1
EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of January 1,
1995 (the "Effective Date"), by and between FOJTASEK COMPANIES, INC., a Texas
corporation (the "Employer"), and LOUIS W. SIMI, JR., an individual residing in
Tarrant County, Texas (the "Employee"). In consideration of the covenants and
agreements herein contained, Employer and Employee agree as follows:
1. Term. Subject to the terms and conditions set forth in this
Agreement, including the right of Employer to terminate employment under
Section 11 for certain reasons, Employer hereby employs Employee, and Employee
hereby accepts such employment from Employer, for a period commencing on the
Effective Date, and unless earlier terminated or extended in accordance with
the provisions of this Agreement, expiring on December 31, 1997.
2. Extent of Services. During the term of this Agreement,
Employee shall devote substantially all of his business time, attention and
effort to the business of Employer in order to discharge his duties in a manner
consistent with any and all policies and guidelines as may be established by
Employer from time to time. Employee shall not, during the term of this
Agreement, be engaged in any other business or pursuit for pecuniary advantage;
provided, however, that the foregoing shall not be construed as preventing
Employee from investing personal assets in such form or manner as will not
require any significant services on Employee's part and will not violate any
provision of this Agreement.
3. Duties. Employee shall be employed for the term of this
Agreement as the Executive Vice President of Employer and General Manager of
Skotty Aluminum Products Company, a division of Employer, and in such capacity
shall perform the normal duties associated with such positions, subject to the
general direction, approval and control of the Board of Directors of Employer
(the "Board"). Employee shall perform his duties faithfully, competently, and
to the best of his ability. A substantial change in the duties of Employee
shall require the consent of Employee.
4. Cash Compensation.
(a) Salary. Subject to the other terms and
conditions of this Agreement and as compensation for the
performance of his services hereunder, Employer shall pay
Employee fixed compensation at an initial annual rate of One
Hundred Twenty-Five Thousand and No/100 Dollars ($125,000)
during the term of Employee's employment under this Agreement
(such payment is referred to herein as "Salary"). Salary shall
accrue and be payable in accordance with the payroll practices
of Employer for executives in effect from time to time during
the term hereof. All such payments shall be subject to
deduction and withholding authorized or required by applicable
law. The Salary shall be reviewed by the Board in December of
each
2
fiscal year and may be increased, at the sole discretion of
the Board, effective on the first day of the immediately
following fiscal year of Employer. Any increase in Salary
shall then become the Salary payable under this Agreement.
(b) Incentive Bonus. Subject to the other terms
and conditions of this Agreement and as further compensation
for the performance of his services hereunder, Employer shall
pay Employee an incentive bonus during the term of Employee's
employment under this Agreement (such payment is referred to
herein as the "Incentive Bonus"). The Incentive Bonus shall be
equal to Three Percent (3%) of the "Division's Pre-Tax Profit"
(as defined hereinbelow). All such payments shall be subject
to deduction and withholding authorized or required by
applicable law.
For purposes of this Agreement, "Division's Pre-Tax Profit" shall
mean, for any applicable period, the gross income of the Skotty Aluminum
Products Company Division of Employer, other than capital gains, less the
Division's expenses, deductions and credits directly attributable to such
operations, including, but not limited to a management fee of 2% of gross sales
of the Division, and management expenses reasonably allocated to such Division.
For purposes of this Agreement, the Skotty Aluminum Products Company Division
of Employer shall be deemed to include the distribution operations of Employer
of such Division's products located in Arizona and Nevada (known as
Skotty-Arizona and Champagne Industries respectively). In computing the
Division's Pre-Tax Profit, no deduction shall be taken or allowance made for:
(i) federal or state income taxes; (ii) this Incentive Bonus, or (iii) any
interest expense not directly attributable to the operations of such Division.
The Division's Pre-Tax Profit for any applicable period shall be determined in
accordance with generally accepted accounting principles by the certified
public accountants regularly engaged by Employer and their determination shall
be final and conclusive on the parties hereto.
Except as otherwise specifically provided herein,the Incentive Bonus
shall be paid to the Employee on or before the later of: (i) April 10th of the
fiscal year immediately following the one for which the calculation is made, or
(ii) ten (10) days following the receipt of the calculation of the Division's
Pre-Tax Profit for the applicable period from the certified public accountants
engaged by Employer; provided, however, that in any event the Incentive Bonus
shall be paid on or before June 1st of the fiscal year immediately following
the year for which the calculation of the Incentive Bonus is made. Payment of
the Incentive Bonus shall be accompanied by a copy of the calculation on which
the Incentive Bonus is based.
In the event that the Incentive Bonus is not paid on or before April
10th as provided in the preceding paragraph, the Employer shall prepare an
estimate of Employee's Incentive Bonus. On or before April 10th of the fiscal
year immediately following the year for which the estimate of the Incentive
Bonus is made, Employer shall pay to Employee seventy-five percent (75%) of the
Employer's estimate of the Employee's Incentive Bonus. Such payment shall be
accompanied by a
3
copy of the calculation on which the estimate of the Incentive Bonus is based.
The balance, if any, of the Incentive Bonus shall be paid as required in this
paragraph 4(b).
5. Health and Disability Insurance. Employer shall provide
Employee with such health and disability insurance as is generally made
available from time to time to Employer's executive officers. In addition, if
health coverage is available, Employer shall provide health coverage under its
plan to Gay Ellis Simi. In the event that Gay Ellis Simi does not qualify for
coverage under the health insurance plan of Employer, then Employer shall pay
to Employee, as additional compensation, the cost for coverage of Gay Ellis
Simi as if she did qualify for coverage under Employer's health plan.
6. Expenses.
(a) Reimbursement. Employer shall reimburse
Employee for all items of travel, entertainment, and
miscellaneous expense, including, but not limited to, car
telephone expense, incurred in carrying out his duties under
this Agreement. Reimbursement shall only be made against an
itemized list of such expenditures signed by the Employee in
such form as required by the Employer.
(b) Automobile. The Employer recognizes the
Employee's need for an automobile for business purposes.
Employer shall provide the Employee with an automobile,
including all related maintenance, repairs, insurance and
other costs. At Employee's request, a new automobile shall be
purchased for the Employee's use when the automobile that the
Employer is presently providing to Employee has either: (i)
been in service for three years, or (ii) exceeded 75,000
miles. Employer's cost for a new automobile for Employee shall
not exceed Twenty-Five Thousand and No/100 Dollars
($25,000.00).
(c) Payment of Certain Expenses by Employer. Employer
hereby agrees to pay certain expenses incurred by Employee
(including, but not limited to, Employee's American Express
credit card statements, country club statements, and gasoline
credit card statements) which have been approved in writing by
Employer. To the extent that Employee does not furnish an
itemized list of such expenditures (in such form as required
by Employer for reimbusement of expenses incurred in carrying
out his duties hereunder), then such amount not itemized
during any fiscal year of Employer shall be set-off against
Employee's Incentive Bonus, if any. In the event Employee does
not earn an Incentive Bonus for any applicable period in an
amount in excess of non-itemized expenditures, then such
non-itemized expenditures in excess of the Incentive Bonus
shall be treated as additional compensation of Employee.
Payments by Employer pursuant to this Section 6(c) shall not
exceed Twenty-Five Thousand and No/100 Dollars ($25,000.00)
during any fiscal year of Employer.
4
7. Key-Man Insurance. At any time during the term of this
Agreement, the Employer shall have the right to insure the life of the Employee
for the Employer's sole benefit, and to determine the amount of insurance and
the type of policy. The Employee shall cooperate with the Employer in taking
out such insurance by submitting to physical examination, by supplying all
information required by the insurance company, and by executing all necessary
documents. The Employee shall incur no financial obligation by executing any
required document, and shall have no interest in any such policy.
8. Confidentiality. Employee acknowledges that he is being
employed by Employer in a capacity in which he will receive or contribute to
information not generally known, and proprietary to Employer about Employer's
business, services and products (collectively, "Confidential Information").
Employee hereby acknowledges and agrees that all Confidential Information
concerning the business or affairs of Employer which Employee may acquire in
connection with or as a result of his association with Employer shall be and
was received in strict confidence and shall be used only for the purpose of
performing his duties pursuant to this Agreement and that no such Confidential
Information shall be otherwise used or disclosed by Employee during or after
the term of this Agreement without the prior written consent of Employer. Upon
termination of Employee's employment hereunder, all Confidential Information
and other documents, records, notebooks, customer lists, mailing lists,
business proposals, contracts, agreements and other repositories containing
information concerning Employer or the business of Employer (including all
copies thereof) in Employee's possession, whether prepared by Employee or
others, shall remain with or be returned to Employer.
9. Noncompetition. Employer and Employee acknowledge that it
would be difficult to maintain the confidentiality of Confidential Information
if Employee were to be associated with a competitor of Employer. Accordingly,
Employee covenants and agrees that, for so long as Employer pays Salary to
Employee and for a period of one year thereafter, he will not, within the
United States of America, Mexico and Canada, directly or indirectly, compete
with Employer by engaging in a business which is substantially similar to the
business of Employer. For the purposes of this Section 9, the following terms
shall have the meanings indicated below:
(a) The term "compete" shall include with respect
to the business of Employer, without limitation, engaging in
or attempting to engage in the manufacture or distribution of
windows and doors and all related products, either alone or
with any individual, partnership, corporation, cooperative or
association.
(b) The words "directly or indirectly" as they
modify the word "compete" shall mean: (i) acting as an agent,
representative, consultant, officer, director or employee of
any entity or enterprise which is competing (as defined in
this Section 9) with the business of Employer; (ii)
participating in any such competing entity or enterprise as an
owner, partner, limited partner, joint venturer, creditor or
shareholder (except as a shareholder holding less than a five
percent (5%) interest in a
5
corporation whose shares are actively traded on a regional or
national securities exchange or in the over-the-counter
market); or (iii) communicating to any such competing entity
or enterprise any competitive non-public information
concerning any past, present or identified prospective client
or customer of, or supplier to, Employer.
(c) With the objective of obtaining the
successful implementation of the foregoing restrictive
covenant, Employer and Employee agree that in the event such
restrictive covenant should fail for lack of reasonableness,
such covenant and the obligations contained therein shall be
enforced to a reasonable extent.
10. Injunctive Relief. In the event of a breach or threatened
breach by Employee of any of the provisions of Sections 8 and 9 hereof,
Employer shall be entitled to specific performance, injunctive relief or such
other legal and/or equitable remedies as may be appropriate. Nothing contained
herein shall be construed as prohibiting Employer from pursuing any other
remedies available to it for such breach or threatened breach of any of the
terms and provisions of this Agreement, nor limiting its right to the recovery
of damages from Employee or any other person or entity for the breach or
violation of any provision of this Agreement, whether such remedy be at law or
in equity. The parties hereto agree that, in the event any court issues a
temporary restraining order, preliminary, temporary or permanent injunction
pursuant to Employee's application therefore to Sections 8 or 9 hereof, a bond
of $1,000 shall be sufficient and adequate security for Employer's liability
for wrongful injunction.
11. Termination.
(a) Upon written notice, the Employer may
immediately terminate Employee's employment for Cause (as
defined hereinbelow). In such event, Employee shall be paid
only Salary pro rata to the date of such termination notice
(less all amounts required to be withheld or deducted
therefrom and all amounts owed or due by Employee to
Employer), and Employee shall forfeit all rights to the
Incentive Bonus otherwise due to him or to which he may be
entitled.
(b) In the event that Employee terminates his
employment with Employer prior to the expiration of the term
set forth in Section 1 and Employee has not breached any
provision of this Agreement, Employee shall be paid Salary as
has been earned to the date of termination, together with the
Incentive Bonus, pro-rated from the first day of Employer's
then-current fiscal year to the date of Employee's
termination, such Incentive Bonus to be paid within
one-hundred twenty (120) days following the date of Employee's
termination (less all amounts required to be withheld or
deducted therefrom and all amounts owed or due by Employee to
6
Employer). Any such termination of employment by Employee, and
the payment of Salary and Incentive Bonus pursuant to this
Section 11(b) shall be without prejudice to any rights of
Employer under this Agreement.
(c) In the event that Employer terminates
Employee other than for Cause, Employee shall continue to be
paid Salary for a period of twelve (12) months, together with
the Incentive Bonus, pro-rated from the first day of
Employer's then-current fiscal year to the date of such
termination, such Incentive Bonus to be paid within
one-hundred twenty (120) days following the date of Employee's
termination (less all amounts required to be withheld or
deducted therefrom and all amounts owed or due by Employee to
Employer), and (ii) if Employee elects to be covered under
Employer's health plan, to pay Employee's cost of such
coverage (on the same basis as prior to Employee's
termination) for a period of twelve (12) months following
Employee's termination.
(d) If Employee dies during the term hereof, this
Agreement shall terminate, and Employer shall pay to the
estate of Employee the Salary which would otherwise be payable
to Employee up to the end of the month in which his death
occurs (less all amounts required to be withheld or deducted
therefrom and all amounts owed or due by Employee to
Employer), together with the Incentive Bonus pro-rated from
the first day of Employer's then-current fiscal year to the
date of Employee's death, such Incentive bonus to be paid
within one-hundred twenty (120) days following the date of
Employee's death (less all amounts required to be withheld or
deducted therefrom and all amounts owed or due by Employee to
Employer).
(e) In the event that this Agreement or the
employment of Employee is terminated, Employee shall not be
obligated to mitigate his damages nor the amount of any
payment provided for him in this Agreement by seeking other
employment or otherwise.
(f) For the purposes of this Agreement, "Cause"
shall mean:
(i) that Employee shall have committed
an intentional material act of fraud or embezzlement
against Employer in connection with his duties or in
the course of his employment with Employer;
(ii) that Employee shall have committed
an intentional act of wrongful material damage to
property of the Employer;
(iii) that Employee shall have committed
an intentional wrongful disclosure of material
secrets possessed by, or material Confidential
Information of the Employer;
7
(iv) Employee shall intentionally fail to
perform his duties faithfully, competently, and to
the best of his ability in accordance with Section 3
hereinabove (other than due to the physical or mental
disability of Employee); or,
(v) any intentional breach of this
Agreement by Employee.
For the purposes of this Agreement, no act, or failure to act, on the
part of Employee shall be deemed "intentional" unless done, or omitted to be
done, by Employee not in good faith and without reasonable belief that his
action or omission was in the best interest of Employer.
12. Disability. Notwithstanding anything in this Agreement to the
contrary, Employer may terminate this Agreement if, during the term of the
Agreement, Employee becomes disabled. For purposes of this Agreement, Employee
shall be deemed to have become disabled if, because of ill health, physical or
mental disability, or any other reason beyond his control, Employee shall have
been unable to unwilling or shall have failed to perform his duties under this
Agreement, as determined in good faith by the Board of Directors of Employer,
for a period of one hundred twenty (120) days in any 12-month period. Until
such determination, Employee shall be entitled to receive Salary and Incentive
Bonus (if any) under this Agreement unless this Agreement is otherwise
terminated pursuant to its terms. In the event Employer terminates this
Agreement due to the disability of Employee, Employee shall be paid Salary
pro-rata to the date of such termination, together with the Incentive Bonus,
pro-rated from the first day of Employer's then-current fiscal year to the date
of such termination, such Incentive Bonus to be paid within one hundred twenty
(120) days following the date of termination (less all amounts required to be
withheld or deducted therefrom and all amounts owed or due by Employee to
Employer).
13. Change in Control. This Agreement may be assigned by the
Employer in the event of a "Change in Control" as defined hereinbelow;
provided, however, that the assignee shall assume in writing all of the
Employer's obligations under this Agreement, in which event the Employer shall
be released of all further liability and obligations hereunder. Following a
"Change in Control", if the Employee is terminated by an assignee of Employer
for any reason other than for "Cause" ,as defined hereinabove, Employee shall
be paid the following for the remaining term of this Agreement: (i) his then
current Salary, and (ii) the Incentive Bonus based on an average of the
Division's Pre-Tax Profit for the three preceding fiscal years of Employer. For
purposes of this Agreement, "Change in Control" shall mean any of the
following: (i) the sale or exchange of more than fifty percent (50%) of the
issued and outstanding voting stock of Employer to any person or entity not
related to or affiliated with the current shareholders of Employer; (ii) a sale
of substantially all of the assets of Employer to a person or entity not
related to or affiliated with the current shareholders of Employer; or, (iii)
the sale of the assets of the Skotty Aluminum Products Company division of
Employer to a person or entity not related to or affiliated with the current
shareholders of Employer.
14. Change of Location. At the commencement of this Agreement, the
Employee shall perform his duties at the offices of the Skotty Aluminum
Products Company division of Employer located
8
at 2101 East Union Bower Road, Irving, Dallas County, Texas. Any change in
place of performance of duties outside of Dallas County, Texas shall require
the consent of Employee.
15. Vacation. During the term of this Agreement, Employee shall be
entitled to an annual vacation leave of four weeks at full pay. The time for
such vacation shall be selected by the Employee and approved by the Employer,
and it must be taken in each calendar year or it is forfeited. Employee shall
not be entitled to vacation pay in lieu of vacation.
16. Severability. Subject to Section 9 hereof, in the event that
any provision contained herein shall be held to be invalid, illegal or
unenforceable for any reason, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
17. Waiver. No delay or omission by either party hereto in
exercising any right or power hereunder shall impair such right or power or be
construed as a waiver thereof. A waiver by either of the parties hereto of any
of the covenants to be performed by the other or any breach thereof shall not
be construed to be a waiver of any succeeding breach thereof or of any other
covenant herein contained. All remedies provided for in this Agreement shall be
cumulative and in addition to and not in lieu of any other remedies available
to either party at law, in equity or otherwise.
18. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof,
and there are no representations, understandings or agreements relative hereto
which are not fully expressed herein, all prior agreements with respect to the
subject matter hereof being expressly superseded hereby. No change, waiver or
discharge hereof shall be valid unless in writing and signed by the party
against which such change, waiver or discharge is sought to be enforced.
19. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas (without giving
effect to principles of conflicts of law).
20. Multiple Counterparts. This Agreement may be executed in
multiple identical counterparts, each of which shall be deemed an original, and
all of which taken together shall constitute but one and the same instrument.
In making proof of this Agreement, it shall not be necessary to produce or
account for more than one counterpart executed by the party sought to be
charged with performance hereunder.
21. Headings and Pronouns. The subject headings of the sections
contained herein are inserted for convenience only and shall not be considered
in interpreting any term or provision hereof. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular
or plural as the identity of the entities or persons referred to any require.
22. Binding Arbitration.
9
(a) Election. In the event of a contested claim
or other matter in dispute under this Agreement, either of the
parties may, by notice to the other party (a "Demand to
Arbitrate"), elect that the matter shall be settled by
arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA") by three
(3) arbitrators, which shall administer the arbitration. The
costs and expenses of any such arbitration shall be borne by
the parties as determined by the arbitrators. Any such
election to arbitrate shall be binding on all parties to this
Agreement.
(b) Arbitrators. Employer shall appoint one
arbitrator, and Employee shall appoint one arbitrator. If
either party fails to appoint an arbitrator within thirty (30)
days from the date a Demand to Arbitrate was given, AAA shall
make the appointment of the arbitrator. The two (2)
arbitrators thus appointed shall appoint the third arbitrator.
if such two (2) arbitrators fail to appoint the third
arbitrator within sixty (60) days from the date a Demand to
Arbitrate was given, AAA shall make the appointment of the
third arbitrator. Should any of the arbitrators so appointed
die, resign, refuse or become unable to act before a decision
is given, the vacancy shall be filled by the method set forth
in this sub-paragraph (b) for the original appointment. The
place of arbitration shall be Dallas, Texas.
(c) Binding Effect. The award and all decisions
of the arbitrators shall be final and binding upon the parties
and there shall be no appeal therefrom to any court except as
expressly permitted by the law of the place of arbitration.
Judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. In the event
of any conflict between the rules of the arbitral authority
and this Section 22, the provisions of this Section 22 shall
govern.
23. Survival. Employee understands and agrees that his covenants
and agreements contained in Sections 8 and 9 hereof are the essence of this
Agreement and without the agreement of Employee to such covenants, Employer
would not employ him and divulge to him its proprietary information developed
at great cost to it. The continuation of the employment of the Employee
pursuant to the terms hereof is not a condition to the survival of the
covenants and provisions contained in such sections. All obligations and duties
of Employee and, subject to the specific terms of each obligation contained
herein, all rights of Employer as set forth in said sections, shall survive the
termination or expiration of this Agreement.
24. Attorney's Fees. If any civil action, whether at law or in
equity, is necessary to enforce or interpret any of the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorney's
fees, court costs and other reasonable expenses of litigation, in addition to
any other relief to which such party may be entitled.
10
25. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered, telecopied
with telephonic confirmation (with original copy sent by first class mail,
postage prepaid, or delivered by hand, messenger or overnight courier) or on
the third day after being mailed by United States certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to Employee:
Louis W. Simi, Jr.
2901 Hickory Hill
Colleyville, Texas 76034
If to Employer:
9001 Ambassador Row
Dallas, Texas 75247
Attention: Randall Fojtasek
or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
11
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement this 17th day of March, 1995, to be effective as of the
Effective Date.
EMPLOYER:
FOJTASEK COMPANIES, INC.
By: /s/ RANDALL S. FOJTASEK
-----------------------------------------
Name: Randall S. Fojtasek
---------------------------------------
Title: President and Chief Executive Officer
EMPLOYEE:
/s/ LOUIS W. SIMI, JR.
------------------------------------
LOUIS W. SIMI, JR.