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EXHIBIT 10.20
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the 8th day of November, 1996, by and
between MICHAEL T.J. VELTRI (the "Employee"), an individual residing at 4530
River Trail, Bloomfield Hills, Michigan 48301, VELTRI HOLDINGS USA, INC. d/b/a
Veltri International (the "Holdings"), an Indiana corporation with offices
located at 900 Wilshire Drive, Suite 203, Troy, Michigan 48084, and VS
Acquisition Co. ("Buyer"), a Nova Scotia company with offices located at 900
Wilshire Drive, Suite 203, Troy, Michigan 48084 (Holdings and the Buyer are
sometimes collectively and jointly and severally referred to herein as the
"Company").
WITNESSETH:
WHEREAS, prior to the date hereof, Employee was a shareholder of and
employed as the President of Holdings, Veltri Holdings Ltd. ("VH") and North
American Precision Tool Ltd. ("NAPT");
WHEREAS, prior to the date hereof, Employee was also employed as the
President of Veltri Stamping Corporation ("VSC"), a wholly owned subsidiary of
VH (Holdings, Buyer, VSC, VH and NAPT are sometimes each referred to herein as
a "Veltri Group Member", and collectively as the "Veltri Group");
WHEREAS, contemporaneously herewith, Buyer, the Employee and certain other
parties entered in that certain Stock Purchase Agreement dated the date hereof
(the "Purchase Agreement"), pursuant to which Buyer purchased all of the
outstanding shares of capital stock of VH and NAPT, including, without
limitation, all shares owned by the Employee, and
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pursuant to which the shareholders of the Buyer purchased all of the outstanding
shares of capital stock of Holdings, including all shares owned by the
Employee;
WHEREAS, as a material inducement for the Buyer and the Employee to enter
into the Stock Purchase Agreement and in agreeing to the provisions thereof,
including, without limitation, the provisions relating to the Earn-Out Amounts
(as defined in the Purchase Agreement) and the provisions relating to the
post-closing covenants which are set forth in Section 6.1 of the Purchase
Agreement, the parties hereto agreed to enter into this Agreement, upon the
terms and conditions set forth herein;
WHEREAS, the Purchase Agreement provides for the amalgamation of the Buyer,
VSC, VH and NAPT;
NOW THEREFORE, in consideration of the premises and the mutual covenants
set forth herein, the parties hereto agree as follows:
1. Employment. The Company shall employ the Employee, and the Employee
hereby accepts such employment, upon the terms and conditions hereinafter set
forth.
2. Term. The initial term of this Agreement (the "Initial Term") shall
commence on the date hereof and shall continue for a period of five (5) years,
unless otherwise terminated in accordance with the provisions of Section 6
hereof. This Agreement shall automatically renew following the Initial Term for
successive terms of one (1) year each (each a "Renewal Term") unless either
party shall give written notice of non-renewal (a "Non-Renewal Notice") to the
other at least sixty (60) days prior to the expiration of the Initial Term or
any Renewal Term, in which case this Agreement shall terminate as of the end of
the then current term, or unless otherwise terminated in accordance with the
provisions of Section 6 hereof. The Initial
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Term and any applicable Renewal Term are collectively referred to herein as the
"Employment Period."
3. Position and Duties.
a. During the Employment Period, the Company shall employ the
Employee as the President of each Veltri Group Member, and the
Employee hereby agrees to serve in such positions. In addition, during
the Employment Period, the Employee shall also serve as a member of
the Talon Automotive Group L.L.C. ("TAG") Executive Committee (the
"Executive Committee").
b. As President of each Veltri Group Member, the Employee shall
report (as the highest level officer of each Veltri Group Member) only
to the Board of Directors of Holdings (the principal shareholder of
the Buyer) and the President and Chief Executive Officer of TAG, who
shall have all of the traditional functions, powers and authorities as
are customary for Boards of Directors, including, without limitation,
long term or strategic authority, including, without limitation, such
authority regarding establishing budgets, reviewing operating
performance, establishing financial goals, long range planning,
product lines, market expansion, significant or unbudgeted capital
expenditures, financing matters, and strategic planning matters.
Subject only to the foregoing, the Employee shall have all of the
traditional functions, powers and authorities as are customary for a
President of a group the size of the Veltri Group, including, without
limitation, all of the functions, powers and authorities as are
substantially similar to and consistent with the Employee's prior
services
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for the Veltri Group (excluding the Buyer), full authority and
responsibility over the general operations of the Veltri Group,
including, without limitation, human resource, general and
administrative, financial, operational, marketing, customer and
supplier relationship matters (including full check signing authority
subject to controls consistent with customary business practices).
All employees and sales representatives of the Veltri Group shall
report to the Employee or such persons designated by the Employee.
c. During the Employment Period, the Employee shall faithfully
perform and discharge all of his duties and shall devote his full
time, attention and best efforts to the performance of such duties and
shall not during the Employment Period be employed in any other
business activity, whether or not such activity is pursued for gain,
profit or other pecuniary advantage.
d. The Employee's primary duties are to be carried out in the
Company's offices in Troy, Michigan (or, if the operations at such
offices are moved, at such other location(s) within a thirty (30) mile
radius of Bloomfield Hills, Michigan as may be reasonably requested by
the Company in the ordinary course of business); provided, however, in
the performance of the Employee's duties as President of each Veltri
Group Member, Employee hereby acknowledges and agrees that certain of
the Employee's duties may need to be carried out from time to time at
the locations of the other facilities of the Veltri Group. The parties
further agree use their best efforts to minimize the need for
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the Employee to travel out of town for periods longer than one
(1) business day at a time during the Employment Period.
4. Compensation. In consideration for the services rendered by the
Employee hereunder, the Company shall provide the Employee with the following
compensation and benefits:
a. Salary. During the Employment Period, the Company shall pay the
Employee a salary at an initial annual rate equal to Three Hundred Eighty
Thousand ($U.S. 380,000) U.S. Dollars per year (the "Base Salary"), payable
in accordance with the normal payroll practices of the Company, which Base
Salary shall be subject to increase as determined by the Board of Directors
of the Company from time to time to maintain a competitive salary based
upon the Employee's performance.
b. Executive Bonus Program. During the Employment Period, the
Employee shall participate in the Company's Executive Bonus Program, a
summary of which is attached hereto as Exhibit A.
c. Stock Option Plan. During the Employment Period, the Employee
shall participate in the Company's Stock Option Plan, a summary of which is
attached hereto as Exhibit B.
d. Deferred Compensation Plan. During the Employment Period, the
Employee shall participate in the Company's Deferred Compensation Plan, a
summary of which is attached hereto as Exhibit C.
e. Other Benefits. In addition to the foregoing, during the
Employment Period, the Company shall provide the Employee the following
benefits:
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i. Participation by the Employee (and all of his eligible
family members) in all employee benefit plans which the Company may
from time to time provide its employees, which benefits shall be
comparable to those benefits provided to other executive employees of
the Company, TAG, and each Affiliated Company, and which benefits
shall be generally consistent with the Employee's high level executive
position and status, including, without limitation, the following:
a. medical, dental, optical and disability insurance
(substantially comparable to the Employee's existing insurance),
and life insurance, including, without, limitation, payment
during the Employment Period of the premiums payable with respect
to those specific policies described on Exhibit D attached
hereto;
b. participation in a 401(k) plan and in any pension or
profit sharing plan then in effect, including payment by the
Company of contributions to such 401(k) plan on behalf of the
Employee in a manner consistent with the past; and
c. contributions to the Canadian Pension Plan in a manner
consistent with the past to the extent provided by law;
ii. the use of a Company full size luxury automobile consistent
with the Employees' position and comparable with other executive
employees of the Company and each Affiliated Company, and
reimbursement for all maintenance,
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fuel, insurance, cellular phone and other expenses in connection
therewith in accordance with the Company's policies;
iii. six (6) weeks paid vacation each year (one of which shall be
taken between Christmas and New Year's day), provided, however, for
any calendar year during the Employment Period, the Employee shall be
entitled to carry over up to a maximum of two (2) weeks of unused
vacation into the first six (6) months of the following calendar year,
provided, further, that if such two (2) weeks are not used during such
six (6) month period, then such two (2) weeks shall be forfeited;
iv. an office of a size and with furnishings and attendants
(including an exclusive personal secretary) equal to those currently
and traditionally provided to the Employee by the Veltri Group
(excluding Buyer);
v. a personal computer, facsimile, scanning and copying
machines, and such other office equipment and supplies (including
reimbursement for business related telephone lines and expenses) as
the Employee reasonably deems appropriate to maintain an office in his
personal residence;
vi. reimbursement for all monthly membership dues and fees, and
all Company business related expenses, incurred by the Employee in
connection with the Employee's membership at up to two country clubs
selected by Employee, provided, however, that the aggregate monthly
membership dues and fees for such clubs shall not exceed those
currently charged by Indianwood and Pointe West Country Clubs. Upon
termination of this Agreement, and subject to any
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requirements of Pointe West Country Club, the Employee may purchase
the membership in Pointe West Country Club from the Company for a
price equal to its then current equity value; and
vii. those additional benefits set forth on Exhibit D attached
hereto.
f. Expenses. In addition, the Company shall reimburse the Employee
for any travel, business entertainment and out-of-pocket expenses
reasonably incurred by the Employee for the purpose of performing his
duties hereunder, such reimbursement to be made promptly following
presentation to and approval by the Company of receipts, vouchers and other
evidence satisfactory in itemizing such expenses in reasonable detail in
accordance with the Company's regular practice.
g. Withholding. Any compensation payable pursuant to the terms of
this Agreement shall be subject to all applicable statutory withholding
requirements.
h. Indemnity. The Company shall indemnify, defend and hold the
Employee harmless to the fullest extent provided by law from and against
all losses, damages, costs and expenses (including, without limitation,
reasonable attorneys fees and litigations expenses) arising out of any
claims by any third party against the Employee by reason of the fact that
the Employee is or was an officer of the Company from and after the date
hereof, provided, however, that such actions (i) were not in violation of
any of the terms of this Agreement, (ii) were taken in good faith and in a
manner the Employee reasonably believed to be in and not opposed to the
best interests of the Company and its shareholders, (iii) did not involve
any intentional misconduct or knowing violation of law, (iv) did not result
in any improper personal benefit to the Employee, and (v) did not
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result in any breach of any duty of loyalty, care or otherwise of the
Employee to the Company and its shareholders; provided, further, however,
with respect to any criminal action or proceeding, the Employee had no
reasonable cause to believe that his conduct was unlawful.
5. Designation of Beneficiary. The Employee shall file with the Secretary
of the Company a written notice designating one (1) or more beneficiaries to
whom payments otherwise due him shall be made in the event of his death while in
the employment of the Company, or after termination thereof at a time when any
amount is still payable to him. The Employee shall have the right to change the
beneficiary or beneficiaries from time to time (without the consent of any prior
beneficiary); provided, however, that any change shall not become effective
unless in writing and upon receipt by the Secretary of the Company. If no such
beneficiary shall have been designated, or if no designated beneficiary shall
survive the Employee, then all amounts payable hereunder shall be paid to the
Employee's estate.
6. Termination of Employment. Subject to the provisions of Section 20
hereof, the Employee's employment and this Agreement shall terminate only upon
the occurrence of one or more of the following:
a. This Agreement and the Employee's employment hereunder may be
terminated at any time during the Employment Period by the Company for Just
Cause (as hereinafter defined) immediately upon the Company giving the
Employee written notice of such termination specifying the basis therefor.
For purposes hereof, "Just Cause" shall mean only one or more of the
following events:
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i. the Employee's conviction of or plea of guilty or nolo
contendere to a felony crime consisting of intentional conduct which
is, directly or indirectly, materially injurious to the Veltri Group;
ii. Employee's intentional embezzlement or theft from any Veltri
Group Member which is materially injurious to such Veltri Group
Member;
iii. Employee's intentional fraud against any Veltri Group Member
which is materially injurious to such Veltri Group Member;
iv. Employee's breach of the provisions of Sections 9, 10 or 11
hereof, which is not cured within thirty (30) days following written
notice thereof to the Employee;
v. Employee's failure to report to work and perform his duties
hereunder for a period of fifty (50) business days or more during any
six (6) month period during the Employment Period (other than as a
result of any permitted vacation, or any mental or physical illness or
disability documented in writing by the Employee's physician); or
vi. Employee's intentional and malicious engagement in any
severe gross misconduct which is materially injurious to the Veltri
Group, which is not cured within thirty (30) days following written
notice thereof to the Employee;
b. The Employee death, in which event, this Agreement and the
Employee's employment hereunder shall be deemed to cease on the date of his
death.
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c. The Employee's Total Disability (as hereinafter defined), in
which event this Agreement and the Employee's employment hereunder may be
terminated immediately upon the Company giving written notice to such
effect to the Employee.
d. The Company's receipt of written notice of termination from the
Employee (for any reason or no reason whatsoever), in which event this
Agreement and the Employee's employment hereunder shall be terminated
effective sixty (60) days following the Company's receipt of such notice.
e. The Company or the Employee provides the other a Non-Renewal
Notice in accordance with the provisions of Section 2 hereof, in which case
this Agreement shall terminate as of the end of the then current term.
f. In the event of a Default Termination (as hereinafter defined)
and the Employee provides written notice of termination to the Company.
7. Obligations Upon Termination.
Notwithstanding anything contained herein to the contrary, in the event
that:
a. the Employee's employment with the Company is terminated by the
Employee pursuant to Section 6(d), Section 6(e) hereof or otherwise
voluntarily terminated by the Employee (excluding a Default Termination),
or in the event the Employee's employment is terminated as a result of the
Employee's death or Total Disability, then:
i. all rights of the Employee to any amounts due hereunder
shall terminate upon the effective date of such termination, including
without limitation, any right to any subsequent payments pursuant to
Sections 4(a), 4(b),
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4(c) or 4(d) hereof, except as otherwise specifically provided to the
contrary in the plans referred to under Sections 4(b), 4(c) or 4(d)
hereof, and except for any amounts accrued through the date of
termination, any accrued rights under any of the benefit plans under
Section 4(e)(i) hereof and any rights of indemnity under Section 4(h)
hereof; and
ii. the "Restrictive Period" for purposes hereof shall mean the
Employment Period and the eighteen (18) month period following the
effective date of the Employee's employment termination;
b. the Employee's employment with the Company is terminated by the
Company for Just Cause pursuant to Section 6(a) hereof, then:
i. the Employee shall not be entitled to and shall forfeit all
rights to any subsequent payments by the Company under this Agreement
of any nature whatsoever from and after the date of such termination,
including without limitation, any right to any subsequent payments
pursuant to Sections 4(a), 4(b), 4(c) or 4(d) hereof, except as
otherwise specifically provided to the contrary in the plans referred
to under Sections 4(b), 4(c) or 4(d) hereof, and except for any
amounts accrued through the date of termination, any accrued rights
under any of the benefit plans under Section 4(e)(i) hereof and any
rights of indemnity under Section 4(h) hereof; and
ii. the "Restrictive Period" for purposes hereof shall mean the
Employment Period and the eighteen (18) month period following the
effective date of the Employee's employment termination;
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c. the Employee's employment with the Company is terminated by the
Company pursuant to Section 6(e) hereof, then:
i. the Employee shall (a) be entitled to continue to receive
his Base Salary (less all applicable federal, provincial, state and
local taxes) in the same manner as prior to such termination for a
period of twelve (12) months following the effective date of such
employment termination, and (b) be reimbursed by the Company for a
period not to exceed twelve (12) months following such termination for
the premiums for continuation coverage if the Employee elects to
continue his medical, dental and vision insurance under COBRA, all as
severance pay and in full satisfaction of any and all claims against
the Company and the Veltri Group arising out of this Agreement or in
connection with the Employee's employment, except as otherwise
specifically provided to the contrary in the plans referred to under
Sections 4(b), 4(c) or 4(d) hereof, and except for any payments which
may be due pursuant to this Section 7(c)(i), any amounts accrued
through the date of termination, any accrued rights under any of the
benefit plans under Section 4(e)(i) hereof, any rights of indemnity
under Section 4(h) hereof, and any obligations of the Company or any
Affiliated Company to Employee arising under the Purchase Agreement;
provided, however, any amounts due under this Section 7(c)(i) shall be
contingent upon the Employee's compliance with the provisions of
Sections 9, 10 and 11 hereof and the execution by the Employee of a
release reasonably satisfactory to the Company of any and all claims
against the Veltri Group arising out of this Agreement or in
connection with the Employee's
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employment, except as otherwise specifically provided to the contrary
in the plans referred to under Sections 4(b), 4(c) or 4(d) hereof, and
except for any payments which may be due pursuant to this Section
7(c)(i), any amounts accrued through the date of termination, any
accrued rights under any of the benefit plans under Section 4(e)(i)
hereof, any rights of indemnity under Section 4(h) hereof, and any
obligations of the Company or any Affiliated Company to Employee
arising under the Purchase Agreement; provided, further, however, any
amounts due to the Employee pursuant to this Section 7(c) shall not be
subject to any duty or obligation on behalf of the Employee to
mitigate any such amounts due to him pursuant to this Section 7(c),
and the Company hereby irrevocably waives any claim, defense or right,
in law or in equity, to require the Employee to mitigate any amounts
due to Employee pursuant to this Section 7(c); and
ii. the "Restrictive Period" for purposes hereof shall mean the
Employment Period and the twelve (12) month period following the
effective date of the Employee's employment termination;
d. the Employee's employment with the Company is terminated by the
Company (other than a termination for Just Cause or a termination pursuant
to Sections 6(b), 6(c) or 6(e) hereof), or in the event that the Employee's
employment is terminated by the Employee pursuant to a Default Termination
(as hereinafter defined), then:
i. the Employee shall (a) be entitled to continue to receive
his Base Salary (less all applicable federal, provincial, state and
local taxes) in the same manner as prior to such termination for the
longer of eighteen (18) months
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following the effective date of such employment termination or the
remainder of the Initial Term (on the basis that the Initial Term was
not terminated), and (b) be reimbursed by the Company for a period not
to exceed eighteen (18) months following the effective date of such
employment termination for the premiums for continuation coverage if
the Employee elects to continue his medical, dental and vision
insurance under COBRA, all as severance pay and in full satisfaction
of any and all claims against the Company and the Veltri Group arising
out of this Agreement or in connection with the Employee's
employment, except as otherwise specifically provided to the contrary
in the plans referred to under Sections 4(b), 4(c) or 4(d) hereof, and
except for any payments which may be due pursuant to this Section
7(d)(i), any amounts accrued through the date of termination, any
accrued rights under any of the benefit plans under Section 4(e)(i)
hereof, any rights of indemnity under Section 4(h) hereof, and any
obligations of the Company or any Affiliated Company to Employee
arising under the Purchase Agreement; provided, however, any amounts
due under this Section 7(d)(i) shall be contingent upon the Employee's
compliance with the provisions of Sections 9, 10 and 11 hereof and
the execution by the Employee of a release reasonably satisfactory to
the Company of any and all claims against the Veltri Group arising out
of this Agreement or in connection with the Employee's employment,
except as otherwise specifically provided to the contrary in the plans
referred to under Sections 4(b), 4(c) or 4(d) hereof, and except for
any payments which may be due pursuant to this Section 7(d)(i), any
amounts accrued through
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the date of termination, any accrued rights under any of the benefit
plans under Section 4(e)(i) hereof, any rights of indemnity under
Section 4(h) hereof, and any obligations of the Company or any
Affiliated Company to Employee arising under the Purchase Agreement;
provided, further, however, any amounts due to the Employee pursuant
to this Section 7(d) shall not be subject to any duty or obligation on
behalf of the Employee to mitigate any such amounts due to him
pursuant to this Section 7(d), and the Company hereby irrevocably
waives any claim, defense or right, in law or in equity, to require
the Employee to mitigate any amounts due to Employee pursuant to this
Section 7(d); and
ii. the "Restrictive Period" for purposes hereof shall mean the
Employment Period and the longer of (a) the eighteen (18) month period
following the effective date of such employment termination, or (b)
the remainder of the Initial Term (on the basis that the Initial Term
was not terminated).
8. Definitions. For purposes hereof, the following terms shall have the
following meanings:
a. "Affiliated Company" shall mean Hawthorne Metal Products Co.,
G & L Industries, Inc., J & R Manufacturing, Inc., Talon Automotive Group
L.L.C. and any other entity in the automotive industry fifty (50%) percent
or more of which is owned, directly or indirectly, by the Company or the
shareholders owning, directly or indirectly, fifty (50%) percent or more of
the Company.
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b. "Default Termination" shall mean a termination of this Agreement
and the Employee's employment with the Company only as a result of one or
more of the following:
i. Any material breach by the Company of any of the terms and
conditions of this Agreement which is not cured within thirty (30)
days following written notice thereof to the Company; or
ii. Any material breach by the Veltri Group of any of the
provisions of Sections 1.3(b)(viii) or 6.1 of the Purchase Agreement
which is not cured within thirty (30) days following written notice
thereof to the Company.
c. "Total Disability" means any physical or mental impairment which
has prevented the Employee for a period of at least six (6) months from
performing duties as an employee of the Company in a position of
responsibility commensurate with his position at such time and, in the
written opinion of a physician mutually appointed by the Employee and the
Board of Directors of the Company, will prevent the Employee for an
additional period of at least six (6) months from performing duties as an
employee of the Company in a position of responsibility commensurate with
his position at such time.
9. Covenant Not to Compete.
a. The Employee hereby acknowledges and recognizes the highly
competitive nature of the businesses of the Company and accordingly agrees
for the consideration stated above that, during the Employment Period and
thereafter for the Restrictive Period (as defined herein), he will not
directly or indirectly (except as a passive investor in less
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than three (3%) percent of the outstanding capital stock of a publicly
traded corporation or in his capacity as an employee of the Company):
i. conduct, engage in, have an interest in, or aid or assist
any person or entity in conducting, engaging or having an interest in
(whether as an owner, principal, lender, stockholder, partner,
employer, employee, consultant, officer, director or otherwise)
anywhere within the Territory (as hereinafter defined):
a) any business or enterprise (whether or not for profit)
which offers or performs any automotive stamping or metal forming
services which are the same as or similar to or competitive with
those now or hereafter provided by any Veltri Group Member; or
b) any business or enterprise (whether or not for profit)
which develops, manufactures or sells any automotive parts or
products which are the same as or in any manner similar to or
competitive with those developed, manufactured or sold by any
Veltri Group Member; or
c) any other business or enterprise (whether or not for
profit) which is competitive with the business of any Veltri
Group Member;
ii. Solicit, divert, take away, interfere with or accept any
business competitive with the business of the Company or any
Affiliated Company from any customers, suppliers, trade or patronage
of the Company or any Affiliated Company; or
iii. Engage, employ, attempt to engage or employ or solicit for
engagement or employment any employee or sales representative of any
Veltri
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Group Member or any Affiliated Company, or induce or otherwise advise
any employee or sales representative to leave the employ or engagement
of any Veltri Group Member or any Affiliated Company or to engage in
any of the activities prohibited hereby.
b. For purposes hereof, the "Territory" shall mean and include all
of the following:
i. United States of America, Canada and Mexico;
ii. United States of America and Canada;
iii. Canada; and
iv. Province of Ontario.
c. It is expressly understood and agreed that although the Employee
and the Company consider the provisions hereof, including the restrictions
as to Territory set forth in Sections 9(b)(i), (ii), (iii) and (iv), to be
reasonable for the purpose of preserving for the Company and each
Affiliated Company, their businesses and goodwill and other proprietary
rights, the restrictions as to Territory set forth in Sections 9(b)(i),
(ii), (iii) and (iv) are each separate and distinct covenants, severable
one from the other and, if any of such covenants are determined to be
invalid or unenforceable, such invalidity or unenforceability shall attach
only to the covenant or covenants to the extent of such invalidity as
determined and all other covenants shall continue in full force and
effect. The Employee and the Company further agree that a court or other
tribunal having jurisdiction may, if it determines any covenant contained
in Sections 9(b)(i), (ii), (iii) or (iv) hereof to be invalid, modify such
covenant to reduce its scope so that it is effective
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to the extent enforceable under the applicable law. Notwithstanding
anything contained herein to the contrary, the obligations of the Company
under Section 7 of this Agreement are contingent upon the Employee's
compliance with all of the terms and conditions of this Section 9, and the
obligations of the Employee under this Section 9 are contingent upon the
Company's compliance with all of the terms and conditions of Section 7 of
this Agreement. In the event that the Company shall fail to make any
required payments due under Section 7 hereof, and such failure shall
continue for a period of ten (10) days following written notice thereof to
the Company, then, notwithstanding anything to the contrary in this
Agreement, in such event the Restrictive Period shall be deemed terminated
immediately and the Employee shall have no further obligations under this
Section 9 from and after such date.
10. Disclosure of Information. The Employee acknowledges that the trade
secrets, private or secret processes of the Company and each Affiliated Company
which may exist from time to time and confidential information concerning their
products, development, technical information, procurement and sales activities
and procedures, promotion and pricing techniques and credit and financial data
concerning customers are valuable, special and unique assets, access to and
knowledge of which are essential to the performance of the Employee's duties
hereunder. In view of the highly competitive nature of the industries in which
the business of the Company and each Affiliated Company is conducted, the
Employee further agrees that all knowledge and information described in the
preceding sentence not in the public domain and heretofore or in the future
obtained by the Employee as a result of his employment by the Company shall be
considered confidential information. In recognition of this fact, Employee
agrees that he will
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not, during or after the Employment Period, disclose any of such secrets,
processes or information not in the public domain to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever,
except as necessary in the performance of his duties as an employee of the
Company (and, in such connection, if requested by the Company, the Employee
shall obtain a written confidentiality agreement in such form and content as
reasonably requested by the Company), nor shall the Employee make use of any
such secrets, processes or information (other than information in the public
domain) for his own purposes or for the benefit of any person, firm, corporation
or other entity (except the Company) under any circumstances during or after the
Employment Period. Upon termination of this Agreement for any reason, the
Employee shall promptly return to the Company all records and other property of
the Company in the Employee's possession or under the Employee's control.
Subject to the foregoing sentence, following the Restrictive Period, the
Employee shall be entitled to make use of and disclose any non-proprietary
information in his possession.
11. Company Right to Inventions. The Employee shall promptly disclose,
grant and assign to the Company for its sole use and benefit any and all
inventions, improvements, technical information and suggestions relating in any
way to the products or services sold or under development from time to time by
the Company or any Affiliated Company which the Employee may conceive, develop
or acquire during the Employment Period (whether or not during usual working
hours), together with all patent applications, patents, letters patent,
copyrights and reissues thereof that may at any time be granted for or upon any
such invention, improvement or technical information. In connection therewith,
the Employee shall promptly at all times during and after the Employment Period:
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a. Execute and deliver such applications, assignments, descriptions
and other instruments as may be necessary or proper in the operation of the
Company to vest title to such inventions, improvements, technical
information, patent applications and patents or reissues thereof in the
Company and to enable the Company to obtain and maintain the entire right
and title thereto throughout the world.
b. Render to the Company at its expense all such assistance as it
may require in the prosecution of applications for said patents or reissues
thereof, in the prosecution or defense of interferences which may be
declared involving any said application or patents, and in any litigation
in which the Company may be involved relating to any such patents,
inventions, improvements or technical information.
12. Remedies. In the event of a breach or threatened breach by the
Employee of the provisions of Sections 9, 10 or 11 hereof, the Employee
acknowledges that the remedy at law would be inadequate and that the Company
shall be entitled to an injunction restraining him from such breach in addition
to monetary damages and any other remedy provided by law. Nothing contained
herein shall be construed as prohibiting the Company from pursuing any other
remedies available to it for any such breach or threatened breach.
13. Notices. Any notice required or permitted to be provided under this
Agreement shall be deemed properly furnished if in writing and if mailed by
registered or certified mail, postage prepaid with return receipt requested, to
the Employee at his residence (with a copy to George Christopoulos, Esq., Kerr,
Russell and Weber, P.L.C., One Detroit Center, Suite 2500, 500 Woodward Ave.,
Detroit, Michigan 48226) and to the Company at its offices at 900
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Wilshire Drive, Suite 203, Troy, Michigan 48084, to the attention of its
Chairman of the Board (with a copy to Timmis & Inman L.L.P., 300 Talon Centre,
Detroit Michigan 48207).
14. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach.
15. Assignment. This Agreement shall not be assignable by either party
without the prior written consent of the other.
16. Entire Agreement. This instrument contains the entire agreement of the
parties relating to the subject matter hereof and may not be waived, changed,
modified, extended or discharged orally but only by agreement in writing,
consented to in writing by the Chairman of the Board of the Company, and signed
by the party against whom enforcement of any such waiver, change, modification,
extension or discharge is sought.
17. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan.
18. Headings. The headings of any of the Sections hereof 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.
19. Indemnity. The Company and the Employee hereby agree to indemnify,
defend and hold each other harmless from and against all losses, damages, costs
and expenses (including, without limitation, reasonable attorneys fees and
litigation expenses) arising out of any breach or default by the other of any of
the terms and conditions of this Agreement.
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20. Survival. The terms and provisions of Sections 4(h), 7, 9, 10, 11, 12
and 19 hereof shall survive any termination of this Agreement in accordance with
their respective terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
VELTRI HOLDINGS USA, INC.
By: [SIG] /s/ Michael Veltri
--------------------------- ------------------------------
Michael Veltri
VS ACQUISITION CO.
By: [SIG]
---------------------------
GUARANTY
The undersigned, jointly and severally, hereby absolutely and
unconditionally guarantee the prompt payment when due of any amounts due to the
Employee pursuant to the above Employment Agreement, and the prompt performance
of all obligations of the Company under this Agreement, which guaranty shall
survive the termination of such Employment Agreement.
VELTRI HOLDINGS, LTD. VELTRI STAMPING CORP.
By: [SIG] By: [SIG]
--------------------------- ---------------------------
NORTH AMERICAN PRECISION
TOOL, LTD.
By: [SIG]
---------------------------
24.