1
Exhibit 10.3a
EMPLOYMENT AGREEMENT
This Agreement, executed of this 1st day of October 1998, by and
between American Architectural Products Corporation, a Delaware corporation,
located at ▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇. ▇-▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
("Company" or "AAPC"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, residing at ▇▇▇▇ ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ("Employee").
RECITALS
A. The Company desires to retain Employee as its Vice President and CFO
in accordance with the provisions of this Agreement.
B. Employee desires to act as Company's Vice President and CFO, in
accordance with the provisions of this Agreement.
PROVISIONS
In consideration of the mutual covenants and agreements contained
herein, the parties agree as follows:
1. APPOINTMENT. Company hereby employs Employee to serve as its Vice
President and CFO and to perform such other services and duties as may be
determined from time to time by the Chief Executive Officer of the Company in
cooperation with the Board of Directors of the Company.
2. PERFORMANCE. Employee agrees to devote his full time and effort to
the performance of his duties as an employee of the Company and agrees to do so
in accordance with
1
2
the general policies and general standards of performance in respect to the
services performed by him as are determined by the Chief Executive Officer of
the Company from time to time while this Agreement is in force. This Agreement
shall not be construed as preventing the Employee from engaging in transactions
unrelated to his duties as an employee or from making investment of his assets
as long as they do not conflict with his employment as provided herein.
3. TERM. Except in the case of earlier termination as herein
specifically provided, the term of this Agreement shall begin as of the 1st day
of October,1998, and continue for a period of three (3) years, after which it
will continue on an annual basis until one party notifies the other of its
termination of this Agreement, in writing, at least sixty (60) days prior to
such termination.
4. COMPENSATION.
(a) BASE COMPENSATION. For all the services to be rendered by Employee
in any capacity hereunder, Company will pay to Employee the sum of
$160,000 per year, adjusted annually to an amount reasonably agreed to
by Employee and the Company, payable in accordance with the Company's
normal payroll practices.
(b) ANNUAL BONUS. In addition to the base compensation provided for in
subparagraph ( a), hereof, Company will pay to Employee an annual bonus
equal an amount determined by the Company Board of Directors in the
Board's sole discretion. The annual bonus shall be determined by the
Company within 75 days following the end of each tax year and shall be
paid to Employee no later than the 75th day following the end of each
tax year.
(c) STOCK OPTIONS. Incentive stock options will be provided to Employee
in accordance with AAPC's Incentive Stock Option Plan. In addition to
the stock options previously granted Employee, Company shall issue
Employee 10,000 additional stock options pursuant to the Stock Option
Plan with an effective grant date of 7/23/98, which options shall vest
2
3
pro-rata over five (5) years.
5. VACATION. Employee shall be entitled to three (3) weeks paid
vacation per year and the weeks of vacation shall not accumulate from
year to year.
6. INSURANCE.
(a) HEALTH INSURANCE. Employee will be provided with the same medical
and dental coverage provided to all regular employees of the Company.
Company will pay the cost of that medical and dental coverage for
Employee and his immediate family (i.e. spouse and dependent children).
(b) DISABILITY INSURANCE. Company will also provide and pay the
premiums for a long-term disability policy.
(c) KEY EMPLOYEE LIFE INSURANCE. Company shall provide and pay the
premiums on a key employee life insurance policy on the life of
Employee to include a $750,000 benefit payable to the Company and a
$750,000 benefit payable to Employee's beneficiaries upon his death.
The key employee life insurance policy will be effective upon securing
such policy from a qualified insurance company and Employee's
compliance with policy requirements.
7. AUTOMOBILE. During the course of employment, Company will provide a
car allowance in the amount of $500.00 per month to Employee.
8. DISCLOSURE OF INFORMATION. It is understood that during the term of
this Agreement, and for a period of three (3) years after the termination of
this Agreement, Employee will not disclose any confidential or proprietary
information concerning the Company (including, but not limited to, customer
lists, prices, contracts, processes, devices, plans, models, supply sources,
opportunities for new business, financial and business methods and activities,
financial
3
4
records, trade secrets, business techniques or processes) to any
person, corporation, partnership, sole proprietorship, governmental agency,
organization, joint venture or other entity. Should Employee violate this
provision of this Agreement, Company shall be entitled to an action for
injunctive relief as well as monetary damages, and any payments of compensation
remaining to be paid to Employee shall terminate and no longer be required to be
paid to Employee.
9. NON-COMPETITION AND NON-SOLICITATION.
(a) NON-COMPETITION. As an inducement to the Company to engage
Employee, Employee covenants with the Company that during the period
commencing with the date of this Agreement and for a period two (2)
years following the date of termination of this Agreement by Employee
pursuant to Paragraph 10(a) or by Company pursuant to Paragraph 10(b)
(the "Non-Compete Period"), Employee shall not, individually, or for,
on behalf of, or in conjunction with, any other individual, company or
other entity or person, directly or indirectly own (in whole or in
part), manage, operate, control, be an agent for, participate in, or be
connected in any manner with the ownership, management, operation or
control of any corporation, partnership, proprietorship or other
business entity engaged in a business which is the same as, similar to,
or competes with, the Company in the fenestration business anywhere in
the Continental United States at any time during such Non-Compete
Period. Notwithstanding the foregoing, nothing herein will prohibit
Employee from performing accounting services within the Non-Compete
Period, including areas of accounting currently performed for the
Company, except that such accounting services within the Non-Compete
Period shall not be more than incidental within the fenestration
industry.
(b) NON-SOLICITATION; NON-INTERFERENCE. During the period commencing on
the date of
4
5
this Agreement and ending two (2) years after the termination of this
Agreement by Employee pursuant to Paragraph 10(a) or Company pursuant
to Paragraph 10(b), Employee shall not, directly or indirectly;
i. solicit customers, business, patronage, or orders for
himself or for any person, firm, association, corporation, or
other entity engaged in a business that competes with the
Company's business, or supervise sales agents or
representatives in such sales activities;
ii. employ or otherwise associate in business with any officer
or employee of the Company or its affiliates; or
iii. induce any officer, employee, or consultant of or to the
Company or its affiliates to terminate such relationship.
(c) TRADE SECRETS AND CONFIDENTIAL INFORMATION. Employee acknowledges
that he has had, and during the Term shall continue to have, access to
and shall acquire confidential information relating to the business and
operations of the Company including, but not limited to, customer lists
and records, policy manuals, price lists, business contracts,
inventions, proprietary technology and other confidential information
relating to any of the Company's products, processes, plans, methods of
doing business and special needs of customers of the Company
(collectively referred to in this Agreement as the "Confidential
Information"). Employee acknowledges that all of the Confidential
Information is solely the property of the Company and constitutes trade
secrets and confidential information of the Company and, upon
termination of this Agreement, his knowledge of the Confidential
Information shall enable him to compete with the Company in a manner
likely to cause the Company irrevocable harm upon the disclosure of
such matters. Employee hereby
5
6
irrevocably represents, warrants and covenants that during the period
commencing on the date of this Agreement and ending three (3) years
after the termination of this Agreement by Employee pursuant to
Paragraph 10(a) or by the Company pursuant to Paragraph 10(b) he shall
(i) not disclose, directly or indirectly, any of the Confidential
Information to any individual, firm, corporation or other entity, (ii)
return all of the Confidential Information in his possession to the
Company within five (5) calendar days after the date his engagement is
terminated (without retaining copies), and (iii) certify to the Company
that he has so complied.
10. TERMINATION.
(a) BY EMPLOYEE. Employee may terminate his/her employment relationship
for any reason whatsoever and at any time upon giving the Company sixty
(60) days written notice of his intent to do so.
(b) BY THE COMPANY FOR CAUSE. The Company may terminate Employee, for
good cause, at any time during the term hereof upon giving Employee ten
(10) days written notice of its intent to terminate his service. In the
event of such termination, Employee shall not be entitled to any
benefits, rights, bonuses or privileges under this Agreement past the
day of termination. Good cause shall be defined as the material breach
of this Agreement, or the negligent or willful mis-performance or
non-performance by Employee of his obligations and/or duties under this
Agreement or the fraudulent or criminal acts on the part of Employee
which are adverse to the interest of the Company.
(c) BY COMPANY WITHOUT CAUSE. If the Company terminates Employee at any
time during the term hereof without good cause as set forth in
subparagraph (b) hereof, Company shall release Employee from
restriction contained in Paragraph 9(a) herein and shall pay
6
7
Employee severance pay calculated by multiplying the number of months
remaining on the term of this Agreement by the amount of Employee's
then monthly base salary, along with any bonus declared for Employee by
the Board of Directors of the Company but not yet paid for the year in
which Employee was terminated without cause. In no event will
Employee's severance pay be less than $160,000.
11. SUCCESSORS. This Agreement shall not be terminated by the voluntary
dissolution of the Company or parent, subsidiary or successor of the Company, or
merger whereby the Company (or such parent, subsidiary or successor corporation)
is not the surviving or resulting corporation or any transfer of substantially
all of the assets of the Company. In the event of any such merger or
consolidation or transfer of assets, the provisions of this Agreement shall
inure to the benefit of the entity to which assets shall be transferred.
12. PERSONAL SERVICES. The services of the Employee are of a personal
nature to Company and may not be assigned or transferred by Employee to any
other person, firm, corporation, or other entity without the prior, express, and
written consent of Company which may be arbitrarily withheld.
13. NOTICES. All notices, demands and other communications to be given
or delivered pursuant to this Agreement shall be in writing and shall be deemed
to have been given after (a) personal delivery or (b) upon transmission by
telecopier, or facsimile or (c) three (3) days from deposit in the mails
registered or certified mail, return receipt requested, and postage prepaid to
the party to whom notice is to be given, in any case at the following address:
If to Employee: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇. ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
If to the Company: American Architectural Products Corp.
7
8
Attn: Chief Executive Officer
▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇. ▇-▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a Copy To: American Architectural Products Corp.
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇. - ▇▇▇▇. ▇-▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
14. GOVERNING LAW. It is agreed that this Agreement shall be governed
by, construed, and enforced in accordance with the laws of the State of Ohio.
15. ENTIRE AGREEMENT. This Agreement shall constitute the entire
Agreement between the parties and any prior understanding or representation of
any kind preceding the date of this Agreement shall not be binding upon either
party except to the extent incorporated in this Agreement.
16. MODIFICATION. Any modification of this Agreement or additional
obligation assumed by either party in connection with this Agreement shall be
binding only if evidenced in writing signed by each party or an authorized
representative of each party.
17. NO WAIVER. The failure of either party to this Agreement to insist
upon the performance of any of the terms and conditions of this Agreement, or
the waiver of any breach of any of the terms and conditions of this Agreement,
shall not be construed as thereafter waiving any such terms and conditions, but
the same shall continue and remain in full force and effect as if no such
forbearance or waiver had occurred.
18. PROFESSIONAL FEES. In the event that any action is filed in
relation to this Agreement, the unsuccessful party in the action shall pay to
the successful party, in addition to all the sums that either party may be
called on to pay, a reasonable sum for the successful party's professional fees.
8
9
19. EFFECT OF PARTIAL INVALIDITY. The invalidity of any portion of this
Agreement will not and shall not be deemed to affect the validity of any other
provision. In the event that any provision of this Agreement is held to be
invalid, the parties agree that the remaining provisions shall be deemed to be
in full force and effect as if they had been executed by both parties subsequent
to the expungement of the invalid provisions.
20. PARAGRAPH HEADINGS. The titles to the paragraphs of this Agreement
are solely for the convenience of the parties and shall not be used to explain,
modify, simplify, or aid in the interpretation of the provisions of this
Agreement.
21. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the heirs, personal representatives, successors, and permitted
assigns of the respective parties hereto.
22. CHANGE IN CONTROL. Notwithstanding anything to the contrary
contained herein, in the event (a) all or substantially all of the assets of the
Company are sold, (b) a sale or other disposition of common stock of the Company
occurs such that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ do not thereafter
collectively own or control at least 51% of the common stock of the Company, or
(c) the Company merges with or into another entity such that ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ do not thereafter collectively own or control at
least 51% of the common stock of the surviving entity (collectively, "Change in
Control"), then all the stock options granted to Employee as of the date of such
Change in Control shall immediately vest.
IN WITNESS WHEREOF, each party to this Agreement has caused it to be
executed on the date first indicated herein.
9
10
AMERICAN ARCHITECTURAL
PRODUCTS CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Chief Executive Officer
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ "Employee"
10
