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EXHIBIT 10.70
EMPLOYMENT AGREEMENT
This agreement, made as of the 20th day of May, 1997 (the effective date), by
and between Code Alarm, Inc. a Michigan corporation, (hereinafter referred to
as the "Company") and Peter Stouffer residing in Clarkston, Michigan.
(hereinafter referred to as the Executive);
WITNESSETH
WHEREAS, the Executive and the company desire to enter into an agreement
concerning the terms and conditions of the Executive's employment by the
company for a specified term.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the company and the Executive agree as follows:
1. EMPLOYMENT TERM
The company hereby employs the Executive to perform executive services for the
company as hereinafter provided and the Executive hereby accepts such
employment and agrees to render such services to the Company on terms and
conditions set forth in this agreement for an employment term commencing the
effective date of this agreement and terminating on May 31, 2001, or in
accordance with the provisions of paragraph 7 hereof, unless earlier terminated
pursuant to paragraph 6 of this agreement. If the Company does not give written
notice to the Executive prior to May 31, 1999 that his employment will not be
continued after May 31, 2001, then the term of his employment hereunder shall
be extended for an additional 12 months to May 31, 2002, and shall annually be
extended for additional consecutive 12 month period unless the Company shall
have given written notice to the Executive at least 24 months prior to the
expiration of the then current term of his employment.
2. DUTIES DURING THE EMPLOYMENT TERM
Executive's position with the Company during the Employment Term shall be as
Vice President of Manufacturing and Engineering. Executive shall have general
and active management of all of the manufacturing, engineering and purchasing
affairs for the Company and shall see that all orders of the CEO and the Board
of Directors of the Company are
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carried into effect. Executive will also fulfill such other reasonable and
proper management duties as may be assigned to him by the CEO of the Company.
During the Employment Term the Executive shall devote his best efforts,
including his full business time, to affairs of the Company. Executive shall
not, without prior written consent, engage in any other business activity
except for personal investments in a passive capacity.
3. COMPENSATION AND BENEFITS.
During the Employment Term the Executive will be paid a salary of not less than
$105,000 per year, payable in 26 installments per year. The Company will also
pay the Executive an annual incentive bonus in addition to his salary equal to
1% of the first $1M of operating income, and 2% of all additional operating
income as reported in the Company's annual report. The Company may allow the
Executive to draw up to 75% of the accrued bonus not more often than quarterly
within 45 days after the end of each quarter upon the release of the Company's
form 10Q indicating the operating income achieved cumulative through that
quarter. The Executive will also be entitled to participate in benefits and
perquisites for which he is eligible.
The Executive will also be entitled to receive a bonus based on the increase in
Company's Shareholder value. The First time only , after the effective date of
this agreement ,that the common stock price of Code Alarm, Inc. exceeds $10 and
remains at or above $10 for 30 consecutive days, and for each additional $10
incremental increase in the stock price which remains at or above that level
for 30 consecutive days, the Company will pay the Executive a bonus equal to
the annual base salary of the Executive prevailing at that time. The bonus will
be payable in 3 equal installments, the first immediately when it is earned,
the 2nd after 12 months, and the 3rd after an additional 12 months. If the
Executive shall not be employed by the Company, for any reason ,at the time
that any bonus installment is due, the remaining installments will be forfeited
by the Executive.
4. EXPENSES.
During the Employment Term, the Executive shall be entitled to reimbursement of
all reasonable expenses incurred in connection with the business of the
Company.
5. DISABILITY
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In the event of disability of the Executive, the Company may elect, by giving
written notice, to terminate the Employment Term. "Disability" shall be as
defined by the Social Security Administration.
6. TERMINATION FOR CAUSE
At any time during the Employment Term, the Company shall have the right to
terminate the Executive for cause with 10 days prior written notice. Cause
shall mean any conduct by the Executive which (I) constitutes a felony, fraud
or gross malfeasance on the part of the Executive (ii) results in a material
breach of the Executive's obligations under this agreement (iii) results in
willful neglect of the Executive's duties hereunder.
7. TERMINATION WITHOUT CAUSE.
The Employment Term of this agreement may be terminated without cause by (a)
the death of the Executive or (b) disability of the Executive as provided in
paragraph 5 hereof.
8. COMPETITION
During the Employment Term and for a period of two (2) years following the
termination of this agreement, the Executive will not , without prior written
consent from the company, engage in any business which is in direct or indirect
competition with the Company as a consultant, employee, director, partner, or
any other capacity. A breach of this commitment by the Executive shall result
in immediate termination of any and all future obligations under this agreement
by the Company.
During the Employment Term and for a period of two (2) years following the
termination of this agreement, the Executive will not, without prior written
consent from the Company, divulge to others customer lists, business methods,
samples, patterns, engineering designs, artwork, plans, inventions,
distribution or dealer information, or any other confidential information of
the Company, solicit or accept any accounts of the Company, or induce employees
of the Company to accept employment elsewhere.
Executive acknowledges and agrees that by virtue of his position with the
Company he will have intimate knowledge of the activities and affairs of the
Company, including trade secrets and other confidential information. As a
result , and also because of the unique and extraordinary services the
Executive is capable of performing for the Company, or its competitors, the
Executive recognizes that the services
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to be rendered are of a special character and have a peculiar value which
cannot be adequately compensated by damages alone. Executive therefore agrees
that if he renders services to a competitor of the Company, the Company shall
be entitled to immediate injunctive relief to restrain the Executive from
rendering his services to any competitor of the Company in addition to any
other remedies which the Company may be entitled by law.
Executive will not remove or retain, or make copies of any figures,
calculations letters, papers or information relating to business of the Company
or its affiliates. The Company shall be the sole and exclusive owner of all of
the ideas and suggestions made by the Executive to the Company during the
course of his employment, whether or not they are subject to patent or
trademark protection, and all materials which relate to the business which are
confidential.
9. BINDING AGREEMENT ; ASSIGNMENT
This agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective executors, administrators, heirs, legatees,
devisees, legal representatives, successors and assigns. Neither this agreement
nor any rights or obligations hereunder may be assigned by either party without
the written consent of the other except that the Company may assign this
agreement to any business entity succeeding to substantially all of the
business or the assets of the Company.
10. VALIDITY
In the event that any provision of this agreement is held invalid or
unenforceable, the same shall not affect in any respect whatsoever the validity
of the remainder of this agreement.
11. ENTIRE AGREEMENT ; AMENDMENT
This agreement constitutes the entire agreement between the parties and
supersedes all prior negotiations and agreements. There are no representations,
promises, terms, conditions, warranties, understandings, commitments between
the parties other than those expressly set forth herein. This agreement cannot
be modified except in writing executed by both parties.
12. WAIVER
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Neither a waiver by either party hereto of a breach or a default under any
provision of this agreement, nor the failure of either party to enforce any
provision or exercise any right remedy or privilege hereunder shall be
construed as a waiver of any such provision hereunder.
13. LIMITATIONS ON BENEFITS OF THIS AGREEMENT
It is the explicit intention of the parties hereto that no person or entity
other than the parties hereto shall be entitled to bring any action to enforce
any provision of this agreement except either party hereto and that this
agreement shall be solely for the benefit of the parties hereto.
14. NOTICES
Any notice must be in writing and delivered by first-class or certified mail to
the party's address listed below or any such new address as may be specified by
written notice.
The Company: The Executive:
Code Alarm, Inc. Peter Stouffer
950 East Whitcomb 9892 Creekwood Trail
Madison Heights, MI 48071 Davisburg, MI 48350
15. GOVERNING LAW
This agreement , the rights and obligations hereunder, and any claims or
disputes relating thereto, shall be governed by and construed under the laws of
the State of Michigan.
16. COUNTERPARTS
This agreement may be executed in two or more counterparts each of which shall
be deemed to be an original and all of which together shall constitute one and
the same agreement.
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IN WITNESS WHEREOF, the Company has caused this agreement to be duly executed
on its behalf and the Executive has duly executed this agreement as of the date
first written above.
CODE ALARM, INC. /Peter Stouffer
August 11, 1997
By:/Rand Mueller
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Its: President and CEO