EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), dated April 2,1997 between
Xxxxxx X. Xxxxxxxxxxx, whose address is 0000 Xxxxxxxxx, Xxxxxxxxxx Xxxxx, XX
00000 ("Employee" and/or "Skandalaris") and Noble International, Ltd., whose
address is 00 Xxxxxxxxxx Xxxxx Xxxxxxx, Xxx. 000, Xxxxxxxxxx Xxxxx, XX 00000, a
Michigan corporation (the "Company"), to be effective March 1, 1997.
BACKGROUND
A. Employee has been a principal executive of the Company and its
subsidiaries since 1993 and in such capacity has developed an
intimate and thorough knowledge of the Company's business, its
methods, trade secrets and operations as well as personal
relationships with key individuals in the Company and the
Company's subsidiaries (the "Subsidiary").
B. Employee is presently Chief Executive Off'cer and President of
the Company. In addition, Employee maintains various off'cer and
director positions with the subsidiaries.
C. The Company desires to secure the services of Employee for the
benefit, growth, development and enhancement of the value of the
Company and the subsidiaries.
D. The Company desires to engage Employee as the Chief Executive
Officer and President and Employee desires to serve in such
capacities.
NOW, THEREFORE, intending to be legally bound, and- in consideration of
the mutual promises and representations set forth in this Agreement, the Company
and Employee agree as follows:
ARTICLE I - EMPLOYMENT, DUTIES AND TERM
1.01 Employment. The Company agrees to employ Employee, and Employee
accepts employment with the Company, to serve as President and Chief Executive
Of ficer of the Company and as an off~cer or other capacity of any Subsidiary
formed by the Company as determined by the Board of Directors of such Subsidiary
on the terms and conditions set forth herein.
1.02 Duties and Responsibilities. During the Employment Term, as defined
below, Employee will render such services to the Company and its subsidiaries as
are customary for the position (or positions) held. by Employee. During the
Employment Term, Employee shall devote substantially all his time, ability and
attention, and his best efforts, to the business of the Company and the
Subsidiaries; provided, however, that nothing herein shall prevent Employee from
overseeing his existing investments or enterprises provided that such other
business are not competitive in any manner with any business then being
conducted by the Company or any of its subsidiaries, or investing in any
business the shares of stock of which are publicly traded even if such
businesses are competitive, or in any mutual or similar type of investment fund.
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1.03 Employment Term. The term of this Agreement shall for a period
commencing on the date of this Agreement and continuing for three (3) years from
such commencement date unless sooner terminated pursuant to the provisions of
Section 3 of this Agreement. Commencing on the third anniversary of the
commencement date, and on every third anniversary date thereafter, the term of
employment shall be extended automatically for an additional three (3) year
period unless sooner terminated pursuant to the provisions of Section 3 of this
Agreement or unless the Company or Executive, not less than 60 days prior to any
such anniversary date, elects that such automatic extension no longer be
effective and so notifies the other party. The period described in this Section,
including such extensions and renewals, shall be defined as the "Term of
Employment."
ARTICLE II - COMPENSATION
2.01 Compensation. Subject to Article III of this Agreement, as
compensation for services hereunder and in consideration for the protective
covenants set forth in Article IV of this Agreement, during the Employment Term
the Employee shall be entitled to the following compensation, which may be
amended at the discretion of the Board of Directors.
A) Base Salary. During the Term of Employment, Employee shall
receive a base salary as follows:
1. From March 1, 1997 through April 30, 1997 at an annual
rate equal to One Hundred Fifty Thousand Dollars
($150,000.00) payable in accordance with the Company's
normal procedures for compensating employees, less all
applicable state and federal withholdings as required by
law; and thereafter
2. From May 1, 1997 through the Employment Term, at an
annual rate of Two Hundred Twenty-Five Thousand Dollars
($225,000.00) ("Base Salary"), payable in accordance
with the Company's normal procedures for compensating
employees, less all applicable state and federal
withholdings as required by law.
B) Incentive Bonus In addition to the Base Salary, for each fiscal
year during the Term of Employment, Employee shall receive an
Incentive Bonus ("Incentive Bonus"), which bonus shall be set by
the Board of Directors based upon the achievements of the
Company during such fiscal year. The Incentive Bonus shall be
payable on or before the 30th day subsequent to the receipt of
the Company's audited financial statements for such fiscal year.
C) Other Bonus. In addition to the Incentive Bonus provided in
Section 2.01 (B), the Employee shall also be entitled to
participate in a manner as determined by the Board of Directors
in any executive bonus program for executive employees presently
or hereinafter adopted by the Company. The Employee shall also
be entitled to
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receive such aditional bonus compensation as determi xxx by the
Board of Directors, including participation in any Incentive
Stock Option plans now existing or hereinafter adopted by the
Company. The Incentive Bonus and the Additional Bonus shall be
collectively referred to as ("Bonus").
2.02 Employee Benefits. During the term of this Agreement, Employee will
be entitled to participate in and receive the benefits of all plans, benefits,
and privileges given to employees and executives of the Company, whether now
established or granted or which may come into existence hereafter, to the extent
commensurate with his then duties and responsibilities as fixed by the Agreement
and the Company's Board of Directors.
2.03 Expenses. During the Employment Term, the Company shall pay or
reimburse Employee for all reasonable travel and other expenses incurred or paid
by him in connection with his performance under this Agreement, in accordance,
with the Company's reimbursement policies and upon submission of satisfactory
evidence thereof.
2.04 Vacation Employee shall be entitled to four (4) weeks paid vacation
during each year of the term of this Agreement at the time or times reasonably
agreeable to both Employee and the Company.
2.05 Wage Continuationz If Employee becomes physically or mentally
disabled so as not to be able to perform his full time regular duties as
contemplated by this Agreement, he shall nevertheless continue to receive the
Salary in accordance with the provisions of this Article II hereof for twelve
(12) months, after the date Employee become disabled. Thereafter, except as
otherwise provide herein, the Company shall have no further obligation to pay
Base Salary to Employee until Employee shall have recommenced the performance of
his full time regular duties.
ARTICLE III - TERMINATION
3.01 Employee Election. In the event Employee elects to terminate his
employment under this Agreement for reasons other than death or permanent
disability, the Salary payable pursuant to Article II hereof shall terminate
effective the date of Employee's termination of his employment. Following such
termination the Company shall continue to pay to Employee the amount of any
Incentive Bonus due Employee in accordance with the terms of Article II of this
Agreement; provided, however, that for purposes of calculating the Incentive
Bonus due Employee pursuant to this Section, the Termination Date shall be
deemed to be December 31, of the year in which Employee elected to terminate his
employment under this Agreement.
3.02 Termination on Death or Disability. Either the Company or Employee
shall have the right to terminate Employee's employment under this Agreement if
Employee becomes permanently and totally disabled, which shall, for purposes of
this Agreement, be defined as the permanent inability to satisfactorily perform
Employee's regular full time duties as determined by the physician primarily
responsible for the medical treatment of Employee; provided, however that any
disability which continues without interruption for twelve (12) consecutive
months shall be deemed total and permanent, unless in the written medical
opinions of the physician primarily responsible for the medical treatment of
Employee and of a qualified physician selected by Company's Board of Directors,
Employee will be able to resume performing his regular full time duties within a
period of twenty-four (24) months from the date on which the period of
consecutive
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disability commenced.
3.03 Termination by Company
A. Early Termination. The Company may terminate Employee's
employment at any time, with or without Cause. For purposes of
this Agreement, the term "Cause" shall mean intentional theft,
fraud or gross negligence.
B. Constructive Termination. In the event at any time prior to the
termination date of this Agreement the Company's Board of
Directors shall fail to designate or elect Employee as Chief
Executive Officer and President of the Company, or shall remove
Employee from any such office, or change the duties and
responsibilities of the offices held by Employee such that the
remaining duties and responsibilities are not commensurate with
those generally belonging to the offices of Chief Executive
Officer and President, and Employee shall not be in breach of
this Agreement, and provided further that the Company has not
cured the foregoing within thirty (30) days after the occurrence
of such event ("Cure Period"), the Employee shall have the
right, upon written notice to the Company within thirty (30)
days after the expiration of the Cure Period, to deem his
employment hereunder to have been terminated by the Company
effective thirty (30) days after such notice and the Company, as
and for liquidated damages, shall make the payments specified in
Section 3.04. In the event Employee fails to exercise such
alternative in writing, the Employee shall continue in
employment for the Company upon the terms and conditions
specified in this Agreement including Article II hereof, except
that Employee shall no longer continue to perform the duties of
any office which he does not hold; provided, however, that in
any event, Employee's duties shall be that of, and shall be of a
dignity and character appropriate to, a senior executive officer
of the Company and the Employee shall be entitled to incur on
behalf of the Company reasonable expenses in connection with
such duties.
3.04 Payments as Liquidated Damages. In the event that the (a)
Employee's employment with Company terminates pursuant to Section 3.02 or 3.03
for reasons other than for Cause, or (b) gives notice that there will be no
automatic renewal of this Agreement pursuant to Section 1.03 hereof, the
Company, as and for severance and/or liquidated damages, shall pay to Employee a
severance equal to three (3) times Employee's annual base salary at the time of
termination and the Company shall pay to Employee or his personal representative
amounts equal to any Incentive Bonus which would have become due to Employee in
accordance with the terms of Article 2 of this Agreement (the "Severance
Payment"). If Employee's employment with the Company is terminated for Cause, as
defined above, the Company shall have no obligation to Employee except to pay
Employee his base salary and Incentive Bonus and other benefits provided herein
as he may be entitled to receive up to the time of termination.
At the Company's option, the Severance Payment shall be paid either (a)
in equal monthly installments over the thirty-six months following the
termination date, or (b) in one lump sum payable within thirty (30) days
following the termination date. The Company shall withhold all applicable income
and employment taxes from the Severance Payment.
ARTICLE IV- PROTECTIVE COVENANTS
4.01 Non-Competition. For the period commencing on the date that
Employee's employment with the Company terminates, either voluntarily or
involuntarily, and ending on the third anniversary thereof (unless the Employee
is terminated by the Company other than for Cause (as defined in
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Article III), in which case for the period commencing on the date the Company
terminates the Employee and ending on the first anniversary thereof) Employee
shall not (i) own, manage, operate, control, or participate in the ownership,
management, operation or control of, or be connected, directly or indirectly, as
proprietor, partner, shareholder (other than ownership of not more than 80% of
any class of securities of a publicly traded entity which engages in a Competing
Activity, as defined herein), director, officer, executive, employee, agent,
creditor, consultant, joint venturer, investor or in any other capacity or
manner whatsoever, with any entity which engages in any business which directly
or indirectly competes with the business of the Company or the Subsidiaries
("Competing Activity"), or (ii) directly or indirectly as proprietor, partner,
shareholder, director, officer, executive, employee, agent, creditor,
consultant, joint venturer, investor or in any other capacity or manner
whatsoever, solicit or hire (in connection with or to be involved in any
Competing Activity) any person employed in the Company or the Subsidiaries'
business on or after the date hereof.
4.02 Trade Secrets. Employee agrees not to divulge, communicate, use to
the detriment of the Company or the Subsidiary, for Employee's benefit or the
benefit of any other person, firm, corporation, association or other entity, or
misuse in any way, in whole or in part, any proprietary or confidential
information or trade secrets related to the Company or the Subsidiary, as they
may exist from time, to time, including, without limitation, the Company's
and/or the Subsidiaries' trade secrets, trademarks or other intellectual
property rights, personnel information, secret processes, know how, customer
lists, or other technical, confidential or proprietary data. Employee
acknowledges that the list of its customers as it may exist from time to time,
and the proprietary or confidential information, and trade secrets, are
valuable, special and unique assets of the Company and the Subsidiaries.
Employee acknowledges and agrees that any information or data he has acquired on
any of these matters or items was received in confidence. Employee agrees to
hold, as the property of the Company, all memoranda, books, papers, letters and
other data and all copies thereof or therefrom, made by it or him or otherwise
coming into its or his possession, and at any time to deliver the same to the
Company upon its demand.
4.03 Reasonable Limitations. Employee acknowledges that given the nature
of the Company's business the covenants contained in this Article IV contain
reasonable limitations as to time, geographical area and scope of activity to be
restrained, and do not impose a greater restraint than is necessary to protect
the legitimate business interests of the Company. If, however, this Article IV
is determined by any court of competent jurisdiction to be unenforceable by
reason of its extending for too long a period of time or over too large a
geographic area or by reason of its being too extensive in any other respect or
for any other reason it will be interpreted to extend only over the longest
period of time for which it may be enforceable and/or over the largest
geographical area as to which it may be enforceable and/or to the maximum extent
in all other aspects as to which it may be enforceable, all as determined by
such court and in such action
4.04 Breach of Covenants. Violation of any of the protective covenants
contained herein shall constitute a breach of trust and is grounds for immediate
dismissal with cause and for appropriate legal action by the Company for damages
including reasonable attorney fees and costs, enforcement and/or injunctive
relief.
4.05 Extension of Limitation Period. The parties acknowledge that if
Employee violates any of the protective covenants in this Article IV and the
Company brings legal action for injunctive, damages or other relief hereunder,
the Company shall, as a result of the time involved in obtaining the relief, be
deprived of the benefit of the full Limitation Period of these protective
covenants.
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Accordingly, the Limitation period shall be deemed to have the full duration of
the period stated therein, computed from the date relief is granted, but reduced
by the time between the period when the restriction began to run and the date of
the first violation of the covenant by Employee.
4.06 Survival of Protective Covenants. Each covenant on the part of
Employee contained in this Article IV shall be construed as an agreement
independent of any other provision of this Agreement, and shall survive the
termination of Employee's employment under this Agreement, and the existence of
any claim or cause of action of Employee against the Company, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of such covenant.
4.07 Remedies for Breach. Employee acknowledges that the legal remedies
for breach of the protective covenants hereunder are inadequate and therefore
agrees that, in addition to all of the remedies available to the Company in the
event of a breach or a threatened breach of any covenant contained in this
Article IV, the Company may obtain temporary, preliminary, and permanent
injunctions and any other appropriate equitable relief against any and all such
actions.
4.08 Affiliates of the Company. The protective covenants in this Article
IV shall also benefit the business and trade secrets of the Company's Affiliates
(as hereinafter defined) and these covenants shall be enforceable against
Employee by each of such Affiliates as third party beneficiaries. An "Affiliate"
is any person or entity that, directly or indirectly, controls or is controlled
by, or is under common control with, the Company.
ARTICLE V- MISCELLANEOUS
5.01 Modification Of This Agreement. Employee acknowledges and agrees
that no one employed by or representing the Company has any authority to make
oral statements which modify, waive or discharge, in any manner, any provision
of this Agreement. Employee further acknowledges and agrees that no provision of
this Agreement may be modified, waived or discharged unless agreed to in
writing, and signed and executed by Employee and a majority of the members of
the Board of Directors of the Company. Employee acknowledges and agrees that in
executing this Agreement he has not relied upon any representation or statement
made by the Company or its representatives, other than these specifically stated
in this Agreement.
5.02 Notices. All notices required or permitted hereunder shall be made
in writing by hand delivery, certified or registered first-class mail, facsimile
transmission or air courier guaranteeing overnight delivery to the other party
at the addresses set forth above or to such other address as either of such
parties may designate in a written notice served upon the other party in the
manner provided herein. All notices required or permitted hereunder shall be
deemed duly given and received when delivered by hand, if personally delivered;
on the fifth (day) day next succeeding the date of mailing if sent by certified
or registered first-class mail, when received if sent by facsimile transmission,
and on the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
5.03 Waiver of Breach. The waiver by the Company or Employee of a breach
of any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any other or subsequent breach by the other party of
such or any other provision. No delay or omission by the Company or Employee in
exercising any right, remedy or power hereunder or existing at law or in equity
shall be construed as a waiver thereof, and any such right, remedy or power may
be
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exercised by the Company fo Employee from time to time and as often: as may be
deemed expedient or necessary by the Company or Employee in its or his sole
discretion.
5.04 Severability. It is the intention of the parties that the
provisions contained herein shall be enforceable to the fullest extent
permissible under applicable law, but that the unenforceability (or modification
to conform to such law) of any provision or provisions hereof shall not render
unenforceable, or impair, the remainder hereof. If any term or provision of this
Agreement or the application thereof to any person or circumstance shall, either
in whole or in part, be held invalid or unenforceable by a court of competent
jurisdiction, this Agreement shall be deemed amended to delete or modify, as
necessary, the offending provision or provisions and to alter the bounds thereof
in order to render it valid and enforceable; but in such event the affected
provisions of this Agreement shall be curtailed and restricted only to the
extent necessary to bring them within the applicable legal requirements, and the
remainder of this Agreement shall not be affected.
5.05 Applicable Law: Jurisdiction. Each party irrevocably submits to the
exclusive jurisdiction of the federal and state courts for the State of Michigan
for purposes of any action, suit or other proceeding arising out of this
Agreement or any transaction contemplated hereby. The parties have agreed that
this Agreement shall be governed by, construed and enforced in accordance with
the laws of the State of Michigan without giving effect to conflict of law
principles.
5.06 Settlement of Disputes. Any claims, controversies, demands,
disputes, or differences between the parties hereto arising out of, or by virtue
of, or in connection with, or relating to this Agreement, Employee's employment
relationship with the Company or termination of such employment relationship
shall be submitted to and settled by arbitration in Southfield, Michigan before
a single arbitrator who shall be knowledgeable in the field of business law and
employment relations and such arbitration shall be in accordance with the rules
of the American Arbitration Association then in force. The parties agree to bear
joint and equal responsibility for all fees of the arbitrator, abide by any
decision rendered as final and binding, and waive the right to submit the
dispute to a public tribunal for a jury or nonjury trial.
5.07 Headings. The headings used throughout this Agreement have been
used for convenience only and do not constitute matter to be considered in
interpreting this Agreement.
5.08 Acknowledgment. Employee acknowledges receipt of a copy of this
Agreement, and agrees that his obligations hereunder shall be binding upon his
heirs, assigns and legal representatives. Employee acknowledges and agrees that
this Agreement contains the entire agreement and understanding concerning the
subject maker covered by this Agreement, and that this Agreement supersedes and
replaces any other existing agreement, whether written or oral, entered into
between Employee, the Company, DCT and Transferor or among any of them, relating
generally to the subject maker covered by this Agreement, including specifically
any agreement that provides for the payment of severance benefits to Employee.
AGREED TO AND ACKNOWLEDGED the day and year set forth above.
NOBLE INTERNATIONAL, LTD. XXXXXX X. XXXXXXXXXXX
/S/ Xxxxxxx X. Xxxxxxxxxx /s/ Xxxxxx X. Xxxxxxxxxxx
--------------------------------- -----------------------------
By: Xxxxxxx X. Xxxxxxxxxx
Its: Chief Financial Officer
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