EXHIBIT 10.9
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of December 21,
1995, by and between GMH ACQUISITION CORP., a Delaware corporation with an
office at X.X. Xxx 0000, Xxxxxxxx, Xxxxxxx 00000-0000 (the "Company") and DREW
XXXX XXXXX, currently residing at 0000-X Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxxx
Xxxxx, Xxxxxxx 00000 (the "Executive").
The parties hereto, intending to be legally bound hereby, and in
consideration of the mutual covenants herein contained, agree as follows:
1. EMPLOYMENT.
1.1 The Company employs the Executive, and the Executive accepts
such employment (the "Employment"), as Vice President - Services of the Company.
The Executive agrees to accept the employment and agrees to remain in the employ
of the Company during the Employment Term (as defined in Section 2 hereof) and
any extensions thereof and to perform such lawful duties as are from time to
time assigned to him by the Chief Executive Officer or the Board of Directors of
the Company (the "Board") and which are normally associated with the position of
Vice President - Services in the manufactured housing industry.
1.2 During the Employment Term and any extensions thereof, the
Executive will devote his best efforts and full business time, skill and
attention to the performance of his duties on behalf of the Company.
2. TERM OF EMPLOYMENT. Subject to the provisions of Section 6
hereof, the term of the Executive's employment hereunder shall be from the date
hereof until December 31, 2000 (the "Employment Term").
3. COMPENSATION.
3.1 The Company agrees to pay, and the Executive agrees to
accept, as base compensation for all services to be rendered by the Executive in
any capacity to the Company or its affiliates during the Employment Term, a
salary of $100,000 per annum, subject to such deductions and withholdings as may
be required by law or by further agreement with the Executive (the "Base
Salary"), payable in arrears in equal bi-weekly installments. The Base Salary
may be increased from time to time in the discretion of the Board. Any such
increases shall be added to the Base Salary then being paid to the Executive,
and the sum thereof shall then become the Base Salary for each successive year,
until further adjusted in accordance with the provisions of this Section 3.1.
3.2 In addition to the Base Salary, the Executive shall
participate in the Company's Executive Bonus Plan, a copy of which is attached
hereto as Exhibit 1, (the "Plan") subject to the terms and conditions of the
Plan. The Executive's "Participant Percentage" under the Plan will never be less
than 20% of the "Bonus Pool" (as such terms are defined in the Plan). The
Company will award not less than a $100,000 incentive award to the Executive for
the 1996 Plan Year regardless of the size of the Bonus Pool.
3.3 The Company shall reimburse the Executive for all reasonable and
necessary expenses incurred by the Executive in connection with the Employment,
including without limitation, travel and lodging expenses and charges incurred
on a Company credit card for business entertainment. Such expenses shall be
reimbursed to the Executive by the Company after the Executive's submittal of an
invoice to the Company with respect to the reimbursable expenses incurred by
him. All invoices for reimbursable
expenses shall include adequate supporting documentation of the expenses
incurred by the Executive, including receipts.
4. ADDITIONAL BENEFITS. During the Employment Term, the Company
shall provide the following additional benefits to the Executive:
4.1 The Executive shall be entitled to four (4) weeks of paid
vacation during each calendar year.
4.2 The Company shall provide the Executive with health, medical
and hospitalization insurance benefits equal to those provided by the Company to
other executive officers of the Company. In addition, the Executive shall be
permitted, if and to the extent eligible, to participate in any pension plan or
other "fringe benefits" of the Company, which may be available generally to
other executive officers of the Company.
4.3 To defray the expenses of operating his personal automobile
in connection with the performance of his duties hereunder, the Executive shall
be entitled to an automobile allowance in the amount of $200.00 per month.
5. INSURANCE. In addition to any insurance coverage provided
for in Section 4 hereof, the Company may, in its discretion, purchase or renew
insurance on the life of the Executive, with the Company or a lender of the
Company as beneficiary in an amount determined by the Company or such lender
from time to time. The Executive agrees to submit to medical examinations and
otherwise to cooperate with the Company and any such lender in connection with
obtaining such insurance.
6. TERMINATION.
6.1 In the event the Executive's employment is terminated for
"Cause", the Executive shall have no further rights under this Agreement, except
the right to receive the Base Salary up to the date of termination by the
Company of the Executive's employment hereunder. The decision to terminate the
Executive under this Section 6.1 shall be made by the Chief Executive Officer of
the Company or by the Board. The term "Cause" shall mean any of the following:
(a) any deliberate or intentional act or omission by the Executive with the
intent of causing damage to the Company's relationships with its lenders,
suppliers or customers; (b) any fraud, misappropriation or embezzlement by the
Executive involving properties, assets or funds of the Company; (c) a conviction
of the Executive, or plea of NOLO CONTENDERE by the Executive, to any crime or
offense involving monies or other property of the Company or any other felony or
criminal act involving moral turpitude; (d) any usurpation by the Executive of a
corporate opportunity of the Company or the Executive's willful and continual
neglect of or willful and continual failure to perform any of his material
duties, responsibilities or obligations as an employee of the Company, but only
after notice of such usurpation, neglect or failure is delivered to the
Executive and the Executive fails or refuses to remedy such usurpation, neglect
or failure to the reasonable satisfaction of the Board within thirty (30) days
after the receipt of such notice; provided, that any action or omission taken by
the Executive in good faith and in the reasonable belief that such action or
omission was in the best interests of the Company shall not constitute "Cause";
or (e) the violation by the Executive of Section 7 of this Agreement or of any
other non-competition agreement or covenant binding upon the Executive.
6.2 In the event the Executive's employment is terminated
without "Cause", the Executive shall have no further rights under this
Agreement except the right to receive (a) the Base Salary for the balance of the
term of this Agreement, payable in arrears, in bi-weekly installments, (b) any
amounts due in accordance with the terms of the Plan, (c) all benefits under
Section 4.1 hereof which have accrued as of the date of termination and (d)
uninterrupted continuation of all rights and benefits accorded the Executive
under Section 4.2 hereof for the duration of this Agreement.
6.3 In the event of the Executive's death during the Employment
Term, the Employment Term shall terminate automatically as of the date of the
Executive's death, and the Executive's executor, administrator or other legal
representative shall have no further rights hereunder, except the right to
receive (a) the Base Salary up to the date of the Executive's death and (b) any
amounts due under the Plan.
6.4 If for any reason (other than pursuant to Section 6.3 or
6.5), the Executive resigns from his employment hereunder, this Agreement shall
terminate automatically, and the Executive shall have no further rights
hereunder, except the right to receive the Base Salary up to the date of the
Executive's resignation.
6.5 If, by reason of any illness, disability or incapacity, the
Executive is unable to perform his duties under this Agreement for a period of
six (6) consecutive months (or shorter periods aggregating to nine (9) months in
any twelve (12) month period) ("Disability"), the Company may terminate the
Employment Term as of the last day of such six (6) or nine (9) month period, as
the case may be, or as of such other day thereafter, provided the Executive
remains unable to perform his duties hereunder. The Executive or his legal
representative, if one is appointed, shall be entitled to receive, within sixty
(60) days after the date of such
termination, any amounts payable to the Executive pursuant to this Agreement up
to the date of termination of this Agreement. Notwithstanding the foregoing, if
the Executive suffers a Disability and his employment hereunder is not
terminated, the Executive shall be entitled to receive any amounts owing to him
hereunder, less any disability insurance payments which Executive receives
pursuant to disability insurance provided by the Company hereunder.
6.6 Upon the termination of the Executive's employment pursuant
to this Section 6, the Executive shall have no further rights under this
Agreement except as expressly provided in this Section 6.
7. NON-COMPETITION, NON-INTERFERENCE AND NON-DISCLOSURE.
7.1 The Executive acknowledges that: (a) the business of
producing and distributing at wholesale, manufactured housing, currently
conducted and as conducted from time to time throughout the term of this
Agreement (collectively, the "Business") is conducted by and is proposed to be
conducted by the Company throughout the states of Florida, Georgia, South
Carolina, North Carolina, Virginia, West Virginia, Alabama, Mississippi,
Louisiana, Kentucky and Tennessee (the "Company's Market"); (b) the Business
involves the identification and development of new products and markets relating
to the production and distribution at wholesale of manufactured housing; (c) the
Company has developed trade secrets and confidential information concerning the
Business; and (d) the agreements and covenants contained in this Section 7 are
essential to protect the Business of the Company. In order to induce the Company
to enter into this Employment Agreement, the Executive covenants and agrees
that:
7.2 For a period commencing on the date of this Agreement and
ending (a) on the date that the Executive's employment is terminated without
Cause, or (b) in the case of the expiration of this Agreement or the Executive's
voluntary resignation or termination with Cause, on the date which is two years
following such expiration, resignation or termination of this Agreement, neither
the Executive nor any entity of which 5% or more of the beneficial ownership is
held by the Executive or a related family member ("Controlled Entity") will,
anywhere in the Company's Market, directly or indirectly own, manage, operate,
control, invest or acquire an interest in, or otherwise engage or participate
in, whether as a proprietor, partner, stockholder, director, officer, "Key
Employee" (defined herein to include any person who is employed in a management,
executive, supervisory, marketing or sales capacity for another person), joint
venturer, investor or other participant, any business which competes with the
Business ("Competitive Business") without regard to (i) whether the Competitive
Business has its office, manufacturing or other business facilities within or
without the Company's Market, (ii) whether any of the activities of the
Executive referred to above occur or are performed within or without the
Company's Market or (iii) whether the Executive resides, or reports to an
office, within or without the Company's Market.
7.3 During the period commencing on the date of this Agreement
and ending on the date which is two years following the expiration or
termination of this Agreement, whether by resignation, termination with or
without Cause, or otherwise (the "Restricted Period"), neither the Executive nor
any Controlled Entity will directly or indirectly solicit, induce or influence
any customer, supplier, lender, lessor or any other person which has a business
relationship with the Company, or which had on the date of this Agreement, a
business relationship with the Company, to discontinue or reduce the extent of
such relationship with the
Company.
7.4 During the Restricted Period, neither the Executive nor any
Controlled Entity will directly or indirectly recruit, solicit or otherwise
induce or influence any employee or sales agent of the Company or any of its
affiliates to discontinue such employment or agency relationship with the
Company. During the Restricted Period, neither the Executive nor any Controlled
Entity will employ or seek to employ, or cause or induce any Competitive
Business to employ or seek to employ for any Competitive Business, any person
who is then (or was at any time within six months prior to the date the
Executive or the Competitive Business employs or seeks to employ such person)
employed by the Company. Nothing herein shall prevent the Executive from
providing a letter of recommendation to an Employee with respect to a future
employment opportunity.
7.5 During the Restricted Period and thereafter, neither the
Executive nor any Controlled Entity will directly or indirectly disclose to
anyone, or use or otherwise exploit for the Executive's or any Controlled
Entity's own benefit or for the benefit of anyone other than the Company, any
confidential information, including, without limitation, any confidential "know-
how", trade secrets, customer lists, details of client or consultant contracts,
pricing policies, operational methods, marketing plans or strategies, product
development techniques or plans, computer software, business acquisition plans
and new personnel acquisition plans of the Company related to the Business or
any portion or phase of any scientific or technical information, design,
process, procedure, formula or improvement of the Company that is valuable and
not generally known to the competitors of the Company whether or not in written
or tangible form (hereinafter referred to as "Confidential Information"). The
term "Confidential Information" does not include, and there shall be no
obligation hereunder with respect to, (a) information that becomes generally
available to the public other than as a result of a disclosure by the Executive
or a Controlled Entity or any agent or other representative thereof and (b)
general business methods applicable to a sales business including, but not
limited to, pricing policies, operational methods and marketing concepts.
Neither the Executive nor any Controlled Entity shall have any obligation
hereunder to keep confidential any Confidential Information to the extent
disclosure of any thereof is required by law, or determined in good faith by the
Executive to be necessary or appropriate to comply with any legal or regulatory
order, regulation or requirement; provided, however, that in the event
disclosure is required by law, the Executive or the Controlled Entity concerned
shall provide the Company with prompt notice of such requirement so that the
Company may seek an appropriate protective order.
7.6 In the event the termination or expiration of this
Agreement, the covenants and agreements contained in this Section 7 shall
survive, shall continue thereafter, and shall not expire unless and except as
expressly set forth in such Sections.
7.7 The parties to this Agreement agree that (a) if either the
Executive or any Controlled Entity breaches any provision of this Section 7, the
damage to the Company will be substantial, although difficult to ascertain, and
money damages will not afford the Company an adequate remedy, and (b) if either
the Executive or any Controlled Entity is in breach of this Agreement, or
threatens a breach of this Agreement, the Company shall be entitled, in addition
to all other rights and remedies as may be available to the Company at law or in
equity, to (i) specific performance, (ii) injunctive and other equitable relief
to prevent or restrain a breach of this Agreement and (iii) require the
breaching party
to account for and pay over to the Company all compensation, profits, monies,
accruals or other benefits derived or received by such party as the result of
any transactions constituting a breach hereof.
7.8 If any court determines that any provision of this Section 7
is unenforceable because of the duration or geographic scope of such provision,
such court shall have the power to reduce the scope or duration of such
provision, as the case may be, and, in its reduced form, such provision shall
then be enforceable.
8. HEADINGS. The section headings of this Agreement are for
convenience of reference only and are not to be considered in the interpretation
of the terms and conditions of this Agreement.
9. NOTICES. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given (a) when delivered personally, (b) if sent by
telecopy, when receipt thereof is acknowledged at the telecopy number below, (c)
the day following the day on which the same has been delivered prepaid for
overnight delivery to a national air courier service or (d) three business days
following deposit in the United States Mail, registered or certified, postage
prepaid, in each case, addressed as follows:
If to the Company: GMH Acquisition Corp.
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx X. Xxxxx
Telecopy: 000-000-0000
with copies to: Strategic Investments &
Holdings, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxx
Telecopy: 000-000-0000
Nixon, Hargrave, Devans & Xxxxx LLP
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: 716-853-8109
If to the
Executive: Drew Xxxx Xxxxx
0000-X Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxx 00000
with a copy to: Holland & Knight
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: X. Xxxxxx Xxxxxx, III, Esq.
Telecopy: 000-000-0000
Any party may change the persons and address to which notices or other
communications are to be sent by given written notice of such change to the
other party in the manner provided herein for giving notice.
10. WAIVER OF BREACH. No waiver by either party of any condition or
of the breach by the other of any term or covenant contained in this Agreement,
whether by conduct or otherwise, in any one or more instances shall be deemed or
construed as a further or continuing waiver of any such condition or breach or a
waiver of any other condition, or of the breach of any other term or covenant
set forth in this Agreement. The failure of either party to exercise any right
hereunder shall not bar the later exercise thereof.
11. BINDING NATURE; ASSIGNMENT. This Agreement shall inure to the
benefit of and be binding on the parties and their respective successors in
interest, and shall not be assignable by either party without the written
consent of the other; provided that nothing in this Section shall preclude the
Executive from designating a beneficiary to receive any benefit payable
hereunder upon his death, or the executors, administrators or other legal
representatives of the Executive or his estate from assigning any rights
hereunder to which they become entitled to the person
or persons entitled thereto. It is specifically understood and acknowledged that
this Agreement will be assumed by General Manufactured Housing, Inc., a Georgia
corporation ("GMH") by virtue of a merger of the Company with and into GMH which
is occurring contemporaneously with the execution hereof.
12. GOVERNING LAW. This Agreement is entered into and shall be
construed in accordance with the laws of the State of Georgia, without giving
effect to conflict of laws principles thereof requiring application of the
substantive laws of another jurisdiction.
13. INVALIDITY OR UNENFORCEABILITY. If any term or provision of this
Agreement is held to be invalid or unenforceable for any reason, such invalidity
or unenforceability shall not affect any other term or provision hereof and this
Agreement shall continue in full force and effect as if such invalid or
unenforceable term or provision (to the extent of the invalidity or
unenforceability) had not been contained herein.
14. ENTIRE AGREEMENT. This Agreement constitutes the full and
complete understanding and agreement of the Executive and the Company respecting
the subject matter hereof, and supersedes all prior understandings and
agreements concerning the subject matter hereof, oral or written, express or
implied. This Agreement may not be modified or amended orally, but only by an
agreement in writing, signed by the party against whom enforcement of any
modification or amendment is sought.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed one and the same instrument.
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first written.
EXECUTIVE
/s/ Drew Xxxx Xxxxx
-----------------------------------
Drew Xxxx Xxxxx
COMPANY
GMH ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx
Title: President
EXHIBIT 1
GENERAL MANUFACTURED HOUSING, INC.
EXECUTIVE BONUS PLAN
1. PURPOSES OF THE PLAN
The purposes of this Executive Bonus Plan (the "Plan") are to enable
General Manufactured Housing, Inc. (the "Company") to retain the services of key
employees and to provide them with increased motivation and incentive to achieve
and exceed the goals of the business consistent with both short term and long
term objectives.
2. DEFINITIONS
The following terms shall have the meanings set forth below:
(a) "Base Amount" means $8.5 million.
(b) "Board of Directors" means the Board of Directors of the Company.
(c) "Bonus Pool" means, for each fiscal year of the Company, so long as
EBIT equals or exceeds the Base Amount for such fiscal year, 7% of EBIT.
(d) "EBIT" means, for each fiscal year of the Company, the net income of
the Company for such year, before (i) interest expense, (ii) taxes, (iii)
amortization, (iv) amounts paid under the Company's Incentive
Compensation Plan, (v) reimbursement of the Company's expenses under Section 19
of the Stock Purchase Agreement, (vi) the Management Fee, (vii) costs incurred
by the Company in remediating the Company's properties pursuant to Section 14(b)
of the Stock Purchase Agreement and (viii) all compensation and benefits payable
to management personnel added after the Effective Date other than at the
direction of the Chief Executive Officer of the Company and other than in the
ordinary course of the Company's business, all as shown on the audited financial
statements of the Company; provided, that EBIT shall be determined in accordance
with generally accepted accounting principles consistent with those employed by
the Company in 1994 and reflected in its audited financial statements for such
year.
(e) "Effective Date" means January 1, 1996.
(f) "Management Agreement" means the Management Agreement dated as of
December 21, 1995 by and between Strategic Investments & Holdings, Inc. and the
Company.
(g) "Management Fee" means an amount equal to the management fee paid
pursuant to the terms of the Management Agreement.
(h) "Participant" means each of the following management personnel of the
Company: Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxx Xxxxxx and Xxxxx
Xxxxxxx.
(i) "Participant Percentage" means, for any Plan Year, the percentage of
the Bonus Pool allocated to a Participant, which shall be 20% for each
Participant.
(j) "Plan Year" means the fiscal year of the Company.
(k) "Stock Purchase Agreement" means that certain Stock Purchase Agreement
dated as of October 10, 1995, among Xxxxxx X. Xxxxx et al. and GMH Acquisition
Corp., as amended.
3. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Board of Directors or a
Compensation Committee thereof. In the event the employment of any Participant
terminates, the Board of Directors or Compensation Committee shall have the
right to designate a substitute Participant or Participants (having an aggregate
Participant Percentage not in excess of that of the terminating Participant) or
otherwise determine the disposition of the Participant Percentage of any such
terminating Participant. Any decision by the Board of Directors or Compensation
Committee regarding the administration, interpretation or construction of any
provisions of the Plan shall be final, binding and conclusive.
(b) No member of the Board of Directors or Compensation Committee shall be
liable for any action taken or omitted to be taken or for any determination made
by him or her in good faith with respect to the Plan, and the Company shall
indemnify and hold harmless each member of the Board of Directors or
Compensation Committee against any cost or expense (including counsel fees) or
liability (including any sum paid in settlement of a claim with the approval of
the Board of Directors) arising out of any act or omission in connection with
the administration or interpretation of the Plan, unless arising out of such
person's own fraud or bad faith.
(c) The Plan shall become effective upon the Effective Date.
4. INCENTIVE AWARDS
(a) If EBIT for any Plan Year does not at least equal the Base Amount for
such year, the Company shall not allocate any amounts to the Bonus Pool.
Notwithstanding the foregoing or anything to the contrary contained herein, the
Board of Directors may elect to make discretionary bonus payments, not paid from
any Bonus Pool, in order to reward and retain such key employees as it shall
deem appropriate.
(b) If EBIT for any Plan Year equals or exceeds the Base Amount for such
year, the Company shall allocate 7% of EBIT to the Bonus Pool to be allocated
among the Participants.
(c) The Bonus Pool, if any, for any Plan Year shall be calculated and paid
to the Participants, in cash, within thirty (30) days after the Company's
receipt of its audited financial statements for such year but not later than one
hundred fifty (150) days following the end of such year; provided, however, that
except as provided in paragraph (d) hereof, no portion of the Bonus Pool shall
be paid to any Participant for any Plan Year if such Participant is not an
employee of the Company at the end of such year.
(d) In the event that a Participant is not an employee of the Company at
the end of a Plan Year because of his death, termination for disability or
retirement during such year, the portion of the Bonus Pool, if any, payable to
such Participant for such Plan Year shall be prorated to the date of death, date
of termination for disability or date of retirement, and the portion of the
Bonus Pool attributable to the part of the Plan Year prior to such date of
death, termination or retirement shall be determined and paid to such
Participant or his legal representative in accordance with paragraph (c) above.
In the event that a Participant is not an employee of the Company at the end of
a Plan Year because such Participant has either voluntarily terminated his
employment or because of the termination of such Participant for any reason
other than death, disability or retirement during such year, no portion of the
Bonus Pool for such year shall be payable to such Participant.
(e) Any and all amounts payable under the Bonus Pool hereunder shall be
subject to (i) applicable federal, state and local tax withholding requirements
and (ii) the Company's obligations to comply with the covenants set forth in the
Company's agreements with its lenders, and payment of any and all amounts
payable under the Bonus Pool may be deferred in order to maintain the Company's
compliance with such covenants. Such deferred amounts will be accrued until such
time as they are permitted to be paid under the Company's agreements with its
lenders and shall then be promptly paid with interest as set forth in the
immediately following sentence. Any such deferred amounts will accrue interest
at the Prime Rate, as such rate is quoted from time to time in the Wall Street
Journal.
5. MISCELLANEOUS
(a) No right to receive any incentive compensation under the Plan shall be
transferable except by will or the laws of descent and distribution. Any
purported transfer contrary to this provision will be null and void and without
effect.
(b) Neither the adoption of the Plan nor its operation, nor any document
describing or referring to the Plan, or any part hereof, nor the designation of
any employee as a Participant in the Plan shall confer upon
any Participant any right to continue in the employ of the Company or shall in
any way affect the right and power of the Company to terminate the employment of
any Participant at any time with or without assigning a reason therefor, to the
same extent as might have been done if the Plan had not been adopted.
(c) By acceptance of any incentive compensation under the Plan, the
recipient shall be deemed to agree (a) to execute any and all documents
requested by the Company in connection with his or her participation in the
Plan, including an agreement to report any amounts received under the Plan as
compensation and (b) that any compensation paid hereunder will not be taken into
account as "base remuneration", "wages", "salary" or "compensation" in
determining the amount of any contribution to or payment or any other benefit
under any pension, retirement, incentive, profit-sharing or deferred
compensation plan of the Company.
(d) The place of administration of the Plan shall be in the State of
Georgia, and the validity, construction, interpretation, administration and
effect of the Plan and of its rules and regulations, and rights relating to the
Plan, shall be determined solely in accordance with the laws of the State of
Georgia.
