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EXHIBIT 10.(W)
EMPLOYMENT AGREEMENT
This employment agreement is made and entered into as of the 11th day
of March, 1999 by and between Rankin Automotive Group, Inc. (the "Employer"), a
Louisiana corporation, and Otis A. Cannon Jr., a resident of the State of
Louisiana (the "Employee").
WITNESSETH:
1. Employment. The Employer hereby employs the Employee, and the Employee
hereby accepts such employment, upon the terms and subject to the conditions
set forth in this Agreement.
2. Term. Subject to the provisions of termination as hereinafter provided, the
term of employment under this Agreement shall be for an initial five-year term
beginning the day after all closing documents required for Employer's pending
purchase of certain assets of Automotive & Industrial Supply, Inc. and
terminating five years from such date, unless employment is terminated as
otherwise provided in this Agreement.
3. Compensation, Reimbursement, Etc.
(a) The basic compensation to the Employee shall be payable in
accordance with company policy, not less than monthly, based
upon calendar year annual compensation of one hundred, twenty
thousand dollars ($120,000.00).
(b) The compensation provided for in Section 3 (a) above shall be
in addition to any pension or profit sharing payments set
aside or allocated for the benefit of the Employee.
(c) The Employee will be provided benefits comparable to those of
similarly situated employees of Employer, including, but not
limited to health, life, dental or disability insurance as
well as such other benefits as may be provided from time to
time by the Employer to other management employees.
(d) The Employer will provide to Employee during the term of this
Agreement in accordance with company policy an automobile
suitable to employee's position with the Company. Initially,
the Company will provide employee with a 1998 Toyota Four
Runner.
4. Duties.
(a) The Employee shall have such duties as may from time to time
be reasonably assigned to him by the Board of Directors of
the Employer or the chief executive officer of the Employer.
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(b) The principal services for which the Employee is engaged are
to manage the business of the Employer according to the
direction of the Board of Directors or the chief executive
officer of the Employer.
5. Extent of Service. During the term of his employment under this Agreement,
the Employee shall devote such time and efforts to the business of the
Employer, as may be reasonably necessary in the normal course of business.
6. Death or Retirement. All rights of the Employee hereunder shall terminate
upon his death or retirement except that the Employer shall pay to the estate
of the Employee or to the Employee such compensation as would otherwise have
been payable to the Employee up to the end of the month in which his death or
retirement occurs and further, Employer shall continue to be liable for any
benefits payable upon Employee's death.
7. Other Terminations.
(a) (I) Either the Employee or the Employer may
terminate the employment of the Employee hereunder
upon written notice given ninety (90) days prior to
the end of the term provided for in Section 2 of
this agreement or any extension thereof;
(II) If the Employee gives notice pursuant to Section
7(a)(I) above, the Employer shall have the right to
relieve the Employee, in whole or in part, of his
duties under this Agreement, subject to paying
Employee compensation due for the remaining ninety
(90) days.
(b) (I) The Employer may terminate the employment of the
Employee hereunder without notice: (A) upon the
Employee's breach of any provision of this
Agreement; or (B) for other good cause (as defined
below).
(II) The term "good cause" as used in this Agreement shall
include, but shall not necessarily be limited to,
habitual absenteeism, a pattern of conduct which
tends to hold the Employer up to ridicule in the
community, conduct disloyal to the Employer,
conviction of any felony crime or conviction of any
crime involving moral turpitude or substance
dependence, as determined by the Board of Directors
of the Employer, on any addictive substance,
including but not limited to alcohol, amphetamines,
barbiturates, methadone, cannabis, cocaine, PCP, THC,
LSD or illegal or narcotic drugs. If any
determination of substance dependence by the Board of
Directors is disputed by the Employee, the parties
hereto agree to abide by the decision of a panel of
three physicians, one of which shall be selected by
the Employer, one of which shall be selected by the
Employee and a third selected by the other two
doctors. The Employee agrees to make himself
available for and submit to examinations by such
physicians as may be directed by the Employer.
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Failure to submit to any such examination shall
constitute a breach of a material part of this
Agreement.
(c) If the employment of the Employee is terminated pursuant to
this Section 7(b)(I), the Employer shall pay to the Employee
any compensation earned but not paid to the Employee prior to
such termination. Such payment shall be in full and complete
discharge of any and all liabilities or obligations of the
Employer hereunder, and the Employee shall be entitled to no
further benefits under this Agreement except such benefits as
are customarily available to other terminated employees
similarly situated.
(d) Employee may terminate this Agreement without notice upon
Employer's breach of any provision of this Agreement, and
Employee shall be entitled to one (1) year of compensation
and benefits provided for in this agreement or all remaining
compensation and benefits provided for in this agreement,
whichever is less.
8. Confidentiality . The Employee agrees to keep in strict secrecy and
confidence any and all information the Employee assimilates or to which he has
access during his employment by the Employer and which has not been publicly
disclosed and is not a matter of common knowledge in the fields of work of the
Employer. The Employee agrees that both during and after the term of this
employment by the Employer, he will not, without prior written consent of the
Employer, disclose any such confidential information to any third person,
partnership, joint venture, company, corporation or other organization.
9. Non-Competition and Non-Solicitation.
(a) During the term of this Agreement, except as contemplated
herein, and for a period of two (2) years after the
termination of his employment with the Employer, regardless
of the reason for such termination, the Employee shall not,
directly or indirectly, within the State of Louisiana, the
State of Texas, or within any other state or foreign country
in which the Employer conducts any business, enter into,
engage in, be employed by, or consult with any business in
competition with the business of the Employer as it is then
carried on; further, the Employee shall not sell to, market,
produce or otherwise deal with any customer of the Employer
as long as these actions are in direct competition with the
Employer. The restrictions of this Section 9 shall extend to
any and all activities of the Employee, whether as an
independent contractor, partner or joint venturer, or as an
officer, director, stockholder, agent, employee or salesman
for any person, firm, partnership, corporation or other
entity, or otherwise. The restrictions of this Section 9
shall not be violated by the ownership of no more than 2% of
the outstanding securities of any company whose stock is
traded on a national securities exchange or is quoted in the
Automated Quotation System of the National Association of
Securities Dealers (NASDAQ). Solicitation or acceptance of
orders outside of any prohibited territory as described above
for
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shipment to, delivery in or service in any restricted
territory shall also constitute engaging in business within
the restricted territories in violation of this Section 9 .
(b) During his employment with the Employer, except as
contemplated herein, and for a period of two (2) years after
the termination of his employment with the Employer,
regardless of the reason for such termination, the Employee
agrees he will refrain from and will not directly or
indirectly, as independent contractor, employee, consultant,
agent, partner, joint venturer, or otherwise: (1) solicit any
of the employees of the Employer to terminate their
employment or (2) accept employment with or seek remuneration
by any of the clients or customers of the Employer with whom
the Employer did business during the term of the Employee's
employment.
(c) The period of time during which the Employee is prohibited
from engaging in certain business practices pursuant to
Section 9(a) or (b) shall be extended by any length of time
during which the Employee is in breach of such covenants.
(d) It is understood by and between the parties hereto that the
foregoing restrictive covenants set forth in Sections 9(a)
through (c) are essential elements of this Agreement, and
that, but for the agreement of the Employee to comply with
such covenants, the Employer would not have agreed to enter
into this Agreement. Such covenants by the Employee shall be
construed as agreements independent of any other provision in
this Agreement. The existence of any claim or cause of action
of the Employee against the Employer, whether predicated on
this Agreement, or otherwise, save and except a failure of
Employer to pay sums due under the terms of this agreement,
shall not constitute a defense to the enforcement by the
Employer of such covenants.
(e) It is agreed by the Employer and Employee that if any portion
of the covenants set forth in this Section 9 are held to be
invalid, unreasonable, arbitrary or against public policy,
then such portion of such covenants shall be considered
divisible both as to time and geographical area. The Employer
and Employee agree that, if any court of competent
jurisdiction determines the specified time period or the
specified geographical area applicable to this Section 9 to
be invalid, unreasonable, arbitrary or against public policy,
a lesser time period or geographical area which is determined
to be reasonable, nonarbitrary and not against public policy
may be enforced against the Employee. The Employer and the
Employee agree that the foregoing covenants are appropriate
and reasonable when considered in light of the nature and
extent of the business conducted by the Employer.
10. Specific Performance. The Employee agrees that damages at law will be an
insufficient remedy to the Employer if the Employee violates the terms of
Sections 7, 8, or 9 of this Agreement and that the Employer would suffer
irreparable damage as a result of such
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violation. Likewise, The Employer also agrees that damages at law will be
insufficient remedy to the Employee if the Employer violates the terms of
Sections 7, 8, or 9 of this Agreement and that the Employee would suffer
irreparable damages as a result of such violation. Accordingly, it is agreed
that the Employer and Employee shall be entitled, upon application to a court
of competent jurisdiction to obtain injunctive relief to enforce the provisions
of such Sections, which injunctive relief shall be in addition to any other
rights or remedies available to either parties. Employer. If it is determined
that such violation has occurred, the Employee agrees to pay to the Employer
all costs and expenses incurred by the Employer relating to the enforcement of
the terms of Sections 7, 8, or 9 of this Agreement, including reasonable fees
and disbursements of counsel (both at trial and in appellate proceedings) if
the Employee is found to be at fault. If it is determined that such violation
has occurred and the Employer is at fault, the Employer agrees to pay to the
Employee all costs and expenses incurred by the Employee relating to the
enforcement of the terms of Sections 7, 8, or 9 of this Agreement, including
reasonable fees and disbursements of counsel (both at trial and in appellate
proceedings).
11. Compliance with other Agreements. The Employee and Employer represent and
warrant that the execution of this Agreement and performance of the obligations
hereunder will not conflict with, result in the breach of any provisions of or
the termination of or constitute a default under any Agreement to which the
Employee and Employer are a party to or by which the Employee or Employer are
or may be bound.
12. Waiver or Breach. The waiver by the Employer of a breach of any of the
provisions of this Agreement by the Employee shall not be construed as a waiver
of any subsequent breach by the Employee.
13. Binding Effect; Assignment. The rights and obligations of the Employer
under this Agreement shall inure to the benefit of and shall be binding upon
the successors and assigns of the Employer only with the written permission of
the Employee. This Agreement is a personal employment contract and the rights,
obligations and interests of the Employee hereunder may not be sold, assigned,
transferred, pledged or hypothecated without the written permission of the
Employee.
14. Entire Agreement. This Agreement contains the entire agreement and
supersedes all prior agreements and understandings, oral or written, with
respect to the subject matter hereof. This Agreement may be changed only by an
agreement in writing signed by the party against whom any waiver, change,
amendment, modification or discharge is sought.
15. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
16. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of Louisiana.
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17. Incentives. As an incentive to get this officer to stay with the company at
an executive level, Employer will do the following upon execution of this
Agreement:
(a) Grant the Employee irrevocable stock options on shares with a
total value of two hundred thousand dollars ($200,000.00),
valued at the price of Employer's stock as of the day of the
signing of the definitive asset purchase agreement, said
options to vest as follows: if the Employee remains employed
by Employer, on the first anniversary after closing an option
on shares having a total value of one hundred thousand
dollars ($100,000.00), and, if the employee remains employed
by Employer on the second anniversary date after closing an
option on shares having a total value of one hundred thousand
dollars ($100,000.00). Employee or his Estate shall have five
(5) years from each vesting date to exercise the respective
option. Prior to the exercise of these options, the options
will be automatically deemed adjusted upon the occurrence of
any stock split, stock dividend or recapitalization, in
direct proportion to such stock split, stock dividend or
recapitalization, so that the option will retain the value
originally intended by the parties. For example, if the stock
shall split two for one, Employee's options will double and
the option price will be cut in half.
18. Notices. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if sent by certified or registered mail,
first class, return receipt requested, to the parties at the following
addresses:
To the Employer: Rankin Automotive Group, Inc.
3709 S. MacArthur Drive
Alexandria, LA 71302
Attention: Randall B. Rankin
Facsimile No. 318-443-9952
With a copy Ricky L. Sooter
(which shall not Daniels & Sooter, L.L.C.
constitute notice) to: 3600 Jackson Street, Suite 106
Alexandria, LA 71306
Facsimile No. 318-448-8528
With a copy Michael Glass, Esq.
(which shall not 1735 White Street
constitute notice) to: Alexandria, Louisiana 71301
Facsimile No. 318-473-4062
If to Employee: Otis A. Cannon Jr.
725 Bert Kouns
Shreveport, LA 71118
Facsimile No. 318-683-1235
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With a copy Glenn L. Langley, Esq.
(which shall not Cook, Yancey, King & Galloway
constitute notice) to: 333 Texas Street, Suite 1700
Shreveport, LA 71220
Facsimile No. 318-227-7850
or to such other address as any party hereto may, from time to time, designate
in writing delivered pursuant to the terms of this Section.
In witness whereof the parties hereto have executed this
Agreement as of the year and date set forth above.
EMPLOYER:
RANKIN AUTOMOTIVE GROUP, INC.
ATTEST:
BY:/s/ Nancy J. Grant BY: /s/Randall B. Rankin
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Nancy J. Grant, Secretary Randall B. Rankin, CEO
Witnesses as to Employee: EMPLOYEE:
Glenn L. Langley BY: Otis A. Cannon, Jr.
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Otis A. Cannon, Jr.
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