EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Agreement is effective May 24, 2004 (the "Effective Date"), by and
between Starcraft Corporation, an Indiana corporation ("Employer"), and Xxxxxx
X. Xxxxxx, III ("Employee").
W I T N E S S E T H
WHEREAS, Employee desires to serve Employer and each of its affiliates and
subsidiaries as Chief Financial Officer ("Job Responsibilities");
WHEREAS, Employer desires to provide fair and reasonable benefits to
Employee on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, Employer desires reasonable protection of its confidential
business and customer information and assurance that Employee will not compete
with Employer for a reasonable period of time after termination of his
employment with Employer, except as otherwise provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
herein contained and the continued employment of Employee to perform Job
Responsibilities for Employer, Employer and Employee, each intending to be
legally bound, covenant and agree as follows:
1. Upon the terms and subject to the conditions described in this
Agreement, Employer employs Employee to perform Job Responsibilities for
Employer, its subsidiaries, and affiliates (an "affiliate" means an entity
controlled by Employer or 50% or more owned by Employer) and Employee accepts
such employment. Employee will devote best efforts to the service of Employer,
to perform his Job Responsibilities, and Employee will not engage in other
employment that conflicts with, or impairs in any way, his ability to perform
his obligations as an employee of Employer.
2. Employee agrees to serve as Chief Financial Officer, in connection with
the Job Responsibilities and to perform such duties as may reasonably be
required of him by Employer's President, or any Chief Executive Officer, or
Board of Directors, from time to time. Employee shall devote substantially all
his business time and efforts to Employer's business.
3. The term of this Agreement shall begin on the "Effective Date" and shall
end on the date which is one (1) year following such date, provided, however,
each one (1) year term shall automatically renew and extend for consecutive one
(1) year terms (the expiration of the original one (1) year term, and any
extension term, being an "Anniversary Date") (the original one (1) year term,
including any extension thereof, shall be referred to as the "Term"), unless
either Employer or Employee gives a Notice of Termination as provided in Section
10 hereof, at the time described in paragraph Section 7(B) or Section 7(D)
respectively.
4. Employee shall receive an annual salary of not less than One Hundred
Twenty Thousand Dollars ($120,000.00) ("Base Compensation") for the Term,
payable at regular intervals in accordance with Employer's normal payroll
practices now or hereafter in effect. Employer may consider and declare from
time to time increases in the salary it pays Employee and thereby increases in
his Base Compensation. Base Compensation shall not take into account any
bonuses, reimbursed expenses, credits or benefits (including benefits under any
plan of deferred compensation), or any additional cash compensation or
compensation payable in a form other than cash.
5. So long as Employee is employed pursuant to this Agreement, and
effective the first day of the month following the Effective Date, Employee
shall be included as a participant in all present and
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future employee benefit plans generally available to employees of Employer,
consistent with his Base Compensation, and his Job Responsibilities, subject to
applicable plan eligibility requirements, such as, group life and health
insurance program, 401(k) Plan, Stock Incentive Plan, Executive Bonus Plan, and
paid vacation (collectively, "Benefit Plans").
6. So long as Employee is employed by Employer pursuant to this Agreement,
Employee shall receive reimbursement from Employer for all reasonable business
expenses approved by Employer, upon submission to Employer of written vouchers
and statements for reimbursement.
7. Subject to the respective continuing obligations of the parties,
including but not limited to those set forth in paragraph 9 hereof, Employee's
employment by Employer may be terminated prior to the expiration of the Term of
this Agreement as follows:
(A) Employer, upon written notice to Employee, may terminate Employee's
employment with Employer at any time "for cause." For purposes of this
subsection 7(A), "cause" shall be defined as (i) misconduct, (ii) breach of
fiduciary duty involving personal profit, (iii) failure to perform Job
Responsibilities, (iv) conviction or guilty plea or nolo contendere plea to a
violation of any law, rule, or regulation (other than minor traffic violations),
or (v) any breach of any term, condition or covenant of this Agreement. Prior to
a termination of Employee's employment upon the occurrence of any event set
forth in this section 7(A) above, except section 7(A)(ii) and (iv), Employer
shall first provide Employee with written notice of his intended termination,
setting forth with specificity the reasons for such intended termination, and
shall give Employee opportunity to remedy any deficiencies.
(B) Employer may fail to renew this Agreement effective any Anniversary
Date, or may terminate Employee's employment with Employer at any time, "without
cause," upon thirty (30) days prior written notice to Employee.
(C) Employee, by written notice to Employer, may terminate his employment
with Employer at any time prior to the Anniversary Date "for cause." For
purposes of this subsection 7(C), "cause" shall be defined as breach by Employer
of a material term, condition or covenant of this Agreement, or a "Change of
Control." For purposes of this Agreement, a "Change of Control" of Employer
shall be deemed to have occurred if during, or following the consummation of, a
stock purchase program, tender offer, exchange offer, merger, consolidation,
sale of substantially all of Employer's assets, contested election, or any
combination of the foregoing transactions, any person, entity or group of
persons acting in concert (other than the Employee, or Xxxxx X. Xxxx, Xxxxxxx X.
Xxxxxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxxxxx X. Xxxx, or Xxxxxxx X. Xxxxxxxx, their
respective spouses, or their trusts directly or indirectly) (collectively
"Excluded Persons") (i) acquires the power to vote in excess of twenty-five
percent (25%) of the voting securities of Employer and one or more of its
representatives are elected to the Employer's Board of Directors; or (ii)
acquires ownership of the power to vote in excess of 50% of the voting
securities of Employer; or (iii) otherwise acquires effective control of the
business and affairs of Employer; provided, however, that a Change of Control
shall not be deemed to occur as a result of any existing or future acquisition
of shares of Employer capital stock by the Excluded Persons.
(D) Employee, at any time and upon thirty (30) days written notice to
Employer, may terminate his employment with Employer "without cause."
(E) Employee's employment with Employer shall terminate in the event of
Employee's death or permanent disability. "Disability" means (i) if Employee is
covered by an individual or group long-term disability policy under Employer's
Benefit Plans, then as defined in such policy without regard to any waiting
period, or (ii) if (i) is inapplicable, then "disability" shall be defined as
Employee's permanent inability by reason of illness or other physical or mental
incapacity to perform Job
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Responsibilities for any consecutive one hundred eighty (180) day period,
provided that Notice of Termination by Employer because of Employee's
"disability" shall have been give to Employee prior to the full resumption by
him of the performance of such duties.
8. In the event of termination of Employee's employment with Employer
pursuant to section 7 hereof, Base Compensation shall continue to be paid by
Employer to Employee as follows:
(A) In the event of termination "for cause" by Employer or "without cause"
by Employee pursuant to subsection 7(A) or 7(D), respectively, Base Compensation
shall continue to be paid, and Employee shall continue to participate in the
Benefit Plans and other perquisites as provided in paragraphs 4 and 5 hereof,
through the date of termination specified in the notice of termination. Any
benefits payable under such Benefit Plans as a result of Employee's
participation in such plans through such date shall be paid when due under those
plans. The date of termination specified in any notice of termination pursuant
to subsection 7(A) or 7(D) shall be no later than the last business day of the
next month following the month in which such notice is provided to Employee or
Employer, as the case may be.
(B) In the event of termination "without cause" by Employer or "with cause"
by Employee prior to the Anniversary Date and pursuant to subsection 7(B) or
7(C), respectively, Base Compensation shall continue to be paid, and Employee
shall continue to participate in the Benefit Plans and other perquisites as
provided in paragraphs 4 and 5 hereof, through the date of termination specified
in the notice of termination. Any benefits payable under such Benefit Plans as a
result of Employee's participation in such plans through such date shall be paid
when due under those plans. In addition, Employee shall be entitled to continue
to receive from Employer his Base Compensation at the rates in effect at the
time of termination and benefits under any health and life insurance plans for
not less than an additional six (6) month period, provided, however that
Employer will not maintain any other Benefit Plan for the continued benefit of
Employee and his dependents during such period. The date of termination
specified in any notice of termination pursuant to subsection 7(B) or 7(C) shall
be no later than the last business day of the next month following the month in
which such notice is provided to Employee or Employer, as the case may be.
(C) In the event Employee's employment with Employer shall terminate in the
event of Employee's disability or death, pursuant to subsection 7(E), Base
Compensation shall continue to be paid through the date of disability or the
date of death, and Employee shall continue to participate in the Benefit Plans
through such date.
(D) Employer will permit Employee or his personal representative(s) or
heirs, during a period of three months following termination of Employee's
employment by Employer for any reason, including Reasonable Cause, to require
Employer, upon written request and at Employee's or his personal
representative's or his heirs' option, to purchase all or less than all of
outstanding warrants or stock options previously granted to Employee under any
Employer warrant or stock option plan then in effect, whether or not such
warrants or options are then exercisable or have terminated, at a cash purchase
price equal to the amount by which the aggregate "fair market value" of the
shares subject to such options or warrants exceeds the aggregate warrant or
option or warrant price for such shares. For purposes of this Agreement, the
term "fair market value" shall mean the higher of (i) the average of the highest
asked prices for Employer shares in the over-the-counter market as reported on
the NASDAQ system or other national exchange if the shares are traded on such
system for the thirty (30) business days preceding such termination, or (ii) the
average per share price actually paid for the most highly priced one percent
(1%) of the Employer shares acquired in connection with any Change of Control of
the Employer by any person or group acquiring such control.
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9. In order to induce Employer to enter into this Agreement, Employee
agrees as follows:
(A) Unless otherwise required to do so by law, including the order of a
court or government agency, Employee shall not divulge or furnish trade secrets
(as defined in IND. CODE Sec. 24-2-3-2) of Employer or any confidential
information acquired by him while employed by Employer concerning the policies,
plans, procedures or customers of Employer to any person, firm or corporation,
other than Employer or upon its written request, or use any such trade secret or
confidential information directly or indirectly for Employee's own benefit or
for the benefit of any person, firm or corporation other than Employer, since
such trade secrets and confidential information are confidential and shall at
all times remain property of Employer. To that end, Employee agrees as follows:
(i) That all drawings, blueprints, manuals, letters, reports
memoranda, notes, notebooks, customer lists and all other documents or
materials whether or not of a secret or confidential nature (and all copies
thereof) relating to Employer or any of its affiliates business in any way
obtained by Employee while employed by Employer shall be Employer's
property and shall be delivered by Employee to Employer on termination of
Employee's employment or at any time at Employer's request together with
Employee's written certification of compliance. This includes but is not
limited to documents or other materials concerning customers, pricing,
marketing, and method or process, product or apparatus manufactured, used,
developed, or investigated by Employer or any of its affiliates, all of
which are CONFIDENTIAL;
(ii) To disclose to Employer promptly and fully any invention,
discovery or improvement ("invention(s)"), whether patentable or not,
hereafter made or conceived solely or jointly by Employee while employed by
Employer and which relates in any manner to the business or activities of
Employer or any of its affiliates or is suggested by or results from any
duties assigned to Employee or work performed by Employee for or on behalf
of Employer;
(B) That when requested by Employer, whether during or subsequent to
Employee's employment, to execute patent applications and other instruments
considered necessary by Employer to apply for and obtain Letters Patent of the
United States and foreign countries with respect to inventions covered by this
Agreement and to make assignments and execute other instruments necessary to
convey to Employer ownership and exclusive rights in such inventions, patent
applications and patents; provided, however, that Employer shall bear all
expenses connected with such patents, patent applications and maintenance of
patent protection, and if services in connection therewith are performed by
Employee at the request of Employer after termination of Employee's employment,
Employer shall pay reasonable compensation for such post-employment services;
(C) That during the Term of his employment with Employer, and during any
period for which Employee is receiving Benefit Plan benefits or any other
payments from Employer, and for a period of one (1) year thereafter, Employee
shall not: (a) compete, directly or indirectly, with the Business of Employer
(which for purposes of this paragraph 9 is defined as, engineering, consulting,
product development of upfit customization of specialized packages, and second
stage vehicle manufacturing to General Motors, and also including such business
as being conducted by any of its subsidiaries or affiliates), as conducted
during the Term of this Agreement, or have any interest (including any interest
or association, including but not limited to, that of owner, part owner,
partner, shareholder, director, officer, employee, agent, consultant, lender or
advisor) in any person, firm or entity which competes with the Business in the
geographic area described on the attached Exhibit A (each such person, firm or
entity is referred to as "Competitor") other than the investment by Employee in
a publicly traded company in such form or manner as will not require any
services on Employee's part in the operation of the affairs of the businesses in
which such investments are made; (b) solicit or accept business for or on behalf
of any Competitor; (c) solicit, induce or persuade, or attempt to solicit,
induce or persuade, any person to work
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for or provide services to or provide financial assistance to, any Competitor;
(d) solicit or accept for or on behalf of or for the benefit of any Competitor,
any business from any person, firm or entity which during the term of this
Agreement was a vendor or supplier to, or subcontractor for, or commercial
purchaser from, Employer; or (e) engage in any business, either as an owner or
representative or employee or otherwise, that is competitive with any business
engaged in by Employer or any of its affiliates other than the investment by
Employee in a publicly traded company in such form or manner as will not require
any services on Employee's part in the operation of the affairs of the
businesses in which such investments are made. Employee recognizes that Employer
and its affiliates market products worldwide and, therefore, performance of the
same or substantially similar duties in any geographic region would be
detrimental to Employer's legitimate interests; Employer has a legitimate
interest which these provisions are reasonably necessary to protect; the
restrictions on competition contained herein are reasonable in time and
geographic scope; and Employee is, and shall not be, unreasonably restricted in
gainful employment by these provisions.
(D) If Employee's employment by Employer is terminated for any reason by
either Employee or Employer, Employee will turn over immediately thereafter to
Employer all business correspondence, letters, papers, reports, customers'
lists, financial statements, records, drawings, credit reports or other
confidential information or documents of Employer or its affiliates in the
possession or control of Employee, all of which writings are and will continue
to be the sole and exclusive property of Employer or its affiliates.
(E) If Employee's employment by Employer is terminated during the Term of
this Agreement for any of the reasons set forth in section 7 of this Agreement,
and if Employee and Employer in writing agree prior to the end of the Term that
Employee disclaims any rights to any continuing payments from Employer (whether
by way of Base Compensation, Benefit Plans, or otherwise) after the termination
date, then Employee shall have no obligations to Employer with respect to
noncompetition under subsection 9(C) hereof.
(F) Anything in this Employment Agreement to the contrary notwithstanding,
prior to Employer seeking relief for a breach by Employee of this paragraph 9,
Employer shall first provide Employee with written notice setting forth the
nature of such breach with specificity, and shall give Employee opportunity to
remedy any deficiencies or to provide evidence that no breach has occurred.
10. Any termination of Employee's employment with Employer as contemplated
by paragraph 3 and paragraph 7 hereof, except in the circumstances of Employee's
death, shall be communicated by written "Notice of Termination" by the
terminating party to the other party hereto. Any "Notice of Termination" must
refer to one or more of subsections 7(A), 7(B), 7(C), or 7(D) and shall indicate
the specific provisions of this Agreement and one or more of such subsections of
paragraph 7 relied upon, and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for such termination under one or more
of such subsections of paragraph 7.
11. Anything in this Agreement to the contrary notwithstanding, payment of
Base Compensation by the Employer or to or for the benefit of the Employee,
including such as may be made pursuant to paragraph 8 hereof, shall be inclusive
of payments attributable to the confidentiality and noncompetition covenants of
paragraph 9 hereof and shall be payable whether or not deductible by the
Employer for federal income tax purposes.
12. The validity, interpretation, and performance of this Agreement shall
be governed by the laws of the State of Indiana. The invalidity or
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provisions of this Agreement which shall
remain in full force and effect. If a dispute arises regarding provisions of
this Agreement, including enforcement of
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the confidentiality and noncompetition provisions hereof, then such shall be
heard only by the judge and not by a jury, in any court of general jurisdiction
in Elkhart County, Indiana, to which sole and exclusive jurisdiction each party
irrevocably consents. The prevailing party shall be entitled to its costs,
expenses and reasonable attorney's fees. No attempt will be made to consolidate,
by counterclaim or otherwise, any such action or proceeding with any other
action or proceeding in which there is a trial by jury or in which a jury trial
cannot be or has not been waived.
13. For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been given
when personally delivered, or mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to Employee: Xxxxxx X. Xxxxxx, III
00000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
If to Employer: Starcraft Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Post Office Box 1903
Goshen, IN 46527-1903
Attention: Xxxxxxx X. Xxxxxxxxxx, Chief Executive Officer
14. No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
Employee and Employer. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with ,any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of dissimilar provisions or conditions at the same or any prior or
subsequent time. No agreements or representation, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.
15. No benefit payable at any time under this Agreement shall be subject in
any manner to alienation, sale, transfer, assignment, pledge, attachment, levy,
garnishment, or encumbrance of any kind.
16. Employer shall withhold any applicable income or employment taxes that
are required to be withheld from the benefits provided under this Agreement.
17. Employer does not guarantee payment of benefits payable under any
insurance coverage described or referred to herein, and any benefits thereunder
shall be the exclusive responsibility of the insurer that is required to provide
such benefits under such policy.
18. Commencing upon the termination date in the Notice of Termination, the
Employee shall cease to be an employee of the Employer for any purpose, and any
payments to Employee thereafter under this Agreement shall be payments to a
former employee. The right of Employee to receive any Base Compensation, Bonus,
or Benefit Plan payments from Employer ceases upon termination of employment,
except to the limited extent otherwise and expressly described in paragraph 8 of
this Agreement.
19. This Agreement is binding upon and inures to the benefit of each
party's personal representatives, heirs, successors and assigns.
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IN WITNESS WHEREOF, the parties have caused the Agreement to be executed
and delivered this 24th day of May, 2004.
"Employee" "Employer"
STARCRAFT CORPORATION
/s/ Xxxxx X. Xxxxxx, III By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------- --------------------------------
Xxxxxx X. Xxxxxx, III Xxxxxxx X. Xxxxxxxxxx
Its: Chief Executive Officer
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EXHIBIT A
In Japan, Europe, Canada, Mexico, and any of the 48 contiguous States of
the United States of America; it being acknowledged by Employee that the Company
presently conducts a substantial amount of its business in each of the following
States: Indiana, Michigan, Texas, New Jersey, and Louisiana, and, the Province
of Ontario, Canada.
