1
EXHIBIT 10.12
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This Agreement is effective as of June 11, 2001, and is between Xxxx X.
Xxxxxx, (the "Employee"), and Oxford Automotive, Inc., a Michigan corporation
(the "Company").
In consideration of the premises herein contained, the parties agree as
follows:
1. Employment. The Company employs you, the Employee, as an executive
officer of the Company, your specific title to be determined between you and the
Chairman of the Board of Directors of the Company, and you accept such
employment, upon the terms and conditions set forth in this Agreement.
2. Duties During Employment Period. You shall perform and discharge
well and faithfully such duties for the Company and any of its subsidiaries as
may be assigned to you from time to time by the Board of Directors (the "Board")
or Chairman of the Board (the "Chairman") of the Company and, in the absence of
such assignment, such services customary to such office as are necessary to the
operations of the Company. Such duties shall include:
- Building the Company as a leader in the automotive metal forming
industry globally;
- Developing and meeting growth oriented business and financial
plans and objectives;
- Building existing North American and European businesses;
- Integrating new North American, South American, Asian and European
acquisitions into the Company's business;
- Effectively building a global management team;
- Managing and meeting financial expectations of the board of
directors, bank groups, and investors; and
- Representing the Company in industry group activities, press
relations and investor activities.
You shall report to the Chairman, or such other person as the Board may
from time to time designate, at such times and in such detail as the Chairman
shall require and you shall devote all of your business time, attention and
energies to the business of the Company and its subsidiaries. The Company
acknowledges your continuing service as a director of Vitec, Inc.
3. Term. Your employment under Sections 1 and 2 of this Agreement
shall commence on the date hereof and shall terminate as provided in Section 9
below (the "Employment Period"). Your employment with the Company shall be
terminable at will and you and the Company shall have the right to terminate
your employment with or without cause in accordance with Section 9 below.
2
4. Employment Period Compensation.
(a) Base Salary. For all services to be rendered by you hereunder
(including services as director, officer, employee, member of any committee of
the Company or any subsidiary or division or otherwise), the Company shall pay
to you during the Employment Period an annual salary of $500,000 ("Annual Base
Salary"), payable in bi-weekly installments in accordance with the payroll
practices of the Company, as such may exist from time to time. The Board may, at
its option, make such additional salary increases as they deem appropriate in
light of your performance and the Company's performance. All payments shall be
subject to all applicable taxes required to be withheld by the Company pursuant
to federal, state or local law.
(b) Other Benefits. The Company shall provide you with the fringe
benefits, perquisites, and other benefits of employment provided to executive
officers of the Company from time to time during the Employment Period, subject
to the generally applicable eligibility and other provisions of the various
plans and programs in effect from time to time. These benefits will be adjusted
from time to time as determined by the Board, as such benefits may be adjusted
for general application among all executive officers.
(c) Automobile Allowance. The Company shall provide you with the
use of a an automobile or an automobile allowance during the Employment Period,
in connection with the services to be rendered by you hereunder, which shall be
on terms comparable to that provided to the other executive officers of the
Company.
(d) Contingent Bonus. After each fiscal year that ends during the
Employment Period, the Board will consider granting to you a bonus, in such
amount (if any) up to 50% of your Annual Base Salary as the Board may determine
in its sole discretion. The Board expects to base its decisions with respect to
bonus payments, if any, on corporate financial and strategic objectives
(approximately 80%) and agreed to personal goals (approximately 20%).
(e) Vacation. You shall be entitled to four weeks paid vacation
during each calendar year of the Employment Period, to be taken at such times as
shall not, in the reasonable judgment of the Chairman, materially interfere with
the fulfillment of your duties under this Agreement. Unused vacation time may
not be carried over to the following year. You shall also be entitled to as many
holidays and personal days as are in accordance with the Company's policy then
in effect for its employees generally, upon such terms as may be provided for
general application to all employees of the Company.
(f) Moving Allowance. You shall be entitled to a one-time
reimbursement for any moving expenses, pre-approved by the Chairman or Vice
Chairman of the Company, for you and your immediate family, up to a maximum of
$50,000.
2
3
5. Confidential Information, Improvements, Etc.
(a) Disclosure of Information. You understand and agree that the
Confidential Information (as hereinafter defined) used in the business of the
Company or its affiliates is a valuable, special and unique asset of the Company
and shall be and remain the sole and exclusive property of the Company.
Accordingly, you agree that you will not, during or after your employment with
the Company, take from the Company's premises, or directly or indirectly
reproduce, use, disclose or reveal said Confidential Information to any person,
firm, corporation, association or other entity for any reason or purpose
whatsoever, except as required in connection with the performance of your duties
under this Agreement or as required by law or under court order or as authorized
in writing by the Company; and further agree that you will never use any such
Confidential Information for any purpose other than in fulfillment of your
employment duties with the Company. In the event of the termination of your
employment, you agree to immediately deliver to the Company all written
materials in your possession regarding said Confidential Information and not
retain or transfer any copies thereof.
(b) Confidential Information. "Confidential Information" as used
herein, means:
(i) the terms and conditions of any business transaction
that the Company or any of its subsidiaries has performed or has offered to
perform with any customer or prospective customer while you have been employed
by the Company or which you learned of while employed by the Company or any of
its subsidiaries;
(ii) any forms, business plans, manuals, operating
procedures and policies of the Company or any of its subsidiaries;
(iii) any other facts or data that are treated as
confidential and proprietary by the Company or any of its subsidiaries and that
are disclosed to or learned by you during your employment with the Company;
(iv) any documents that relate to, refer to, are involved
with, summarize, embody or constitute the Confidential Information defined in
this paragraph (b) ("documents", as used herein means forms, manuals,
compilations of data, summaries, printouts, contracts, agreements,
correspondence, memoranda, notes, files, invoices, price lists, data bases and
all copies thereof, of any kind whatsoever, whether typewritten, handwritten or
recorded electronically).
(c) Improvements, Etc. You will treat as for the sole benefit of the
Company, and fully and promptly disclose and assign to the Company without
additional "future" compensation, all ideas, discoveries, inventions and
improvements, whether patentable or not, which relate to the business, or
activities of the Company or any of its subsidiaries or which result from or
relate to the subject matter of any work which you may do for, on the premises
of, at the expense of, or on behalf of the Company or any of its subsidiaries,
and which are or have been made, conceived or reduced
3
4
to practice by you, alone or jointly with others, during or after usual working
hours, either on or off your job, while you are employed by the Company.
At the Company's expense, at any time during or after such
employment, you will sign all papers and do such other acts as the Company deems
necessary or desirable or may reasonably require of you to assign and protect
the Company's or its nominee's rights to such ideas, discoveries, inventions and
improvements, including applying for, obtaining and enforcing patents,
trademarks or copyrights on such ideas, discoveries, inventions and improvements
in any and all countries of the world.
(d) Notice. This confidentiality covenant shall not in any way
limit or restrict you from obtaining or maintaining employment in the industry
in which the Company operates, it is specifically intended to restrict and
prohibit you from using Confidential Information obtained during your
employment. The Company is concerned that you might subsequently use
Confidential Information obtained during your employment, to the Company's or
its officers, directors, and shareholders' detriment. So that your subsequent
employers are aware of this confidentiality covenant, you agree that during the
Restricted Period as described in Subsection (e) below, you shall inform all
future employers of said covenant.
(e) Restricted Period. As used herein, the term "Restricted
Period" shall mean the period commencing with the date hereof and ending on the
date that is two years after the termination of your employment with the
Company.
6. Business Relationships. You understand and agree that establishing
business relationships with representatives of the organizations served by the
Company is a demanding difficult procedure requiring a great deal of time,
effort and money, and requires the building of confidence and goodwill, and that
the Company should have the right to hold such established business
relationships as its own. You therefore agree that during the Restricted Period,
except when acting on behalf of the Company, you will not, directly or
indirectly, request or advise any client or prospective client of the Company to
withhold, curtail or cancel their business with the Company. In addition, you
agree that with respect to the Business Activities (defined below), you will not
directly or indirectly call on, or solicit any client or prospective client of
the Company whose identity as such client or prospective client, first became
known to you through your employment with the Company, whether before or after
this agreement is signed, whether the relationship was developed by you or not.
7. Covenant Not To Compete.
(a) Noncompetition. You acknowledge that the services to be
provided hereunder are unique and that their loss would cause irreparable injury
to the Company. You also hereby acknowledge and recognize the highly competitive
nature of the Company's business and, accordingly, in consideration of your
employment by the Company, you agree to the following:
4
5
(i) That during the Restricted Period, you will not,
directly or indirectly (other than on behalf of the Company), engage in the
design, development, manufacture, sale, marketing or servicing of products or
provision of services which at any time heretofore or hereafter during your
employment with the Company were designed, developed, manufactured, sold,
marketed, serviced or provided by the Company; or engage in any activity which
is in competition with the activities of the Company (the "Business Activities")
whether such engagement is as an officer, director, proprietor, employee,
partner, investor (other than as a holder of less than 5% of the outstanding
capital stock of a publicly traded corporation), consultant, advisor, agent or
otherwise, in any geographic area in which at any time prior to or during your
employment with the Company the products or services of the Company were
distributed or provided by the Company or in which the Company has competed.
(ii) That during the Restricted Period, you will not,
directly or indirectly, engage in any Business Activities (other than on behalf
of the Company) by supplying products or providing services which at any time
prior to or during your employment with the Company were supplied or provided by
the Company to any customer, client or prospective client with whom the Company
at any time prior to or during your employment with the Company has done any
business, whether as an officer, director, proprietor, employee, partner,
investor (other than as a holder of less than 5% of the outstanding capital
stock of a publicly traded corporation), consultant, advisor, agent or
otherwise.
(iii) During the Restricted Period you will not directly or
indirectly solicit, for your own account or for the account of any other person
or entity other than the Company, induce or influence any client, prospective
client, customer, supplier, lender, lessor or any other person which has a
business relationship with the Company at any time during the Restricted Period
to discontinue or reduce the extent of such relationship with the Company.
(iv) During the Restricted Period, you will not (A) directly
or indirectly recruit, solicit or otherwise induce or influence any employee or
sales agent of the Company to discontinue such employment or agency relationship
with the Company, or (B) employ or seek to employ, or cause or permit any
business which competes directly or indirectly with the Business Activities (the
"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 either you or the Competitive Business employs or seeks to employ such
person) employed by the Company.
8. Remedies. You acknowledge and agree that the Company's remedy at
law for a breach or threatened breach of any of the provisions of Sections 5, 6
or 7 would be inadequate. In recognition of this fact, in the event of a breach
by you of any of the provisions of Sections 5, 6 or 7 as determined by the
Company in its sole discretion acting in good faith, you agree that, in addition
to its remedy at law, all of your rights to payment or otherwise under this
Agreement and all amounts then or thereafter due to you from the Company under
this Agreement may be terminated, upon a final determination that there was such
a breach in accordance with Section 18 hereof, provided, however, that the
Company shall not be required to pay any amount hereunder prior to such xxxxx
0
6
determination, except upon receipt of an agreement by you to repay such amount
which you are ultimately determined not to be entitled. In addition, the
Company, without posting any bond, shall be entitled to obtain equitable relief
in the form of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be available.
Nothing herein contained shall be construed as prohibiting the Company from
pursuing any other remedies available to it for such breach or threatened
breach.
9. Termination.
(a) Employment. This Agreement shall terminate upon the first to
occur of: (i) receipt by you from the Company of notice that the Company has in
its discretion elected to terminate your employment without cause, for any
reason or no reason, in which case, (A) if notice of such termination is
provided to you within 12 months of the date hereof you shall receive, as
severance pay, an amount equal to 1/2 of your Annual Base Salary, payable in
equal monthly installments over a period of 6 months, provided, however, that
the Company's obligation to make such payments may be reduced by the Company to
the extent of all payments you receive from another employer during the period
you are entitled to receive severance payments, and such compensation in each
such case shall be the only compensation you shall be entitled to in connection
with such termination, (B) if notice of such termination is provided to you
after 12 months from the date hereof but within 24 months of the date hereof,
you shall receive, as severance pay, an amount equal to 1/4 of your Annual Base
Salary, payable in equal monthly installments over a period of 3 months,
provided, however, that the Company's obligation to make such payments may be
reduced by the Company to the extent of all payments you receive from another
employer during the period you are entitled to receive severance payments, and
such compensation in each such case shall be the only compensation you shall be
entitled to in connection with such termination, and (C) if notice of such
termination is provided to you after 24 months from the date hereof you shall
not receive any severance pay, (ii) your death, (iii) at the option of the
Company, your Disability, and for purposes of this Agreement, the term
"Disability" shall be deemed to have occurred upon written notice to you (or
your guardian or other person, if any, who has then been placed in charge of
your affairs) by the Company given at any time that you shall have failed,
because of illness or incapacity, for a period of 90 consecutive days, or for an
aggregate period of at least 120 days during the preceding 12 month period, to
render services of the character rendered by you for the Company prior to such
illness or incapacity (the date of such Disability shall be deemed to be the
fifth business day following the date of such notice), (iv) receipt by the
Company from you of notice, given not later than 180 days prior to the date of
termination, that you have elected to terminate your employment, or (v) your
discharge by the Board for cause. For purposes of this Agreement, an event or
occurrence constituting "cause" shall mean your dishonesty or insubordination,
your violation of any material Company policies, your conviction for any felony
or for a crime involving fraud or misrepresentation, your deliberate conduct,
engaged in without the prior approval of the Board, resulting in a material loss
to the Company or theft from the Company, your gross neglect or willful
misconduct in connection with the performance of your duties hereunder, or a
material violation by you of any of the provisions of this Agreement.
6
7
(b) Obligations. In the event of termination of employment for
any reason specified in paragraph (a)(ii), (iii), (iv) or (v) hereof, the
Company shall no longer be obligated to make any salary payments or other
benefits of any kind whatsoever to you or your estate other than any vested
employee benefits required by law to be provided by the Company. However, any
salary payments earned but not yet made shall be pro rated on a daily basis and
made by the Company to you or your estate. You recognize and understand that all
oral representations, prior, contemporaneous or subsequent to the execution of
this Agreement are not to be relied upon and that nothing contained in any
document published or to be published by the Company shall in any way modify the
above terms regarding termination.
10. Notices. Any notice required or permitted to be given under this
Agreement shall be deemed properly given if in writing and if mailed by
registered or certified mail, postage prepaid with return receipt requested or
sent by express courier service, charges prepaid by shipper, to your residence
address as evidenced in the Company records, or to the principal offices of the
Company, to the attention of the Chairman, in the case of notices to the Company
(or to such other address as a party is directed pursuant to written notice from
the other party). Any notice given by the Company to you at your last directed
address shall be effective to bind any other person who shall acquire rights
hereunder.
11. Assignment. This Agreement may not be assigned by you but may be
assigned by the Company.
12. Entire Agreement; Waiver. This instrument contains the entire
Agreement of the parties relating to the subject matter hereof, supersedes and
replaces any other existing employment agreements, whether oral or in writing,
and may not be waived, changed, modified, extended or discharged orally but only
by agreement in writing signed by you and the Chairman. The waiver by the
Company of a breach of any provision of this Agreement by you shall not operate
or be construed as a wavier of a breach of any other provision of this Agreement
or of any subsequent breach by you.
13. Survival of Terms. Any termination of this Agreement shall not
affect the ongoing provisions of this Agreement, which shall survive such
termination in accordance with their respective terms.
14. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Michigan.
15. Headings. The headings of the sections are for convenience only
and shall not control or affect the meaning or construction or limit the scope
or intent of any of the provisions of this Agreement.
16. Validity. If for any reason any provision hereof shall be
determined to be invalid or unenforceable, the validity and effect of the other
provisions hereof shall not be affected thereby.
7
8
17. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
18. Arbitration. Except as expressly set forth in Section 8 of this
Agreement, it is mutually agreed between the parties that arbitration shall be
the sole and exclusive remedy to redress any dispute, claim or controversy
(hereinafter referred to as "grievance") involving the negotiation, execution,
performance or termination of this Agreement. It is the intention of the parties
that the arbitration award will be final and binding and that judgment on the
award may be entered in any court of competent jurisdiction and enforcement may
be had according to its terms. Arbitration may be initiated by either party by
filing a claim for arbitration with the American Arbitration Association. Any
claim must be filed within 6 months of the act or omission giving rise to the
claim.
The arbitrator shall be chosen in accordance with the Voluntary
Labor Arbitration rules of the American Arbitration Association and the expenses
of the arbitration shall be shared equally by the Company and you. The place of
the arbitration shall be the offices of the American Arbitration Association in
Southfield, Michigan. The arbitrator shall not have jurisdiction or authority to
change any of the provisions of this Agreement by alterations, additions to or
subtractions from the terms thereof. The arbitrator's sole authority shall be to
interpret or apply any clause or clauses of this Agreement.
The parties stipulate that the provisions hereof, and the decision
of the arbitrator with respect to any grievance, shall be the sole and exclusive
remedy for any alleged breach of this Agreement or any controversy involving the
negotiation, execution, performance or termination of this Agreement. The
parties hereby acknowledge that since arbitration is the exclusive remedy,
neither party has the right to resort to any federal, state or local court or
administrative agency and that the decision of the arbitrator shall be a
complete defense to any suit, action or proceeding instituted in any federal,
state or local court or before any administrative agency with respect to any
grievance which is arbitrable as herein set forth. The arbitration provisions
hereof shall, with respect to any grievance, survive the termination or
expiration of this Agreement.
8
9
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
/s/ Xxxx X. Xxxxxx
-------------------------------------
Signature
Xxxx X. Xxxxxx
-------------------------------------
Printed Name
Oxford Automotive, Inc.,
a Michigan corporation
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Xxxxxx Xxxxxx, Chairman
9
