. ▇▇▇▇▇▇▇ Company, Inc., a North
Carolina corporation (the "Employer"), and ▇▇▇▇▇▇ ▇. Roof (the
"Employee").
The Employer desires to retain the Employee to supply services
to the Employer, and the Employee desires to provide such services to the
Employer, on the terms and subject to the conditions set forth in this
Agreement.
In consideration of (i) the Employee's agreement to supply
services under this Agreement and (ii) the mutual agreements set forth below,
the sufficiency of which is hereby acknowledged, the Employer and the Employee
agree as follows:
SECTION 1. Employment Relationship.
(a) The Employer hereby employs the Employee, and the Employee
hereby agrees to be employed by the Employer, as Senior Vice President and Chief
Financial Officer of the Employer, and the Employee will devote all of his
business time, attention, knowledge and skills and use his best efforts during
the Employment Period to perform services for the Employer in accordance with
directions given to the Employee from time to time by the Board of Directors of
the Employer.
(b) The period commencing on the date of this Agreement and
ending on the date on which this Agreement is terminated is referred to herein
as the "Employment Period." During the Employment Period, the Employee will be
an at-will employee of the Employer. The Employment Period shall be freely
terminable for any reason by either party at any time.
SECTION 2. Compensation and Benefits. During the Employment
Period:
(a) Base Compensation. The Employer shall pay to the Employee
a base salary of $243,000 per annum (the "Base Salary"), payable in accordance
with the Employer's payroll practices and prorated for the period commencing on
the date of this Agreement and ending on December 31, 1998. The Base Salary
shall be increased (but not decreased) for cost of living adjustments, and
subject to additional discretionary increases (but not decreases) as determined
by an annual review by the Board of Directors on or prior to each anniversary of
the Effective Date.
(b) Additional Compensation. As additional compensation for
the Services, the Employer shall pay to the Employee (i) annual fixed bonus
payments (the "Fixed Bonus") in an amount equal to 28% of the Employee's Base
Salary for such year, payable on or around February 1 of the following year, and
(ii) incentive compensation determined as set forth in the Company's Management
Incentive Plan. Each Fixed Bonus
22
payment is contingent upon Employee's being employed by the Company on the date
that such Fixed Bonus payment is otherwise due. The Employee will be entitled to
such additional incentive compensation as the Board of Directors of the Employer
determines in its discretion to pay the Employee. The Employee acknowledges that
the Employer may terminate or modify its management bonus and incentive plans at
any time although no termination or amendment affecting the Employee will be
made effective unless it is consistently applied to other employees
participating in such plans.
(c) Restricted Stock and Stock Options. During the Employment
Period, the Employee shall be eligible to participate in the ▇.▇. ▇▇▇▇▇▇▇
Company 1997 Stock Option Plan (the "Stock Plan") and to receive grants of
options to purchase Class A Common Stock of the Employer on terms no less
favorable than those granted to members of the Employer's Executive Committee or
other division Presidents of the Employer. Such grants may be awarded from time
to time pursuant to the Stock Plan in the sole discretion of the Employer's
Executive Committee.
(d) Benefit Plans. During the Employment Period, the Employee
shall be entitled to receive benefits from the Employer consistent with those
currently in effect for the Employer's senior executives (including deferred
compensation plans and company automobile perquisites), as those benefits are
revised from time to time by the Board of Directors of the Employer. Nothing
contained herein is intended to require the Employer to maintain any existing
benefits or create any new benefits. The Employee will be entitled to
participate in the Employer's deferred compensation program as a Level I
Employee.
(e) Other Benefits. The Employer will provide a vehicle of the
Employee's choice for the Employee's use at a cost (including expenses and
insurance) of up to $40,000. The Employee will be responsible for any costs in
excess of $40,000.
(f) Vacation and Holidays. The Employee shall be entitled to a
minimum of four weeks' vacation each year and paid holidays in accordance with
the Employer's policy.
SECTION 3. Termination.
(a) Death or Disability. If the Employee dies during the
Employment Period, the Employment Period shall terminate as of the date of the
Employee's death. If the Employee becomes unable to perform his duties for 90
consecutive days due to a physical or mental disability, (i) the Employer may
elect to terminate the Employment Period at any time thereafter, and (ii) the
Employment Period shall terminate as of the date of such election. All
disabilities shall be certified by a physician acceptable to both the Employer
and the Employee, or, if the Employer and the Employee cannot agree upon a
physician within 15 days, by a physician selected by physicians designated by
each of the Employer and the Employee. The Employee's failure to submit to any
physical examination by such physician after such physician has given reasonable
notice of the
-2-
23
time and place of such examination shall be conclusive evidence of the
Employee's inability to perform his duties hereunder.
(b) Cause. The Employer, at its option, may terminate the
Employment Period and all of the obligations of the Employer under this
Agreement for Cause. The Employer shall have "Cause" to terminate the Employee's
employment hereunder in the event of (i) the Employee's conviction of or plea of
guilty or nolo contendere to a felony, (ii) the Employee's gross negligence in
the performance of the Services, which is not corrected within 15 business days
after written notice, (iii) the Employee's knowingly dishonest act, or knowing
bad faith or willful misconduct in the performance of the Services, which is not
corrected within 15 business days after written notice, or (iv) the Employee's
other material breach of his obligations under this Agreement, which is not
corrected within a reasonable period of time (determined in light of the cure
appropriate to such material breach, but in no event less than 15 business days)
after written notice. If the Employee is charged with a felony, then during the
period while such charge or related indictment remains outstanding and until
finally determined, the Employer shall have the right to suspend the Employee
without compensation.
(c) Without Cause. The Employer, at its option, may terminate
the Employment Period without Cause at any time.
(d) Termination by Employee for Good Reason. The Employee may
terminate this Agreement upon 60 days' prior written notice to the Employer for
Good Reason (as defined below) if the basis for such Good Reason is not cured
within a reasonable period of time (determined in light of the cure appropriate
to the basis of such Good Reason, but in no event less than 15 business days)
after the Employer receives written notice specifying the basis of such Good
Reason. "Good Reason" shall mean (i) the failure of the Employer to pay any
undisputed amount due under this Agreement, (ii) a substantial diminution in the
status, position and responsibilities of the Employee or (iii) the Employer
requiring the Employee to be based at any office or location that requires a
relocation or commute greater than 50 miles from the office or location to which
the Employee is currently assigned.
(e) Payments in the Event of Termination. Upon the termination
of the Employment Period pursuant to this Section 3, the Employer shall pay to
the Employee, or his estate, the Base Salary and Fixed Bonus earned to the date
of death or termination for disability or Cause, as the case may be. Upon the
termination of the Employment Period by the Employer without Cause or by the
Employee for Good Reason, the Employer shall pay to the Employee or his estate
an additional amount equal to the Base Salary and Target Bonus, in each case,
that would have been payable to the Employee for the twelve-month period
beginning on the date of such termination. The Employer, at its option, may make
any payments due under this Section 3(e) either in a lump sum or as they would
have been paid had the Employee not been terminated.
-3-
24
(f) Termination of Obligations. In the event of termination of
the Employment Period in accordance with this Section 3, all obligations of the
Employer and the Employee under this Agreement shall terminate, except for any
amounts payable by the Employer as specifically set forth in Section 3(e);
provided, however, that notwithstanding anything to the contrary contained in
this Agreement, the provisions of Section 4 and Section 5 shall survive such
termination in accordance with their respective terms and the relevant
provisions of Section 6 shall survive such termination indefinitely. In the
event of termination of the Employment Period in accordance with this Section 3,
the Employee agrees to cooperate with the Employer in order to ensure an orderly
transfer of the Employee's duties and responsibilities.
SECTION 4. Confidentiality; Non-Disclosure.
(a) (i) Except as provided in this Section 4(a), the Employee
shall not disclose any confidential or proprietary information of the Employer
or of its affiliates or subsidiaries to any person, firm, corporation,
association or other entity (other than the Employer, its subsidiaries, officers
or employees, attorneys, accountants, bank lenders, agents, advisors or
representatives thereof) for any reason or purpose whatsoever (other than in the
normal course of business on a need-to-know basis after the Employer has
received assurances that the confidential or proprietary information shall be
kept confidential), nor shall the Employee make use of any such confidential or
proprietary information for his own purposes or for the benefit of any person,
firm, corporation or other entity, except the Employer. As used in this Section,
the term "confidential or proprietary information" means all information which
is or becomes known to the Employee and relates to matters such as trade
secrets, research and development activities, new or prospective lines of
business (including analysis and market research relating to potential expansion
of the Business), books and records, financial data, customer lists, marketing
techniques, financing, credit policies, vendor lists, suppliers, purchases,
potential business combinations, distribution channels, services, procedures,
pricing information and private processes as they may exist from time to time;
provided that the term "confidential or proprietary information" shall not
include information that is or becomes generally available to the public (other
than as a result of a disclosure in violation of this Agreement by the Employee
or by a person who received such information from the Employee in violation of
this Agreement).
(ii) If the Employee is requested or (in the opinion of his
counsel) required by law or judicial order to disclose any confidential or
proprietary information, the Employee shall provide the Employer with prompt
notice of any such request or requirement so that the Employer may seek an
appropriate protective order or waiver of the Employee's compliance with the
provisions of this Section 4(a). The Employee will not oppose any reasonable
action by, and will cooperate with, the Employer to obtain an appropriate
protective order or other reliable assurance that confidential treatment will be
accorded the confidential or proprietary information. If, failing the entry of a
protective order or the receipt of a waiver hereunder, he is, in the opinion of
his counsel, compelled by law to disclose a portion of the confidential or
proprietary information, the Employee
-4-
25
may disclose to the relevant tribunal without liability hereunder only that
portion of the confidential or proprietary information which counsel advises the
Employee he is legally required to disclose, and each of the parties hereto
agrees to exercise such party's best efforts to obtain assurance that
confidential treatment will be accorded such confidential or proprietary
information. During the Employment Period, and for matters arising from events
or circumstances occurring during the Employment Period, the Employer will
provide for the defense of matters arising under this provision.
(b) The Employee agrees that he will promptly and fully
disclose to the Employer all inventions, ideas, software, trade secrets or
know-how (whether patentable or copyrightable or not) made or conceived by the
Employee (either solely or jointly with others) during the Employment Period and
for a period of six months thereafter, all tangible work product derived
therefrom (collectively, the "Ideas"). The Employee agrees that all such Ideas
shall be and remain the sole and exclusive property of the Employer. On the
request of the Employer, the Employee shall, during and after the term of this
Agreement, without charge to the Employer but at the expense of the Employer,
assist the Employer in any reasonable way to vest in the Employer, title to all
such Ideas, and to obtain any patents, trademarks or copyrights thereon in all
countries throughout the world. In this regard, the parties shall execute and
deliver any and all documents that the Employer may reasonably request.
SECTION 5. Non-Competition; Non-Solicitation. The Employee
acknowledges and recognizes his possession of confidential or proprietary
information and acknowledges the highly competitive nature of the Business and
accordingly agrees that, in consideration of the premises contained herein and
in consideration for payment by the Employer of the purchase price of the
Shares, he will not, during and for the period commencing on the Effective Date
and ending on the date that is the later of one year after the termination of
the Employment Period or the date of expiration of the Non-Compete Period (as
defined in Section 3.6 of the Merger Agreement), for any reason whatsoever,
either individually or as an officer, director, stockholder, partner, agent or
principal of another business firm, (i) directly or indirectly engage in the
United States, or any country in which the Employer or any of its affiliates or
subsidiaries actively engages in business during the Employment Period, in any
competitive business; (ii) assist others in engaging in any competitive business
in the manner described in clause (i); or (iii) induce any employee of the
Employer or any of its affiliates or subsidiaries to terminate such person's
employment with the Employer or such affiliate or subsidiary or hire any
employee of the Employer or any of its affiliates or subsidiaries to work with
any businesses affiliated with the Employee. The Employee's ownership of not
more than 1% of the outstanding capital stock of any public corporation shall
not in itself be deemed to be engaging in any competitive business for purposes
of this Section 5.
SECTION 6. Change in Control Payment.
(a) If the Employment Period is terminated (i) upon or prior to a
Change in Control and the Employee reasonably demonstrates that such termination
occurred at the
-5-
26
request of a third party participating in, or otherwise in anticipation of, such
Change in Control or (ii) for the reasons set forth below occurring within one
year after a Change in Control (as defined), by the company, then the Employee
shall be entitled to a payment (the "Change in Control Payment") in an amount
equal to the Base Salary that would have been payable to the Employee for the
twenty-four month period beginning on the date of such termination plus the
target bonus (as defined in the Employer's Executive Bonus Plan) (the "Target
Bonus") that would have been payable to the Employee for the twelve-month period
beginning on the date of termination. A substantial diminution in the status,
position, compensation and responsibilities of the Employee or the requirement
that the Employee relocate more than 50 miles, all within one year after a
Change in Control shall be deemed termination by the company of the Employment
Period for purposes of determining whether a Change in Control Payment is due
under this Section 6(a). The Employer may elect to make any payments due under
this Section 6(a) either in a lump sum or as they would have been paid had the
Employment Period not been terminated. Notwithstanding the foregoing, any change
in Control Payment due under this Section 6(a) shall be limited to the extent
the Board (in its sole judgment) deems necessary to preserve the deductibility
by the Company of such Change in Control Payment pursuant to Section 280G of the
Internal Revenue Code of 1986, as amended, or any successor statute.
(b) "Change in Control" means any of the following: (i) the sale of all
or substantially all of the Company's assets to any person or entity not
directly or indirectly controlled by the holders of at least 50% of the Combined
Voting Power of the then outstanding shares of capital stock of the Company,
(ii) at any time prior to the consummation of an initial public offering of
Class A Common Stock of the Company or other common stock of the Company having
the voting power to elect directors, a transaction (except pursuant to such
initial public offering) resulting in ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ owning, collectively, less than 50% of the Combined
Voting Power of the then outstanding shares of capital stock of the Company or
(iii) at any time after the consummation of an initial public offering of Class
A Common Stock of the Company or other common stock of the Company having the
voting power to elect directors, the acquisition (except pursuant to such
initial public offering) by any person or entity not directly or indirectly
controlled by the Company's stockholders of more than 35% of the Combined Voting
Power of the then outstanding shares of capital stock of the Company. "Combined
Voting Power" with respect to capital stock of the Company means the number of
votes such stock is normally entitled (without regard to the occurrence of any
contingency) to vote in an election of directors of the Company.
SECTION 7. General Provisions.
(a) Enforceability. It is the desire and intent of the parties
hereto that the provisions of this Agreement shall be enforced to the fullest
extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought.
-6-
27
Accordingly, although the Employee and the Employer consider the restrictions
contained in this Agreement to be reasonable for the purpose of preserving the
Employer's goodwill and proprietary rights, if any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such deletion to apply only with respect to the
operation of such provision in the particular jurisdiction in which such
adjudication is made. It is expressly understood and agreed that although the
Employer and the Employee consider the restrictions contained in Section 5 to be
reasonable, if a final determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is unenforceable against the Employee, the provisions of this
Agreement shall be deemed amended to apply as to such maximum time and territory
and to such maximum extent as such court may judicially determine or indicate to
be enforceable.
(b) Remedies. The parties acknowledge that the Employer's
damages at law would be an inadequate remedy for the breach by the Employee of
any provision of Section 4 or Section 5, and agree in the event of such breach
that the Employer may obtain temporary and permanent injunctive relief
restraining the Employee from such breach, and, to the extent permissible under
the applicable statutes and rules of procedure, a temporary injunction may be
granted immediately upon the commencement of any such suit. Nothing contained
herein shall be construed as prohibiting the Employer from pursuing any other
remedies available at law or equity for such breach or threatened breach of
Section 4 or Section 5 of this Agreement.
(c) Withholding. The Employer shall withhold such amounts from
any compensation or other benefits referred to herein as payable to the Employee
on account of payroll and other taxes as may be required by applicable law or
regulation of any governmental authority.
(d) Assignment; Benefit. This Agreement is personal in its
nature and neither party shall, without the prior written consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder. The
provisions hereof shall inure to the benefit of, and be binding upon, each
successor of the Employer, whether by merger, consolidation, transfer of all or
substantially all of its shares or assets, or otherwise.
(e) Indemnity. The Employer hereby agrees to indemnify and
hold the Employee harmless consistent with the Employer's policy against any and
all liabilities, expenses (including attorneys' fees and costs), claims,
judgments, fines, and amounts paid in settlement actually and reasonably
incurred in connection with any proceeding arising out of the Employee's
employment with the Employer (whether civil, criminal, administrative or
investigative, other than proceedings by or in the right of the Employer), if
with respect to the actions at issue in the proceeding the Employee acted in
good faith and in a manner Employee reasonably believed to be in, or not opposed
to, the best interests of the Company, and (with respect to any criminal action)
Employee had no reason to believe Employee's conduct was unlawful. Said
indemnification arrangement
-7-
28
shall (i) survive the termination of this Agreement, (ii) apply to any and all
qualifying acts of the Employee which have taken place during any period in
which he was employed by the Employer, irrespective of the date of this
Agreement or the term hereof, including, but not limited to, any and all
qualifying acts as an officer and/or director of any affiliate while the
Employee is employed by the Company and (iii) be subject to any limitations
imposed from time to time under applicable law.
(f) Dispute Resolution; Attorney's Fees. The Employer and the
Employee agree that any dispute arising as to the parties' rights and
obligations hereunder shall be resolved by binding arbitration before a private
judge to be determined by mutually agreeable means. In such event, each of the
Employer and the Employee shall have the right to full discovery. The Employee
shall have the right, in addition to any other relief granted by such
arbitrator, to attorney's fees; provided however, that the Employer shall have
the right, in addition to any other relief granted by such arbitrator, to
reasonable attorney's fees in the event that a claim brought by the Employee is
definitively decided in the Employer's favor (with the amount of such fees being
limited to those expended defending the claim or claims decided in favor of the
Employer). Any judgement by such arbitrator may be entered into any court with
jurisdiction over the dispute.
(g) Acknowledgment. Employee acknowledges that he has been
advised by Employer to seek the advice of independent counsel prior to reaching
agreement with Employer on any of the terms of this agreement.
(h) Amendments and Waivers. No modification, amendment or
waiver of any provision of, or consent required by, this Agreement, nor any
consent to any departure herefrom, shall be effective unless it is in writing
and signed by the parties hereto. Such modification, amendment, waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.
(i) Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by registered or certified mail, postage prepaid, return
receipt requested, sent by overnight courier, or sent by facsimile (with
confirmation of receipt), addressed as follows:
If to the Employer:
The ▇. ▇. ▇▇▇▇▇▇▇ Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-8-
29
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Employee:
▇▇▇▇▇▇ ▇. Roof
__________________________________
__________________________________
Facsimile: (704) _________________
or at such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If such notice
or communication is mailed, such communication shall be deemed to have been
given on the fifth business day following the date on which such communication
is posted.
(g) Amendments and Waivers. No modification, amendment or
waiver, of any provision of, or consent required by, this Agreement, nor any
consent to any departure herefrom, shall be effective unless it is in writing
and signed by the parties hereto. Such modification, amendment, waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.
(h) Descriptive Headings; Certain Interpretations. Descriptive
headings are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
(i) Counterparts; Entire Agreement. This Agreement may be
executed in any number of counterparts, and each such counterpart hereof shall
be deemed to be an original instrument, but all such counterparts together shall
constitute one agreement. This Agreement contains the entire agreement among the
parties with respect to the transactions contemplated by this Agreement and
supersedes all other agreements or understandings among the parties with respect
to the Employee's employment by the Employer.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NORTH CAROLINA.
(k) CONSENT TO JURISDICTION. EACH OF THE EMPLOYER AND THE
EMPLOYEE HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES
-9-
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ FOR THE DISTRICT OF NORTH CAROLINA FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, AND THE EMPLOYEE AGREES NOT TO COMMENCE ANY LEGAL
PROCEEDING RELATING THERETO EXCEPT IN SUCH COURT. EACH OF THE EMPLOYER AND THE
EMPLOYEE IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH HE MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
-10-
31
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first written above.
THE ▇. ▇. ▇▇▇▇▇▇▇ COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name:
Title:
/s/ ▇▇▇▇▇▇ ▇. ROOF
-------------------
▇▇▇▇▇▇ ▇. Roof
-11-
32
EXHIBIT 10.25(d)
EMPLOYMENT AGREEMENT, dated as of May 20, 1998 (the "Agreement"),
between The ▇. ▇. ▇▇▇▇▇▇▇ Company, Inc., a North Carolina corporation
(the "Employer"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Employee").
The Employer desires to retain the Employee to supply services to the
Employer, and the Employee desires to provide such services to the Employer, on
the terms and subject to the conditions set forth in this Agreement.
In consideration of (i) the Employee's agreement to supply services
under this Agreement and (ii) the mutual agreements set forth below, the
sufficiency of which is hereby acknowledged, the Employer and the Employee agree
as follows:
SECTION 1. Employment Relationship.
(a) The Employer hereby employs the Employee, and the Employee hereby
agrees to be employed by the Employer, as Senior Vice President Sales and
Marketing of the Employer, and the Employee will devote all of his business
time, attention, knowledge and skills and use his best efforts during the
Employment Period to perform services for the Employer in accordance with
directions given to the Employee from time to time by the Board of Directors of
the Employer.
(b) The period commencing on the date of this Agreement and ending on
the date on which this Agreement is terminated is referred to herein as the
"Employment Period." During the Employment Period, the Employee will be an
at-will employee of the Employer. The Employment Period shall be freely
terminable for any reason by either party at any time.
SECTION 2. Compensation and Benefits. During the Employment Period:
(a) Base Compensation. The Employer shall pay to the Employee a base
salary of $191,000 per annum (the "Base Salary"), payable in accordance with the
Employer's payroll practices and prorated for the period commencing on the date
of this Agreement and ending on December 31, 1998. The Base Salary shall be
increased (but not decreased) for cost of living adjustments, and subject to
additional discretionary increases (but not decreases) as determined by an
annual review by the Board of Directors on or prior to each anniversary of the
Effective Date.
(b) Additional Compensation. As additional compensation for the
Services, the Employer shall pay to the Employee (i) annual fixed bonus payments
(the "Fixed Bonus") in an amount equal to 15% of the Employee's Base Salary for
such year, payable on or around February 1 of the following year, 1998 and (ii)
incentive compensation determined as set forth in the Company's Management
Incentive Plan. Each
33
Fixed Bonus payment is contingent upon Employee's being employed by the Company
on the date that such Fixed Bonus payment is otherwise due. The Employee will be
entitled to such additional incentive compensation as the Board of Directors of
the Employer determines in its discretion to pay the Employee. The Employee
acknowledges that the Employer may terminate or modify its management bonus and
incentive plans at any time although no termination or amendment affecting the
Employee will be made effective unless it is consistently applied to other
employees participating in such plans.
(c) Restricted Stock and Stock Options. During the Employment Period,
the Employee shall be eligible to participate in the ▇.▇. ▇▇▇▇▇▇▇ Company 1997
Stock Option Plan (the "Stock Plan") and to receive grants of options to
purchase Class A Common Stock of the Employer on terms no less favorable than
those granted to members of the Employer's Executive Committee or other division
Presidents of the Employer. Such grants may be awarded from time to time
pursuant to the Stock Plan in the sole discretion of the Employer's Executive
Committee.
(d) Benefit Plans. During the Employment Period, the Employee shall be
entitled to receive benefits from the Employer consistent with those currently
in effect for the Employer's senior executives (including deferred compensation
plans and company automobile perquisites), as those benefits are revised from
time to time by the Board of Directors of the Employer. Nothing contained herein
is intended to require the Employer to maintain any existing benefits or create
any new benefits. The Employee will be entitled to participate in the Employer's
deferred compensation program as a Level I Employee.
(e) Other Benefits. The Employer will provide a vehicle of the
Employee's choice for the Employee's use at a cost (including expenses and
insurance) of up to $40,000. The Employee will be responsible for any costs in
excess of $40,000.
(f) Vacation and Holidays. The Employee shall be entitled to a minimum
of four weeks' vacation each year and paid holidays in accordance with the
Employer's policy.
SECTION 3. Termination.
(a) Death or Disability. If the Employee dies during the Employment
Period, the Employment Period shall terminate as of the date of the Employee's
death. If the Employee becomes unable to perform his duties for 90 consecutive
days due to a physical or mental disability, (i) the Employer may elect to
terminate the Employment Period at any time thereafter, and (ii) the Employment
Period shall terminate as of the date of such election. All disabilities shall
be certified by a physician acceptable to both the Employer and the Employee,
or, if the Employer and the Employee cannot agree upon a physician within 15
days, by a physician selected by physicians designated by each of the Employer
and the Employee. The Employee's failure to submit to any physical examination
by such physician after such physician has given reasonable notice of the
-2-
34
time and place of such examination shall be conclusive evidence of the
Employee's inability to perform his duties hereunder.
(b) Cause. The Employer, at its option, may terminate the Employment
Period and all of the obligations of the Employer under this Agreement for
Cause. The Employer shall have "Cause" to terminate the Employee's employment
hereunder in the event of (i) the Employee's conviction of or plea of guilty or
nolo contendere to a felony, (ii) the Employee's gross negligence in the
performance of the Services, which is not corrected within 15 business days
after written notice, (iii) the Employee's knowingly dishonest act, or knowing
bad faith or willful misconduct in the performance of the Services, which is not
corrected within 15 business days after written notice, or (iv) the Employee's
other material breach of his obligations under this Agreement, which is not
corrected within a reasonable period of time (determined in light of the cure
appropriate to such material breach, but in no event less than 15 business days)
after written notice. If the Employee is charged with a felony, then during the
period while such charge or related indictment remains outstanding and until
finally determined, the Employer shall have the right to suspend the Employee
without compensation.
(c) Without Cause. The Employer, at its option, may terminate the
Employment Period without Cause at any time.
(d) Termination by Employee for Good Reason. The Employee may terminate
this Agreement upon 60 days' prior written notice to the Employer for Good
Reason (as defined below) if the basis for such Good Reason is not cured within
a reasonable period of time (determined in light of the cure appropriate to the
basis of such Good Reason, but in no event less than 15 business days) after the
Employer receives written notice specifying the basis of such Good Reason. "Good
Reason" shall mean (i) the failure of the Employer to pay any undisputed amount
due under this Agreement, (ii) a substantial diminution in the status, position
and responsibilities of the Employee or (iii) the Employer requiring the
Employee to be based at any office or location that requires a relocation or
commute greater than 50 miles from the office or location to which the Employee
is currently assigned.
(e) Payments in the Event of Termination. Upon the termination of the
Employment Period pursuant to this Section 3, the Employer shall pay to the
Employee, or his estate, the Base Salary and Fixed Bonus earned to the date of
death or termination for disability or Cause, as the case may be. Upon the
termination of the Employment Period by the Employer without Cause or by the
Employee for Good Reason, the Employer shall pay to the Employee or his estate
an additional amount equal to the Base Salary and Target Bonus, in each case,
that would have been payable to the Employee for the twelve-month period
beginning on the date of such termination. The Employer, at its option, may make
any payments due under this Section 3(e) either in a lump sum or as they would
have been paid had the Employee not been terminated.
-3-
35
(f) Termination of Obligations. In the event of termination of the
Employment Period in accordance with this Section 3, all obligations of the
Employer and the Employee under this Agreement shall terminate, except for any
amounts payable by the Employer as specifically set forth in Section 3(e);
provided, however, that notwithstanding anything to the contrary contained in
this Agreement, the provisions of Section 4 and Section 5 shall survive such
termination in accordance with their respective terms and the relevant
provisions of Section 6 shall survive such termination indefinitely. In the
event of termination of the Employment Period in accordance with this Section 3,
the Employee agrees to cooperate with the Employer in order to ensure an orderly
transfer of the Employee's duties and responsibilities.
SECTION 4. Confidentiality; Non-Disclosure.
(a) (i) Except as provided in this Section 4(a), the Employee shall not
disclose any confidential or proprietary information of the Employer or of its
affiliates or subsidiaries to any person, firm, corporation, association or
other entity (other than the Employer, its subsidiaries, officers or employees,
attorneys, accountants, bank lenders, agents, advisors or representatives
thereof) for any reason or purpose whatsoever (other than in the normal course
of business on a need-to-know basis after the Employer has received assurances
that the confidential or proprietary information shall be kept confidential),
nor shall the Employee make use of any such confidential or proprietary
information for his own purposes or for the benefit of any person, firm,
corporation or other entity, except the Employer. As used in this Section, the
term "confidential or proprietary information" means all information which is or
becomes known to the Employee and relates to matters such as trade secrets,
research and development activities, new or prospective lines of business
(including analysis and market research relating to potential expansion of the
Business), books and records, financial data, customer lists, marketing
techniques, financing, credit policies, vendor lists, suppliers, purchases,
potential business combinations, distribution channels, services, procedures,
pricing information and private processes as they may exist from time to time;
provided that the term "confidential or proprietary information" shall not
include information that is or becomes generally available to the public (other
than as a result of a disclosure in violation of this Agreement by the Employee
or by a person who received such information from the Employee in violation of
this Agreement).
(ii) If the Employee is requested or (in the opinion of his counsel)
required by law or judicial order to disclose any confidential or proprietary
information, the Employee shall provide the Employer with prompt notice of any
such request or requirement so that the Employer may seek an appropriate
protective order or waiver of the Employee's compliance with the provisions of
this Section 4(a). The Employee will not oppose any reasonable action by, and
will cooperate with, the Employer to obtain an appropriate protective order or
other reliable assurance that confidential treatment will be accorded the
confidential or proprietary information. If, failing the entry of a protective
order or the receipt of a waiver hereunder, he is, in the opinion of his
counsel, compelled by law to disclose a portion of the confidential or
proprietary information, the Employee
-4-
36
may disclose to the relevant tribunal without liability hereunder only that
portion of the confidential or proprietary information which counsel advises the
Employee he is legally required to disclose, and each of the parties hereto
agrees to exercise such party's best efforts to obtain assurance that
confidential treatment will be accorded such confidential or proprietary
information. During the Employment Period, and for matters arising from events
or circumstances occurring during the Employment Period, the Employer will
provide for the defense of matters arising under this provision.
(b) The Employee agrees that he will promptly and fully disclose to the
Employer all inventions, ideas, software, trade secrets or know-how (whether
patentable or copyrightable or not) made or conceived by the Employee (either
solely or jointly with others) during the Employment Period and for a period of
six months thereafter, all tangible work product derived therefrom
(collectively, the "Ideas"). The Employee agrees that all such Ideas shall be
and remain the sole and exclusive property of the Employer. On the request of
the Employer, the Employee shall, during and after the term of this Agreement,
without charge to the Employer but at the expense of the Employer, assist the
Employer in any reasonable way to vest in the Employer, title to all such Ideas,
and to obtain any patents, trademarks or copyrights thereon in all countries
throughout the world. In this regard, the parties shall execute and deliver any
and all documents that the Employer may reasonably request.
SECTION 5. Non-Competition; Non-Solicitation. The Employee acknowledges
and recognizes his possession of confidential or proprietary information and
acknowledges the highly competitive nature of the Business and accordingly
agrees that, in consideration of the premises contained herein and in
consideration for payment by the Employer of the purchase price of the Shares,
he will not, during and for the period commencing on the Effective Date and
ending on the date that is the later of one year after the termination of the
Employment Period or the date of expiration of the Non-Compete Period (as
defined in Section 3.6 of the Merger Agreement), for any reason whatsoever,
either individually or as an officer, director, stockholder, partner, agent or
principal of another business firm, (i) directly or indirectly engage in the
United States, or any country in which the Employer or any of its affiliates or
subsidiaries actively engages in business during the Employment Period, in any
competitive business; (ii) assist others in engaging in any competitive business
in the manner described in clause (i); or (iii) induce any employee of the
Employer or any of its affiliates or subsidiaries to terminate such person's
employment with the Employer or such affiliate or subsidiary or hire any
employee of the Employer or any of its affiliates or subsidiaries to work with
any businesses affiliated with the Employee. The Employee's ownership of not
more than 1% of the outstanding capital stock of any public corporation shall
not in itself be deemed to be engaging in any competitive business for purposes
of this Section 5.
SECTION 6. Change in Control Payment.
(a) If the Employment Period is terminated (i) upon or prior to a
Change in Control and the Employee reasonably demonstrates that such termination
occurred at the
-5-
37
request of a third party participating in, or otherwise in anticipation of, such
Change in Control or (ii) for the reasons set forth below occurring within one
year after a Change in Control (as defined), by the company, then the Employee
shall be entitled to a payment (the "Change in Control Payment") in an amount
equal to the Base Salary that would have been payable to the Employee for the
twenty-four month period beginning on the date of such termination plus the
target bonus (as defined in the Employer's Executive Bonus Plan) (the "Target
Bonus") that would have been payable to the Employee for the twelve-month period
beginning on the date of termination. A substantial diminution in the status,
position, compensation and responsibilities of the Employee or the requirement
that the Employee relocate more than 50 miles, all within one year after a
Change in Control shall be deemed termination by the company of the Employment
Period for purposes of determining whether a Change in Control Payment is due
under this Section 6(a). The Employer may elect to make any payments due under
this Section 6(a) either in a lump sum or as they would have been paid had the
Employment Period not been terminated. Notwithstanding the foregoing, any change
in Control Payment due under this Section 6(a) shall be limited to the extent
the Board (in its sole judgment) deems necessary to preserve the deductibility
by the Company of such Change in Control Payment pursuant to Section 280G of the
Internal Revenue Code of 1986, as amended, or any successor statute.
(b) "Change in Control" means any of the following: (i) the sale of all
or substantially all of the Company's assets to any person or entity not
directly or indirectly controlled by the holders of at least 50% of the Combined
Voting Power of the then outstanding shares of capital stock of the Company,
(ii) at any time prior to the consummation of an initial public offering of
Class A Common Stock of the Company or other common stock of the Company having
the voting power to elect directors, a transaction (except pursuant to such
initial public offering) resulting in ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ owning, collectively, less than 50% of the Combined
Voting Power of the then outstanding shares of capital stock of the Company or
(iii) at any time after the consummation of an initial public offering of Class
A Common Stock of the Company or other common stock of the Company having the
voting power to elect directors, the acquisition (except pursuant to such
initial public offering) by any person or entity not directly or indirectly
controlled by the Company's stockholders of more than 35% of the Combined Voting
Power of the then outstanding shares of capital stock of the Company. "Combined
Voting Power" with respect to capital stock of the Company means the number of
votes such stock is normally entitled (without regard to the occurrence of any
contingency) to vote in an election of directors of the Company.
SECTION 7. General Provisions.
(a) Enforceability. It is the desire and intent of the parties hereto
that the provisions of this Agreement shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, although the Employee and the Employer
consider the restrictions
-6-
38
contained in this Agreement to be reasonable for the purpose of preserving the
Employer's goodwill and proprietary rights, if any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such deletion to apply only with respect to the
operation of such provision in the particular jurisdiction in which such
adjudication is made. It is expressly understood and agreed that although the
Employer and the Employee consider the restrictions contained in Section 5 to be
reasonable, if a final determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is unenforceable against the Employee, the provisions of this
Agreement shall be deemed amended to apply as to such maximum time and territory
and to such maximum extent as such court may judicially determine or indicate to
be enforceable.
(b) Remedies. The parties acknowledge that the Employer's damages at
law would be an inadequate remedy for the breach by the Employee of any
provision of Section 4 or Section 5, and agree in the event of such breach that
the Employer may obtain temporary and permanent injunctive relief restraining
the Employee from such breach, and, to the extent permissible under the
applicable statutes and rules of procedure, a temporary injunction may be
granted immediately upon the commencement of any such suit. Nothing contained
herein shall be construed as prohibiting the Employer from pursuing any other
remedies available at law or equity for such breach or threatened breach of
Section 4 or Section 5 of this Agreement.
(c) Withholding. The Employer shall withhold such amounts from any
compensation or other benefits referred to herein as payable to the Employee on
account of payroll and other taxes as may be required by applicable law or
regulation of any governmental authority.
(d) Assignment; Benefit. This Agreement is personal in its nature and
neither party shall, without the prior written consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder. The provisions
hereof shall inure to the benefit of, and be binding upon, each successor of the
Employer, whether by merger, consolidation, transfer of all or substantially all
of its shares or assets, or otherwise.
(e) Indemnity. The Employer hereby agrees to indemnify and hold the
Employee harmless consistent with the Employer's policy against any and all
liabilities, expenses (including attorneys' fees and costs), claims, judgments,
fines, and amounts paid in settlement actually and reasonably incurred in
connection with any proceeding arising out of the Employee's employment with the
Employer (whether civil, criminal, administrative or investigative, other than
proceedings by or in the right of the Employer), if with respect to the actions
at issue in the proceeding the Employee acted in good faith and in a manner
Employee reasonably believed to be in, or not opposed to, the best interests of
the Company, and (with respect to any criminal action) Employee had no reason to
believe Employee's conduct was unlawful. Said indemnification arrangement shall
(i) survive the termination of this Agreement, (ii) apply to any and all
qualifying
-7-
39
acts of the Employee which have taken place during any period in which he was
employed by the Employer, irrespective of the date of this Agreement or the term
hereof, including, but not limited to, any and all qualifying acts as an officer
and/or director of any affiliate while the Employee is employed by the Company
and (iii) be subject to any limitations imposed from time to time under
applicable law.
(f) Dispute Resolution; Attorney's Fees. The Employer and the Employee
agree that any dispute arising as to the parties' rights and obligations
hereunder shall be resolved by binding arbitration before a private judge to be
determined by mutually agreeable means. In such event, each of the Employer and
the Employee shall have the right to full discovery. The Employee shall have the
right, in addition to any other relief granted by such arbitrator, to attorney's
fees; provided however, that the Employer shall have the right, in addition to
any other relief granted by such arbitrator, to reasonable attorney's fees in
the event that a claim brought by the Employee is definitively decided in the
Employer's favor (with the amount of such fees being limited to those expended
defending the claim or claims decided in favor of the Employer). Any judgement
by such arbitrator may be entered into any court with jurisdiction over the
dispute.
(g) Acknowledgment. Employee acknowledges that he has been advised by
Employer to seek the advice of independent counsel prior to reaching agreement
with Employer on any of the terms of this agreement.
(h) Amendments and Waivers. No modification, amendment or waiver of any
provision of , or consent required by, this Agreement, nor any consent to any
departure herefrom, shall be effective unless it is in writing and signed by the
parties hereto. Such modification, amendment, waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
(i) Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by registered or certified mail, postage prepaid, return receipt
requested, sent by overnight courier, or sent by facsimile (with confirmation of
receipt), addressed as follows: If to the Employer:
The ▇. ▇. ▇▇▇▇▇▇▇ Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-8-
40
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Employee:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_______________________________
_______________________________
Facsimile: (704) ______________
or at such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If such notice
or communication is mailed, such communication shall be deemed to have been
given on the fifth business day following the date on which such communication
is posted.
(g) Amendments and Waivers. No modification, amendment or waiver, of
any provision of, or consent required by, this Agreement, nor any consent to any
departure herefrom, shall be effective unless it is in writing and signed by the
parties hereto. Such modification, amendment, waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
(h) Descriptive Headings; Certain Interpretations. Descriptive headings
are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
(i) Counterparts; Entire Agreement. This Agreement may be executed in
any number of counterparts, and each such counterpart hereof shall be deemed to
be an original instrument, but all such counterparts together shall constitute
one agreement. This Agreement contains the entire agreement among the parties
with respect to the transactions contemplated by this Agreement and supersedes
all other agreements or understandings among the parties with respect to the
Employee's employment by the Employer.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NORTH CAROLINA.
(k) CONSENT TO JURISDICTION. EACH OF THE EMPLOYER AND THE EMPLOYEE
HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE UNITED STATES
-9-
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ FOR THE DISTRICT OF NORTH CAROLINA FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, AND THE EMPLOYEE AGREES NOT TO COMMENCE ANY LEGAL
PROCEEDING RELATING THERETO EXCEPT IN SUCH COURT. EACH OF THE EMPLOYER AND THE
EMPLOYEE IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH HE MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
-10-
42
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
THE ▇. ▇. ▇▇▇▇▇▇▇ COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name:
Title:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-11-
43
EXHIBIT 10.25(e)
EMPLOYMENT AGREEMENT, dated as of July 1 1998 (the
"Agreement"), between The ▇. ▇. ▇▇▇▇▇▇▇ Company, Inc., a North
Carolina corporation (the "Employer"), and ▇▇▇▇▇▇ ▇. Bonburg
(the "Employee").
The Employee is currently employed as President of the Winston
Tire Division of the Employer ("Winston").
The Employer sold shares of common stock (the "Shares") of
Winston to the Employer pursuant to the terms and conditions set forth in the
Stock Purchase Agreement, dated as of April 9, 1997 (the "Stock Purchase
Agreement"), between the Employer and the stockholders of Winston.
The Employee and the Employer entered into an Employment
Agreement on May 7, 1997. The Employer and the Employee desire to amend and
restate the Employment Agreement dated May 7, 1997, as provided herein.
In consideration of the sale of the Shares to the Employer,
the Employee's agreement to supply the Services under this Agreement and the
mutual agreements set forth below, the sufficiency of which is hereby
acknowledged, the Employer and the Employee agree as follows:
1. Services; Term.
(a) The Employer hereby employs the Employee, and the Employee
hereby agrees to be employed by the Employer, as President of the Retail
Division of the Employer, and the Employee will use his best efforts to perform
services for the Employer in accordance with directions given to the Employee
from time to time by the Board of Directors of the Employer.
(b) The Employee shall participate in the operation of the
business (the "Business") of the Employer, including the operation of the
business of Winston, and assume and perform all duties and responsibilities
consistent with his title and position (the "Services") as from time to time
requested by the Employer.
(c) The Employee shall be employed until June 30, 2001, unless
sooner terminated pursuant to the provisions of this Agreement (such period
being referred to as the "Employment Period"). At the expiration of the
Employment Period, if the Employee continues in the employ of the Employer, the
Employee will become an employee at will of the Employer.
2. Performance by Employee. During the Employment Period, the
Employee shall devote all of his business time, attention, knowledge and skills
to, and use his best efforts to perform, the Services and shall promote the
interests of the Employer in carrying out the Services.
44
3. Compensation and Benefits. During the Employment Period:
(a) Base Compensation. As compensation for the Services, the
Employer shall pay to the Employee a base salary at the annual rate of $250,000
(subject to upward adjustment in the discretion of the Employer's Board of
Directors) (the "Base Salary"), payable in accordance with the Employer's
payroll practices.
(b) As additional compensation for the Services, the Employer
shall pay to the Employee (i) a fixed bonus (the "Fixed Bonus") of $150,000
annually, payable in installments of $50,000 on each January 1 and $100,000 on
each July 1 during the Employment Period, and (ii) two-thirds of any incentive
compensation payable to the Employee as a Level I participant in the Employer's
Executive Bonus Plan (the "Incentive Bonus"); provided that, unless otherwise
expressly set forth in this Agreement, (x) each Fixed Bonus payment is
contingent upon Employee's being employed by the Employer on a date no later
than the fifteenth day prior to the date such Fixed Bonus payment is otherwise
due and (y) each Incentive Bonus payment is contingent upon Employee's being
employed by the Employer at the end of the relevant period for determining the
amount, if any, of such Incentive Bonus payment. Any amounts paid to the
Employee pursuant to this Section 3(b) through and including the termination of
the Employment Period shall upon such termination be deemed additional severance
payments for purposes of this Agreement.
(c) Benefit Plans. The Employee shall be entitled to receive
benefits from the Employer consistent with those currently in effect for the
Employer's senior executives, as those benefits are revised from time to time by
the Board of Directors of the Employer. Except as specifically provided in this
Section 3, nothing contained herein is intended to require the Employer to
maintain any existing benefits or create any new benefits.
(d) Vacations and Holidays. The Employee shall be entitled to
vacation and paid holidays in accordance with the Employer's policy.
4. Termination.
(a) Death or Disability. If the Employee dies during the
Employment Period, the Employment Period shall terminate as of the date of the
Employee's death. If the Employee becomes unable to perform the Services for 120
consecutive days due to a physical or mental disability, (i) the Employer may
elect to terminate the Employment Period at any time thereafter, and (ii) the
Employment Period shall terminate as of the date of such election. All
disabilities shall be certified by a physician acceptable to both the Employer
and the Employee, or, in case the Employer and the Employee cannot agree upon a
physician within 15 days, by a physician selected by physicians designated by
each of the Employer and the Employee. The Employee's failure to submit to any
physical examination by such physician after such physician has given reasonable
notice of the time and place of such examination shall be conclusive evidence of
the Employee's inability to perform his duties hereunder.
45
(b) Cause. The Employer, at its option, may terminate the
Employment Period and all of the obligations of the Employer under this
Agreement for Cause. The Employer shall have "Cause" to terminate the Employee's
employment hereunder in the event of (i) the Employee's conviction of, or plea
of guilty or nolo contendere to, either a felony or a crime for which a term of
imprisonment of more than one year may be imposed and which involves a
fraudulent act, (ii) the Employee's gross negligence in the performance of the
Services, which is of material detriment to the Employer and is not corrected
within 15 business days after written notice, (iii) the Employee's knowingly
dishonest act, or knowing bad faith or willful misconduct in the performance of
the Services, which is not corrected within 15 business days after written
notice, or (iv) the Employee's other material breach of his obligations under
this Agreement, which is not corrected within a reasonable period of time
(determined in light of the cure appropriate to such material breach, but in no
event less than 15 business days) after written notice. If the Employee is
charged with (x) a felony or (y) a crime for which a term of imprisonment of
more than one year may be imposed and which involves a fraudulent act, then
during the period while such charge or related indictment remains outstanding
and until finally determined, the Employer shall have the right to suspend the
Employee without compensation.
(c) Without Cause. The Employer, at its option, may terminate
the Employment Period without Cause at any time.
(d) Termination by Employee for Good Reason. The Employee may
terminate this Agreement upon 60 days' prior written notice to the Employer for
Good Reason (as defined below) if the basis for such Good Reason is not cured
within a reasonable period of time (determined in light of the cure appropriate
to the basis of such Good Reason, but in no event less than 15 business days)
after the Employer receives written notice specifying the basis of such Good
Reason. "Good Reason" shall mean (i) the failure of the Employer to pay any
undisputed amount due under this Agreement, (ii) a substantial diminution in the
status, position and responsibilities of the Employee or (iii) the Employer
requiring the Employee to be based at any office or location that requires a
relocation or commute greater than 50 miles from the office or location to which
the Employee is currently assigned.
(e) Payments in the Event of Termination. Upon the termination
of the Employment Period by the Employer without Cause or by the Employee for
Good Reason ("Involuntary Termination"), the Employee shall be entitled to
receive a severance payment depending upon the date of termination according to
the schedule set forth below plus an amount equal to the prorated portion of the
Fixed Bonus payable in accordance with Section 3(b)(i) (reduced by any Fixed
Bonus payments made through and including the date of termination). Upon the
termination of the Employment Period by the Employer or the Employee for any
other reason ("Voluntary Termination"), the Employee shall be entitled to
receive a severance payment depending upon the date of termination according to
the schedule set forth below:
46
If termination occurs on: Voluntary Termination Involuntary Termination
------------------------- --------------------- -----------------------
7/1/98 thorough 12/31/98 $637,500 $787,500
1/1/99 through 6/30/99 $637,500 $693,500
7/1/99 through 12/31/99 $487,500 $600,000
1/1/00 through 6/30/00 $487,500 $525,000
7/1/00 through 12/31/00 $350,00 $450,000
1/1/01 through 6/30/01 $350,00 $387,500
7/1/01 and thereafter $150,00 $325,000
The Employer, at its option, may pay such severance amount
either in a lump sum or as such amounts would have been paid had the Employee
not been terminated.
(f) Termination of Obligations. In the event of termination
of the Employment Period in accordance with this Section 4, all obligations of
the Employer and the Employee under this Agreement shall terminate, except for
any severance amounts payable by the Employer as specifically set forth in
Section 4(e); provided, however, that notwithstanding anything to the contrary
contained in this Agreement, the provisions of Section 5 shall survive such
termination in accordance with their respective terms and the relevant
provisions of Section 6 shall survive such termination indefinitely. In the
event of termination of the Employment Period in accordance with this Section 4,
the Employee agrees to cooperate with the Employer in order to ensure an orderly
transfer of the Employee's duties and responsibilities.
5. Confidentiality, Non-Competition and Non-Solicitation.
(a) Confidential Information. (i) The Employee recognizes and
hereby acknowledges that, as a senior executive of the Employer, he will learn
of, and be exposed to, confidential business information concerning the Company
Group's information, ideas, know how, trade secrets, processes, computer
software, methods, practices, techniques, technical plans, customer lists,
pricing techniques and information, marketing plans, financial information, and
all other compilations of information that relate to the Company Group's
business and its current and prospective customers ("Confidential Information").
Employee recognizes and hereby acknowledges that such Confidential Information
is a valuable asset of the Company Group. Employee agrees to safeguard such
Confidential Information for the exclusive benefit of the Company Group and
agrees that he will not disclose, distribute or publish such Confidential
Information to any person, company, business or corporation, provided that
Confidential Information shall not include information that is or becomes
generally available to the public (other than as a result of a disclosure in
violation of this Agreement by Employee or by a person who received such
information from Employee in violation of this Agreement). "Company Group" means
the Employer and its subsidiaries and affiliates, including without limitation
Winston.
47
(ii) Employee agrees that he will promptly and fully disclose
to the Employer all inventions, ideas, software, trade secrets or know-how
(whether patentable or copyrightable or not) made or conceived by Employee
(either solely or jointly with others) and all tangible work product derived
therefrom (collectively, the "Ideas") during the period in which Employee is
employed under this Agreement. Employee agrees that all such Ideas shall be and
remain the sole and exclusive property of the Employer. On the request of the
Employer, Employee shall, during and after the Employment Period, without charge
to the Employer but at the expense of the Employer, assist the Employer in any
reasonable way to vest in the Employer title to all such Ideas, and to obtain
any patents, trademarks or copyrights thereon in all countries throughout the
world. In this regard, the parties shall executive and deliver any and all
documents that the Employer may reasonably request.
(b) Use of Confidential Information for Another Employer.
Employee acknowledges and recognizes his possession of Confidential Information
and acknowledges the highly competitive nature of business of the Company Group.
Accordingly, in order further to protect the Confidential Information of the
Company Group from disclosure or use, Employee agrees that, during the period
commencing on the date of this Agreement and ending on the one-year anniversary
of the effective date of termination of Employee's employment with the Employer
(the "Covenant Period"), he will not, for any reason whatsoever, either
individually or as an officer, director, stockholder, partner, agent or
principal of another business or firm (i) directly or indirectly engage in the
States of Arizona, California, New Mexico, Nevada, Oregon, Utah and Washington
in any Competing Business, or (ii) assist others in engaging in any Competing
Business in the manner described in clause (i). "Competing Business" means any
business that is competitive with the business of the members of the Company
Group (including, without limitation, the wholesale or retail tires or
automotive parts and service businesses).
(c) Solicitation of Customers. Employee agrees that during the
course of his employment with the Employer, he will learn of and be exposed to
confidential business information and trade secrets of the Company Group
concerning the Company Group's customers. Employee further agrees that, should
he seek to divert, take away, or solicit any of the customers of the Company
Group with respect to which he has learned and/or been exposed to such
confidential information, he will of necessity make use of or disclose such
confidential information, to the irreparable detriment of the Company Group.
Accordingly, Employee promises that, during the Covenant Period, he will not,
directly or indirectly, either for himself or for any other person, firm,
company or corporation, divert, take away or solicit, or attempt to divert, take
away or solicit any businesses or individuals that were customers of the Company
Group during the period in which Employee was employed by the Employer.
(d) Solicitation of Employees. Employee agrees and
acknowledges that the Company Group has expended large sums in the recruitment,
training and development of its employees and that the continued employment of
such persons by the Company Group constitutes a substantial benefit to the
Company Group. Employee further agrees and acknowledges that the business of the
Company Group could be severely disrupted and injured in the event that another
person, firm, company or corporation were to attempt to induce any or all of the
Company Group's employees to terminate their employment with the Company Group.
Accordingly, Employee promises and covenants that, during the Covenant Period,
he will not, directly or
48
indirectly, either for himself or for any other person, firm, company or
corporation, contact or communicate with any employee of any member of the
Company Group for the purpose of inducing or otherwise encouraging such employee
to terminate his or her employment with the Employer, provided, however, that
this Section 5(d) shall not preclude the Employee from giving an employment
reference at the request of a prospective employer of such employee.
(e) Acknowledgment. Employee acknowledges that he is entering
into the covenants contained in this Section 5, inter alia, due to his status as
a signatory to the Stock Purchase Agreement and his position, prior to the
Effective Date, as a stockholder of Winston.
6. General Provisions.
(a) Enforceability. It is the desire and intent of the parties
hereto that the provisions of this Agreement shall be enforced to the fullest
extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, although the Employee
and the Employer consider the restrictions contained in this Agreement to be
reasonable for the purpose of preserving the Employer's and Winston's goodwill
and proprietary rights, if any particular provision of this Agreement shall be
adjudicated to be invalid or unenforceable, such provision shall be deemed
amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made. It
is expressly understood and agreed that although the Employer and the Employee
consider the restrictions contained in Section 5 to be reasonable, if a final
determination is made by a court of competent jurisdiction that the time or
territory or any other restriction contained in this Agreement is unenforceable
against the Employee, the provisions of this Agreement shall be deemed amended
to apply as to such maximum time and territory and to such maximum extent as
such court may judicially determine or indicate to be enforceable.
(b) Remedies. The parties acknowledge that the Employer's
damages at law would be an inadequate remedy for the breach by the Employee of
any provision of Section 5, and agree in the event of such breach that the
Employer may obtain temporary and permanent injunctive relief restraining the
Employee from such breach, and, to the extent permissible under the applicable
statutes and rules of procedure, a temporary injunction may be granted
immediately upon the commencement of any such suit. Nothing contained herein
shall be construed as prohibiting the Employer from pursuing any other remedies
available at law or equity for such breach or threatened breach of Section 5 or
Section 6 of this Agreement.
(c) Withholding. The Employer shall withhold such amounts
from any compensation or other benefits referred to herein as payable to the
Employee on account of payroll and other taxes as may be required by applicable
law or regulation of any governmental authority.
(d) Assignment; Benefit. This Agreement is personal in its
nature and the parties hereto shall not, without the written consent of the
other, assign or transfer this Agreement or any rights or obligations hereunder;
provided that the provisions hereof shall inure to the
49
benefit of, and be binding upon, each successor of the Employer, whether by
merger, consolidation, transfer of all or substantially all of its assets, or
otherwise.
(e) Indemnity. The Employer hereby agrees to indemnify and
hold the Employee harmless consistent with the Employer's policy against any and
all liabilities, expenses (including attorneys' fees and costs), claims,
judgments, fines, and amounts paid in settlement actually and reasonably
incurred in connection with any proceeding arising out of the Employee's
employment with the Employer (whether civil, criminal, administrative or
investigative, other than proceedings by or in the right of the Employer), if
with respect to the actions at issue in the proceeding the Employee acted in
good faith and in a manner Employee reasonably believed to be in, or not opposed
to, the best interests of the Employer, and (with respect to any criminal
action) Employee had no reason to believe Employee's conduct was unlawful. Said
indemnification arrangement shall (i) survive the termination of this Agreement,
(ii) apply to any and all qualifying acts of the Employee which have taken place
during any period in which he was employed by the Employer, irrespective of the
date of this Agreement or the term hereof, including, but not limited to, any
and all qualifying acts as an officer and/or director of any affiliate while the
Employee is employed by the Employer (and iii) be subject to any limitations
imposed from time to time under applicable law.
(f) Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by registered or certified mail, postage prepaid, return
receipt requested, sent by overnight courier, or sent by facsimile (with the
confirmation of receipt), addressed as follows:
If to the Employer:
The ▇. ▇. ▇▇▇▇▇▇▇ Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
50
If to the Employee:
▇▇▇▇▇▇ ▇. Bonburg
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If such notice
or communication is mailed, such communications shall be deemed to have been
given on the fifth business day following the date on which such communication
is posted.
(g) Amendments and Waivers. No modification, amendment or
waiver, of any provision of, or consent required by, this Agreement, nor any
consent to any departure therefrom, shall be effective unless it is in writing
and signed by the parties hereto. Such modification, amendment, waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.
(h) Descriptive Headings; Certain Interpretations. Descriptive
headings are for convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
(i) Counterparts; Entire Agreement. This Agreement may be
executed in any number of counterparts, and each such counterpart hereof shall
be deemed to be an original instrument, but all such counterparts together shall
constitute one agreement. This Agreement contains the entire agreement among the
parties with respect to the Employee's employment by the Employer. The
Employment Agreement, dated May 7, 1997, between the Employer and the Employee
is expressly superseded and shall have no further force and effect. This
Agreement shall have no effect on the survival or continued effectiveness of any
provision contained in the Stock Purchase Agreement that continues to bind the
parties in accordance with its terms.
(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA.
(k) CONSENT TO JURISDICTION. EACH OF THE EMPLOYER AND THE
EMPLOYEE HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF
CALIFORNIA FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND THE EMPLOYEE AGREES
NOT TO COMMENCE ANY LEGAL PROCEEDING RELATING THERETO EXCEPT IN SUCH COURT. EACH
OF THE EMPLOYER AND THE EMPLOYEE IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH HE MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
51
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first written above.
THE ▇. ▇. ▇▇▇▇▇▇▇ COMPANY, INC.
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name:
Title:
/s/ ▇▇▇▇▇▇ ▇. BONBURG
▇▇▇▇▇▇ ▇. Bonburg