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Exhibit 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of March 26, 1998,
is by and between Standard Parking, L.P., a Delaware limited partnership (the
"Company"), and Xxxxxxx X. Xxxx (the "Executive").
WHEREAS, prior to the date hereof, the Executive has been employed by the
Company and the Company desires to have Executive continue in its employ; and
WHEREAS, pursuant to that certain Combination Agreement, dated as of
January 15, 1998, between, among others, APCOA, Inc., a Delaware corporation
("APCOA"), the Company and the equity holders of the Company, all of the equity
interests of the Company are being sold to APCOA; and
WHEREAS, the Company understands that APCOA intends to continue in the
business of operating private and public parking facilities for itself, its
affiliates (including the Company and its affiliates) and others, and as a
consultant and/or manager for parking facilities operated by others throughout
the United States (APCOA, its subsidiaries and affiliates (including the Company
and its subsidiaries and affiliates), and any other APCOA-controlled businesses
engaged in parking garage management (in each case including their predecessors
or successors) are referred to hereinafter as the "Parking Companies"); and
WHEREAS, the general partner of the Company has determined that it is in
the best interest of the Company to continue to employ the Executive as an
Executive Vice President and General Counsel, and the Executive desires to
continue to serve the Company in that capacity; and
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WHEREAS, the Company desires to continue to employ the Executive and the
Executive desires to continue to work for the Company on the terms and
conditions set forth herein.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. The Company shall employ the Executive, and the
Executive shall serve the Company, on the terms and conditions set forth in this
Agreement, for the period beginning March 26, 1998 (the "Effective Date") and
ending on the third anniversary hereof (the "Employment Period"), provided,
however, that commencing on the date two years after the Effective Date and on
each annual anniversary of such date (each annual anniversary thereof shall
hereinafter be referred to as the "Renewal Date"), unless previously terminated,
the Employment Period shall be automatically extended so as to terminate two
years from the Renewal Date, so that there is always between one and two years
remaining in the Employment Period, unless 90 days prior to the Renewal Date the
Company or the Executive shall terminate this Agreement by giving notice to the
other party that the Employment Period shall not be so extended (a "Notice of
Nonrenewal"). Notwithstanding any such termination, Section 6 of this Agreement
shall remain in full force and effect.
2. Position and Duties. During the Employment Period, the Executive shall
serve as an Executive Vice President and General Counsel, with the duties and
responsibilities currently associated with such position. During the Employment
Period, and excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive shall devote full attention and time during
normal business hours to the business and affairs of the Company and, to the
extent necessary to discharge the responsibilities assigned to the Executive
under this Agreement, use the Executive's reasonable best efforts to carry out
such responsibilities faithfully
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and efficiently. The Executive shall not, during the term of this Agreement,
engage in any other business activities that will interfere with the Executive's
employment pursuant to this Agreement. During the Employment Period, the
Executive's services shall be performed primarily in Chicago, Illinois.
3. Compensation. (a) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary") of no less
than $376,400, payable in accordance with the normal payroll practices for
executives of the Company as in effect from time to time (but no less frequently
than monthly). Such Annual Base Salary shall be subject to review annually in
accordance with the review policies and practices for executives of the Company
as in effect at the time of any such review.
(b) Bonus. For each calendar year ending during the Employment Period, the
Executive shall be eligible to receive an annual bonus (the "Annual Bonus"),
based upon the terms and conditions of an annual bonus program to be established
by the Company. Any such annual bonus program shall provide that the Executive's
target bonus ("Target Annual Bonus") will be a percentage of the Annual Base
Salary mutually agreed upon by the Company and Executive.
(c) Equity Plan. In the event the Company adopts an equity incentive plan
or program (the "Equity Plan") for its key executives, the Executive shall be
entitled to participate in the Equity Plan from and after the effective date
thereof in accordance with the terms and conditions of such plan.
(d) Other Benefits. In addition to the foregoing, during the Employment
Period: (i) the Executive shall be entitled to participate in savings,
retirement, and fringe benefit plans,
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practices, policies and programs of the Company as in effect from time to time,
on the same terms and conditions as those applicable to peer executives; (ii)
the Executive shall be entitled to four weeks of annual vacation, to be taken in
accordance with the vacation policy as in effect from time to time; and (iii)
the Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in, and shall receive all benefits under medical,
dental, disability and other welfare benefit plans, practices, policies and
programs provided by the Company, as in effect from time to time, on the same
terms and conditions as those applicable to peer executives.
(e) Executive shall be reimbursed by the Company for business expenses
incurred on behalf of the Parking Companies in accordance with the policies and
practices of the Company as in effect from time to time.
4. Termination of Employment. (a) Death or Disability. In the event of the
Executive's death during the Employment Period, the Executive's employment with
the Company shall terminate automatically. The Company, in its discretion, shall
have the right to terminate the Executive's employment because of the
Executive's Disability during the Employment Period. "Disability" means that (i)
the Executive has been unable, for a period of 180 consecutive days, or for
periods aggregating 180 business days in any period of twelve months, to perform
the Executive's duties under this Agreement, as a result of physical or mental
illness or injury, and (ii) a physician selected by the Company or its insurers
has determined that the Executive's incapacity is total and permanent. A
termination of the Executive's employment by the Company for Disability shall be
communicated to the Executive by written notice, and shall be effective on the
30th day after receipt of such notice by the Executive (the "Disability
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Effective Date") unless the Executive returns to full-time performance of the
Executive's duties before the Disability Effective Date.
(b) By the Company. In addition to termination for Disability, the Company
may terminate the Executive's employment during the Employment Period for Cause
or without Cause. "Cause" means:
(i) the continued and willful or deliberate failure of the Executive
substantially to perform the Executive's duties, or to comply with the
Executive's obligations, under this Agreement (other than as a result of
physical or mental illness or injury), or
(ii) illegal conduct or gross misconduct by the Executive, in either
case that is willful and results in material damage to the business or
reputation of the Company.
Upon the occurrence of events constituting Cause as defined in subsection (i) of
this paragraph (b), the Company shall give the Executive advance notice of any
such termination for Cause and shall provide the Executive with a reasonable
opportunity to cure.
(c) Voluntarily by the Executive. The Executive may terminate his
employment by giving written notice thereof to the Company.
(d) Date of Termination. The "Date of Termination" means the date of the
Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company for Cause as set forth
in notice from the Company is effective, or the date on which the Executive
gives the Company notice of a termination of employment, as the case may be.
After the Executive's termination occurs for any reason, in addition to any
other obligations hereunder, the Company shall pay the Executive:
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(i) the Executive's Annual Base Salary for the period ending with
the Date of Termination;
(ii) payment for unused vacation days accrued for the year in which
the Executive's termination occurs, as determined in accordance with the
Company policy as in effect from time to time; and
(iii) any other payments or benefits to be provided to the Executive
by the Company pursuant to any employee benefit plans or arrangements
adopted by the Company, to the extent such amounts are due from the
Company. Except as may otherwise be expressly provided to the contrary in
this Agreement, nothing in this Agreement shall be construed as requiring
Executive to be treated as employed by the Company for purposes of any
employee benefit plan following the Date of Termination.
5. Additional Obligations of the Company upon Termination. (a) By the
Company Other Than for Cause, Death or Disability: If, during the Employment
Period, the Company terminates the Executive's employment, other than for Cause,
death or Disability, but excluding any termination of employment at the end of
the Employment Period (whether or not as a result of a Notice of Nonrenewal by
the Company), the Company shall, for the remainder of the Employment Period as
in effect immediately before the Date of Termination, continue to pay the
Executive the Annual Base Salary and Annual Bonus(es) through the end of the
then-current Employment Period, as and when such amounts would be paid in
accordance with Sections 3(a) and (b) above; provided, that the amount of each
of the Annual Bonus(es) so paid shall equal the Target Annual Bonus. The Company
shall also continue to provide for the same period welfare benefits to the
Executive and/or the Executive's family, at least as favorable as those that
would
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have been provided to them under clause (d)(iv) of Section 3 of this Agreement
if the Executive's employment had continued until the end of the Employment
Period; provided, that during any period when the Executive is eligible to
receive such benefits under another employer-provided plan, the benefits
provided by the Company under this Section 5(a) may be made secondary to those
provided under such other plan. The payments provided pursuant to this Section
5(a) are intended as liquidated damages for a termination of the Executive's
employment by the Company other than for Cause or Disability and shall be the
sole and exclusive remedy therefor.
(b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, the Company shall make, within
30 days after the Date of Termination, a lump-sum cash payment to the
Executive's estate equal to the sum of (i) the Executive's Annual Base Salary
through the end of the calendar month in which death occurs, (ii) any earned and
unpaid Annual Bonus for any calendar year ended prior to the Date of
Termination, (iii) any accrued but unpaid vacation pay and (iv) any other vested
benefits to which the Executive is entitled, in each case to the extent not yet
paid.
(c) Disability. In the event the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period in accordance
with Section 4(a) hereof, the Company shall pay to the Executive or the
Executive's legal representative, as applicable, (i) the Executive's Annual Base
Salary for the duration of the Employment Period in effect on the Date of
Termination, provided that any such payments made to the Executive shall be
reduced by the sum of the amounts, if any, payable to the Executive under any
disability benefit plans of the Company or under the Social Security disability
insurance program, (ii) any earned and unpaid
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Annual Bonus for any calendar year ended prior to the Date of Termination and
(iii) any other vested benefits to which the Executive is entitled, in each case
to the extent not yet paid.
(d) Cause: Voluntary Termination. If the Executive's employment is
terminated by the Company for Cause or the Executive voluntarily terminates his
employment during the Employment Period, the Company shall pay the Executive
only those amounts specified in Section 5(d), in each case to the extent not yet
paid, and the Company shall have no further obligations under this Agreement.
(e) Termination After a Change in Control. (i) If Executive is terminated
by the Company during the three-year period following a Change in Control (as
defined in Section 5(f) below) for any reason other than Cause, then Executive
shall be entitled to the following:
(A) During the longer of (i) the 18-month period following his
termination and (ii) the remainder of the Employment Period in effect at
the date of termination, and except to the extent prohibited under the
terms of any applicable insurance policy, he shall continue to be covered
under the Company's welfare benefit plans to the same extent and on the
same terms as those benefits are provided to the Company's active
employees.
(B) He shall receive from the Company an amount (the "Severance
Pay") equal to the greater of (i) one and one-half times the sum of (x)
the Executive's current Annual Base Salary plus (y) the amount of any
bonus paid to Executive in the preceding twelve months and (ii) the Annual
Base Salary and Annual Bonuses through the end of the then current
Employment Period (provided, that the amount of each of the Annual Bonuses
so paid shall equal the Target Annual Bonus). The Severance Pay amount
shall be paid (a) if clause (i) in the previous sentence applies, over the
18-month period
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commencing on the date Executive's employment terminates, in equal monthly
or more frequent installments in accordance with the Company's payroll
schedule or (b) if clause (ii) in the previous sentence applies, as and
when such amounts would be paid in accordance with Sections 3(a) and (b)
above.
The Company's obligation to provide welfare benefit coverage and make severance
payments under this Section 5(e) shall cease with respect to periods after the
earlier to occur of the date of Executive's death, or the date, if any, of the
breach by Executive of the provisions of Section 6.
(ii) If Executive terminates his employment hereunder voluntarily
following a Change in Control, then Executive shall not be entitled to Severance
Pay; provided, however, that if Executive terminates his employment for Good
Reason (as defined below) during the three-year period following a Change in
Control, such termination shall not be considered a voluntary termination by
Executive and Executive shall be treated as if he had been terminated by the
Company pursuant to paragraph (i) of this Section 5(e) above. "Good Reason"
means, in the event of or following a Change in Control:
(A) without the express written consent of the Executive, (1) the
assignment to the Executive of duties inconsistent in any substantial
respect with the Executive's position, authority or responsibilities as
held, exercised and assigned during the ninety (90) day period immediately
preceding the Change in Control, or (2) any other substantial adverse
change in such position (including titles, authority or responsibilities)
or significant reduction in salary, unless in either case the change is
warranted by an objective evaluation of Executive's performance or is
related to a bona fide company restructuring;
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(B) any failure by the Company to comply with any of the provisions
of this Agreement, other than an insubstantial and inadvertent failure
remedied by the Company promptly after receipt of notice thereof given by
the Executive; or
(C) the Company requires or otherwise takes such action as would
reasonably require the Executive's relocation.
(f) For purposes of this Agreement, the term "Change in Control" shall
mean the first to occur of the date Xxxxx X. Xxxxxxxxx either (i) no longer
serves as Chief Executive Officer of the Company or (ii) no longer retains, for
whatever reason, primary responsibility for the daily management of the Company
and the ability to implement his management decisions with respect to the
Company.
(g) In the event that it shall be necessary for Executive to engage in
litigation in connection with the enforcement of his rights under paragraphs (i)
and (ii) of Section 5(e), he shall be entitled to recover from the Company the
reasonable attorney's fees and other costs incurred in such legal action, in
addition to any other relief to which he may be entitled; provided, however,
that Executive ultimately prevails in such litigation.
6. Protection of the Company Assets (Confidentiality, Non-Competition and
Other Matters). (a) Executive recognizes and acknowledges that the acquisition
and operation of, and the providing of consulting services for, parking
facilities is a unique enterprise and that there are relatively few firms
engaged in these businesses in the primary areas in which the Parking Companies
operate. Executive further recognizes and acknowledges that as a result of his
employment with the Parking Companies, Executive has had and will continue to
have access to confidential information and trade secrets of the Parking
Companies that constitute proprietary
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information that the Parking Companies are entitled to protect, which
information constitutes special and unique assets of the Parking Companies,
including, but not limited to, (i) information relating to the Parking
Companies' manner and methods of doing business, including, but not limited to,
strategies for negotiating leases and management agreements; (ii) the identity
of the Parking Companies' clients, customers, lessors and locations, and the
identity of any individuals or entities having an equity or other economic
interest in any of the Parking Companies to the extent such identity has not
otherwise been voluntarily disclosed by any of the Parking Companies; (iii) the
specific confidential terms of management agreements, leases or other business
agreements, including, but not limited to, the duration of, and the fees, rent
or other payments due thereunder; (iv) the identities of beneficiaries under
land trusts; (v) the business, developments, activities or systems of the
Parking Companies, including, but not limited to, any marketing or customer
service oriented programs in the development stages or not otherwise known to
the general public; (vi) information concerning the business affairs of any
individual or firm doing business with the Parking Companies; (vii) financial
data and the operating expense structure pertaining to any parking facility
owned, operated, leased or managed by the Parking Companies or for which the
Parking Companies have or are providing consulting services; and (viii) other
confidential information and trade secrets relating to the operation of the
Company's business (the matters described in this sentence hereafter referred to
as the "Trade Secrets").
(b) Confidentiality. With respect to Trade Secrets, and except as may be
required by the lawful order of a court of competent jurisdiction, the Executive
agrees that he shall:
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(i) hold all Trade Secrets in strict confidence and not publish or
otherwise disclose any portion thereof to any person whatsoever except
with the prior written consent of the Parking Companies;
(ii) use all reasonable precautions to assure that the Trade Secrets
are properly protected and kept from unauthorized persons;
(iii) make no use of any Trade Secrets except as is required in the
performance of his duties for the Parking Companies; and
(iv) upon termination of his employment with the Parking Companies,
whether voluntary or involuntary and regardless of the reason or cause, or
upon the request of the Parking Companies, promptly return to the Parking
Companies any and all documents, and other things relating to the Trade
Secrets, all of which are and shall remain the sole property of the
Parking Companies. The term "documents" as used in the preceding sentence
shall mean all forms of written or recorded information and shall include,
but not be limited to, all accounts, budgets, compilations, computer
records (including, but not limited to, computer, programs, software,
disks, diskettes or any other electronic or magnetic storage media),
contracts, correspondence, data, diagrams, drawings, financial statements,
memoranda, microfilm or microfiche, notes, notebooks, marketing or other
plans, printed materials, records and reports, as well as any and all
copies, reproductions or summaries thereof.
Notwithstanding the above, nothing contained herein shall restrict Executive
from using, at any time after his termination of employment with the Company,
information which is in the public domain or knowledge acquired during the
course of his employment with the Company which is
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generally known to persons of his experience in other companies in the same
industry
(c) Assignment of Intellectual Property Rights. The Executive agrees to
assign to the Company any and all intellectual property rights including
patents, trademarks, copyright and business plans or systems developed, authored
or conceived by the Executive while so employed and relating to the business of
the Parking Companies, and the Executive agrees to cooperate with the Company's
attorneys to perfect ownership rights thereof in the Company or any one or more
of the Parking Companies. This agreement does not apply to an invention for
which no equipment, supplies, facility or trade secret information of the
Parking Companies was used and which was developed entirely on the Executive's
own time, unless (i) the invention relates either to the business of the Parking
Companies or to actual or demonstrably anticipated research or development of
the Parking Companies, or (ii) the invention results from any work performed by
the Executive for the Parking Companies.
(d) Covenants Not to Compete. The Executive agrees that while he is
employed by the Company and for a period of two (2) years after the date on
which such employment terminates (or eighteen (18) months after the date such
employment terminates if such termination follows a Change in Control), the
Executive shall not, directly or indirectly:
(i) have an ownership interest in (other than ownership of 5% or
less of the outstanding stock of any entity listed on the New York or
American Stock Exchange or included in the National Association of
Securities Dealers Automated Quotation System) any corporation, firm,
joint venture, partnership, proprietorship, or other entity or association
which manages, owns or operates a parking facility that is competitive
with the business of the Parking Companies in any of the metropolitan
areas in which, as of
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the time Executive's employment terminates, the Parking Companies own,
manage and/or operate one or more parking facilities (hereinafter the
"Metropolitan Areas");
(ii) become employed by, work for, consult with, or assist any
person, corporation, firm, joint venture, partnership, proprietorship, or
any other entity or association that is engaged in a business which is
competitive with the business of the Parking Companies in the Chicago
metropolitan area or in any of the other Metropolitan Areas in which the
Executive has been responsible for performing supervisory or other
services on behalf of any of the Parking Companies within the three (3)
years immediately preceding the termination of his employment;
(iii) contact or solicit business from any client or customer of the
Parking Companies or from any person who is responsible for referring or
who regularly refers business to the Parking Companies; or
(iv) take any action to recruit or to assist in the recruiting or
solicitation for employment of any officer, employee or representative of
the Parking Companies.
It is not the intention of the Parking Companies to interfere with the
employment opportunities of former employees except in those situations,
described above, in which such employment would conflict with the legitimate
interests of the Parking Companies. If the Executive, after the termination of
his employment hereunder, has any question regarding the applicability of the
above provisions to a potential employment opportunity, the Executive
acknowledges that it is his responsibility to contact the Company so that the
Company may inform the Executive of its position with respect to such
opportunity.
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(e) Remedies. The Executive acknowledges that the Parking Companies would
be irreparably injured by a violation of the covenants of this Section 6 and
agrees that the Company, or any one or more of the Parking Companies, in
addition to any other remedies available to it or them for such breach or
threatened breach, shall be entitled to a preliminary injunction, temporary
restraining order, or other equivalent relief, restraining the Executive from
any actual or threatened breach of any of the provisions of this Section 6. If a
bond is required to be posted in order for the Company or any one or more of the
Parking Companies to secure an injunction or other equitable remedy, the parties
agree that said bond need not exceed a nominal sum. This Section shall be
applicable regardless of the reason for the Executive's termination of
employment, and independent of any alleged action or alleged breach of any
provision hereby by the Company. If at any time any of the provisions of this
Section 6 shall be determined to be invalid or unenforceable by reason of being
vague or unreasonable as to duration, area, scope of activity or otherwise, then
this Section 6 shall be considered divisible (with the other provisions to
remain in full force and effect) and the invalid or unenforceable provisions
shall become and be deemed to be immediately amended to include only such time,
area, scope of activity and other restrictions, as shall be determined to be
reasonable and enforceable by the court or other body having jurisdiction over
the matter, and the Executive expressly agrees that this Agreement, as so
amended, shall be valid and binding as though any invalid or unenforceable
provision had not been included herein.
7. Successors. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will
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or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive's legal representatives.
This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would have been required to perform it if no such succession had taken
place. As used in this Agreement, "Company" shall mean both the Company as
defined above and any such successor that assumes and agrees to perform this
Agreement, by operation of law or otherwise.
8. Miscellaneous. (a) This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Illinois without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified except by a written agreement executed by the parties
hereto or their respective successors and legal representatives.
(b) All notices and other communications under this Agreement shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
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If to the Executive:
Xxxxxxx X. Xxxx
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
If to the Company:
Standard Parking, L.P.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
with a copy to:
Xxxxxxx Industries, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Chief Financial Officer
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 8. Notices and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
(d) Notwithstanding any other provision of this Agreement, the Company may
withhold from amounts payable under this Agreement all federal, state, local and
foreign taxes that are required to be withheld by applicable laws or
regulations.
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(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.
(f) The Executive and the Company acknowledge that this Agreement
supersedes any other agreement, whether written or oral, between them concerning
the subject matter hereof, including, but not limited to, any written or oral
employment agreement between the Company and the Executive.
(g) This Agreement may be executed in several counterparts, each of which
shall be deemed an original, and said counterparts shall constitute but one and
the same instrument.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization of its general partner, the Company has
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ Xxxxxxx X. Xxxx
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XXXXXXX X. XXXX
STANDARD PARKING, L.P.
By: Standard Parking Corporation
Its: General Partner
By: /s/ Xxxxx X. Xxxxxxxxx
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Its: President
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