1
Exhibit 10.8
EMPLOYMENT AGREEMENT
OF
LARRY E. ELLIOTT
WITH
GLASSTECH, INC.
This EMPLOYMENT AGREEMENT, dated as of July 2, 1997 is made
by and among GLASSTECH, INC., a Delaware corporation ("Glasstech"), GLASSTECH
HOLDING CO., a Delaware corporation with its principal place of business at
Ampoint Industrial Park, 995 Fourth Street, Perrysburg, Ohio 43551 ("Holding")
and LARRY E. ELLIOTT (SSN ###-##-####), an individual residing at 365 Osage
Court, Perrysburg, Ohio 43551 (the "Executive Employee").
BACKGROUND
----------
This Employment Agreement covers the employment of the
Executive Employee by Glasstech.
Now therefore, Glasstech and the Executive Employee, in
consideration of the mutual promises herein contained and intending to be
legally bound hereby, agree as follows:
1. TERM. Glasstech hereby employs the Executive Employee as
Vice President, Manufacturing & Engineering, and the Executive Employee hereby
accepts such employment, from the date of this Employment Agreement to June 30,
2002 unless sooner terminated in accordance with the provisions of Sections 4,
5, 6 or 7 hereof (the "Term"). At the expiration of the Term and each annual
anniversary thereafter, this Employment Agreement shall automatically renew for
an additional one (1) year period (the "Renewal Term" or the "Renewal Terms")
unless either party notifies
-1-
2
the other party in writing of its or his intention not to renew the Employment
Agreement (the "Renewal Termination Notice") not less than six (6) months prior
to the expiration of the last year of the Term or of any Renewal Term. The
provisions of Sections 8, 9, 10, 11 and 12 hereof shall survive any termination
of this Employment Agreement.
2. DUTIES. The Executive Employee, in his capacity as Vice
President, Manufacturing & Engineering of Glasstech (or such other and
comparable titles and positions as shall be given the Executive Employee by
Holding Board of Directors), shall perform for Glasstech the services currently
performed by him for Glasstech (or comparable services or other reasonable
duties as he and Glasstech may agree upon), subject to the reasonable direction
of Holding's Board of Directors. The Executive Employee shall perform such
services in Wood County, Ohio, or at such other location or locations where he
may be assigned by Glasstech from time to time, provided, however, that the
Executive Employee shall not be required, in connection with his performance of
such services, to travel on behalf of Glasstech in a manner inconsistent with
the scope of his duties and the past practices of Glasstech. The Executive
Employee shall devote his business time and effort to the Employment Agreement
performance of his duties as described herein as reasonably required. It is
understood that the Executive Employee may attend to outside investments, serve
as a director and/or officer of a non-competing company and serve as an officer,
director, or participant in educational, welfare, social, religious, and civic
organizations so long as such activities do
-2-
3
not materially interfere with the Executive Employee's employment
hereunder.
3. COMPENSATION.
3.1 BASE SALARY. Glasstech shall pay the Executive
Employee during each calendar year of the Term and each Renewal Term hereunder,
a minimum salary of One Hundred Fifty-Three Thousand Nine Hundred Fourteen
Dollars ($153,914) per calendar year adjusted as provided in Section 3.5
(hereinafter referred to as the "Base Salary"). The Base Salary shall be payable
in equal bi-weekly installments, less such deductions as shall be required to be
withheld by applicable law and regulations.
3.2 PERFORMANCE BONUS.
Executive Employee shall participate in Glasstech's cash
performance bonus pool (the "Pool"). At the end of each fiscal year (commencing
with the fiscal year ending June 30, 1998), Holding's Board of Directors will
establish the Pool which, at a minimum, shall be calculated according to the
following bonus chart (the "Bonus Chart"):
Percentage of Total
Glasstech Fiscal Year EBITDA Fiscal Year EBITDA Bonus Pool
- ---------------------------- ------------------ ----------
$14,000,000 to $14,999,999 5.0% $700,000 to $750,000
$15,000,000 to $15,999,999 7.5 $1,125,000 to $1,200,000
$16,000,000 and Above 10.0 $1,600,000 and Above
For purposes of this Section, EBITDA shall be subject to the following
adjustments: (Y) EBITDA shall be decreased by the aggregate amount of bonuses
paid to middle managers other than executive managers; and (Z) EBITDA shall be
increased in the amount
-3-
4
of any advisory fees paid to Key Equity Capital Corporation or its
affiliates.
Notwithstanding the foregoing, in the event Glasstech's EBITDA
for any fiscal year after the year ending June 30, 1998 (the "Base Year") is
less than $16,000,000 (the "Target"), the Board of Directors shall calculate the
average EBITDA of Glasstech from the Base Year through and including the fiscal
year in which the Target was not achieved. Using the Bonus Chart above, the
Board of Directors shall pay the participants (including but not limited to the
Executive Employee) the greater of (i) the amount of the Pool using the actual
EBITDA for such fiscal year or (ii) an amount equal to the percentage in the
Bonus Chart based upon the average EBITDA multiplied by the actual EBITDA for
such fiscal year.
If the Pool is not ten (10%) percent of the EBITDA in any
fiscal year during the Term of this Employment Agreement, such as in year 2001
in the example below, the Board of Directors shall, in each succeeding fiscal
year during the Term of this Employment Agreement, calculate the average EBITDA
of Glasstech from the Base Year through and including such succeeding fiscal
year. If the average EBITDA is greater than the actual EBITDA for any prior
fiscal year (or the average EBITDA used in a prior fiscal year), then the Board
of Directors, using the Bonus Chart, shall pay the participants (including but
not limited to the Executive Employee) an amount equal to (i) an amount equal to
the percentage in the Bonus Chart based upon the average EBITDA calculated in
such succeeding fiscal year, multiplied by the actual EBITDA for such fiscal
year less (ii) the amount of the Pool actually distributed to participants in
such prior fiscal year.
-4-
5
EXAMPLE:
- --------
Fiscal Year Percentage of Total Bonus
Year EBITDA Fiscal Year EBITDA Pool
- ---- ------ ------------------ ----
1998 $18,000,000 10% $1,800,000
1999 $20,000,000 10% $2,000,000
2000 $13,000,000(1) 10% $1,300,000
2001 $12,000,000(2) 7.5% $ 900,000
2002 $20,000,000 10% $2,000,000
$ 300,000(3)
----------
$2,300,000
Not later than 10 business days after delivery to Glasstech of
its fiscal year audit at the end of each fiscal year commencing with the fiscal
year ending June 30, 1998, the Board of Directors of Holding, in consultation
with the President and Chief Executive Officer, shall distribute the Pool to the
participants therein (including but not limited to the Executive Employee) in
such percentages as the Board of Directors determines appropriate; provided,
that, in no event shall the Board of Directors distribute less than the entire
Pool as calculated above in any fiscal year commencing with the fiscal year
ending June 30, 1998.
- --------
1 The average EBITDA in fiscal year 2000 is $17,000,000 ($18,000,000 +
$20,000,000 + $13,000,000 / 3). Therefore the Pool is calculated based upon
10% of EBITDA for that year.
2 The average EBITDA in fiscal year 2001 is $15,750,000 ($18,000,000 +
$20,000,000 + $13,000,000 + $12,000,000 / 4). Therefore the Pool is
calculated based upon 7.5% of EBITDA for that year.
3 The average EBITDA in fiscal year 2002 is $16,500,000
($18,000,000+20,000,000+13,000,000+12,000,000+20,000,000/5). Therefore, the
Pool for fiscal year 2001 is recomputed using 10 (10%) percent of EBITDA
for fiscal year 2001 ($1,200,000) less amount of the Pool actually
distributed for fiscal year 2001 ($900,000).
-5-
6
3.3 RESTRICTED STOCK PROGRAM.
(a) Holding hereby awards to Executive Employee 133.36
shares of restricted Class C Non-Voting Common Stock of Holding (the "Class C
Shares"), which shall be subject to forfeiture in accordance with the provisions
set forth herein. On each of the first four anniversary dates of this Employment
Agreement, the restrictions shall lapse as to 25% of the Class C Shares so long
as his employment has not been terminated on or before such date pursuant to the
provisions of Section 6 of this Employment Agreement. Subject to the forfeiture
provisions set forth herein, Executive Employee shall be entitled to full and
complete ownership of the Class C Shares and will be treated as the record and
beneficial owner of such for all purposes including, but not limited to, payment
of dividends and liquidation rights, provided that Executive Employee shall be
bound by all of the provisions of the Stockholders' Agreement of even date
herewith, among the Company, Executive Employee and the other stockholders of
the Company (the "Stockholders' Agreement).
(b) The certificates representing awarded Class C Shares
shall not be delivered to Executive Employee until the restrictions as to such
Class C Shares have lapsed. If Executive Employee's employment is terminated
pursuant to Section 6 of this Employment Agreement on or before any applicable
anniversary date as described in Section 3.3(a), Executive Employee shall
forfeit to Holding all such Class C Shares for which the restrictions have not
yet lapsed. In this regard, simultaneously with the issuance of certificates
representing awarded Class C Shares, Executive Employee shall execute and
deliver stock powers forfeiting to
-6-
7
Holding Class C Shares awarded hereunder for which the restrictions have not yet
lapsed in the event Executive Employee's employment is terminated pursuant to
Section 6 of this Employment Agreement on or before any applicable anniversary
date as described in Section 3.3(a). Executive Employee acknowledges that Class
C Shares awarded hereunder shall be subject to the restrictions and risks of
forfeiture contained herein and in the Stockholders' Agreement.
(c) Subject to Section 3.3(h), Executive Employee hereby
agrees that he shall pay to Holding, in cash, any foreign, United States
federal, state or local taxes of any kind required by law to be withheld with
respect to the Class C Shares awarded to him hereunder. If Executive Employee
does not make such payment to Holding, then Holding shall have the right to
deduct from any payment of any kind otherwise due to Executive Employee from
Holding (or from any subsidiary of Holding), any foreign, United States federal,
state or local taxes of any kind required by law to be withheld with respect to
the Class C Shares awarded to Executive Employee hereunder.
(d) Holding shall not issue Preferred Stock, Options or
Warrants or any otherwise dilutive securities without the consent of the
representative(s) of Key Equity Capital Corporation and the representative(s) of
executive management on the Board of Directors and unless such securities are
sold for fair market value, the proceeds of which are used for appropriate
corporate purposes as determined by the Board of Directors. All shareholders of
Class A, Class B or Class C Common Stock have the pre-emptive rights described
in the Stockholders' Agreement.
-7-
8
(e) "Change of Control" shall mean any one of the
following events: (i) the transfer, sale or other disposition of the Common
Stock of Holding which results in the current stockholders of Holding
(determined as of the date hereof) owning in the aggregate less than a majority
of the outstanding voting capital stock of Holding; (ii) any consolidation of
Holding with, or merger of Holding into, any other entity, any merger of another
entity into Holding, or any sale or transfer (in any one transaction or a series
of transactions) of all or substantially all of the assets of Holding to another
entity (other than (x) a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock, (y)
a merger which is effected solely to change the jurisdiction of incorporation of
Holding or (z) any consolidation with or merger of Holding into a wholly owned
subsidiary of Holding, or any sale or transfer by Holding of all or
substantially all of its assets to one or more of its wholly owned subsidiaries
in any one transaction or a series of transactions). Notwithstanding the
foregoing, a "Change in Control" shall not include any transaction permitted
under Section 2.2(b) of the Stockholders' Agreement. Notwithstanding anything to
the contrary in this Employment Agreement, so long as Executive Employee's
employment has not been terminated pursuant to the provisions of Section 6
before the date of a Change of Control, the restrictions with respect to all of
the Class C Shares shall immediately lapse upon a Change of Control.
(f) Executive Employee understands that the Class C Shares
have not been registered under the Securities Act of 1993, as amended (the "1933
Act") or any state securities laws.
-8-
9
Executive Employee represents that the Class C Shares awarded hereunder are not
being acquired by Executive Employee with a view toward resale or distribution
and Executive Employee will not sell or otherwise transfer such Class C Shares
except in compliance with the 1933 Act. The certificates representing the Class
C Shares shall bear such legends and statements evidencing the restrictions
contained in this Employment Agreement and as the Board of Directors of Holding
shall deem advisable to assure compliance with federal and state securities laws
and regulations.
(g) The award of the Class C Shares to Executive Employee
hereunder shall not confer any right to Executive Employee to continue in the
employ of Glasstech or any of its subsidiaries and shall not restrict or
interfere in any way with the right of Glasstech to terminate his employment
with or without cause, at any time.
(h) Executive Employee may file an "83(b) election" with
the Internal Revenue Service with respect to the Class C Shares. If Executive
Employee does file such an 83(b) election, Holding shall loan Executive Employee
an amount equal to 80% of Executive Employee's tax liability resulting from such
83(b) election (the "Loan Amount") subject to the following terms: (i) Executive
Employee shall execute and deliver to Holding a Promissory Note in the form of
EXHIBIT A attached hereto and made a part hereof (the "Class C Note"); (ii) the
principal amount of the Class C Note shall be equal to the Loan Amount and shall
accrue interest at the annual applicable federal rate for mid-term obligations
as of the month in which the Class C Note is issued; and (iii) the Executive
Employee shall execute and deliver to
-9-
10
Holding a Pledge Agreement in the form of Exhibit B attached hereto and made a
part hereof with respect to all shares of Class A Voting Common Stock of Holding
and all Class C Shares held by Executive Employee.
3.4 CLASS D SHARES. Executive Employee shall also be issued
1,000 shares of Class D Non-voting Common Stock of Holding issued pursuant to
Schedule II of the Stockholders' Agreement (the "Performance Share Program") and
subject to the terms and conditions of Section 9 of the Stockholders' Agreement.
3.5 COST OF LIVING INCREASE. The Base Salary provided for in
Section 3.1 hereof shall be adjusted annually to reflect the increase, if any,
in the cost of living by adding to the Base Salary an amount obtained by
multiplying the Base Salary by the percentage by which the level of the Consumer
Price Index North Central Region (for all items for urban wage earners and
clerical workers as reported for December 31 of each calendar period by the
Bureau of Labor Statistics of the United States Department of Labor) has
increased over its level as of January I of the same calendar year.
3.6 BENEFITS. The Executive Employee shall be entitled during
the Term and during any Renewal Terms to participate in such group life,
hospitalization and/or disability insurance benefits, health programs, qualified
or non-qualified deferred compensation plans or similar benefits which are
comparable to those made available by Glasstech on the date of this Employment
Agreement or thereafter to its executive employees generally, subject to the
eligibility provisions of such plans.
-10-
11
3.7 VACATIONS. The Executive Employee shall be entitled to
vacations and personal leave days more fully set forth in the GLASSTECH EMPLOYEE
HANDBOOK FOR SALARIED EXEMPT EMPLOYEES, the specific provisions of which
relating to vacation and personal leave are hereby incorporated into this
Employment Agreement by reference; provided, however, that the Executive
Employee shall be entitled to a minimum of three (3) weeks vacation per year.
3.8 INSURANCE. Glasstech agrees to pay life insurance and/or
annuity premiums on a policy(ies) selected by and insuring the life of the
Executive Employee with a beneficiary(ies) to be named by the Executive
Employee. The parties hereto agree that Glasstech shall not be obligated to pay
any premium greater than Five Thousand Dollars ($5,000) during the first year of
the Term and such amount shall be increased by Five Hundred Dollars ($500) each
year thereafter during the Term or during any of the Renewal Terms. The parties
further agree that the Executive Employee shall be permitted from time to time,
during the Term, or any Renewal Terms, to maintain such policy(ies), or to
exchange such policy(ies), or to acquire any new life insurance and/or annuity
products, provided however, that the portion of the premiums and costs to be
paid by Glasstech in connection with such policy(ies) shall not exceed the
amounts specified above. Glasstech expressly acknowledges that it shall have no
right, title or interest in and to such policy(ies), the same being the
exclusive property of the Executive Employee.
3.9 EXPENSE REIMBURSEMENT. Glasstech shall pay or reimburse
the Executive Employee for all reasonable expenses actually incurred or paid by
the Executive Employee during the Term
-11-
12
or any Renewal Term in performance of the Executive Employee's services under
this Employment Agreement, subject to receipt by Glasstech of reasonable
supporting documentation.
4. TERMINATION UPON DEATH. In the event the Executive Employee
dies during the Term or any Renewal Term, for a period of six (6) months
following such death Glasstech agrees to continue to pay to the surviving spouse
of the Executive Employee the Base Salary rate of the deceased Executive
Employee in effect at the time of death in equal bi-weekly installments less
such deductions required to be withheld by applicable law and regulations. The
salary continuation payable as provided herein shall be in addition to any right
of the estate of the deceased Executive Employee to (a) participate in the Pool
(in accordance with Section 3.2 above) in the fiscal year in which such death
occurred and to receive a prorated amount for the portion of the fiscal year in
which Executive Employee was alive, provided, however, that the level of such
participation shall be subject to the discretion of Holding Board of Directors,
and (b) to participate in the Performance Share Program as set forth therein.
Upon the death of the Executive Employee, the restrictions on all Class C Shares
shall lapse and such Class C Shares shall be released to the estate of the
deceased Executive Employee. Glasstech shall also remit to the estate of the
deceased Executive Employee any other benefits earned and accrued or payable up
to the date of such death and shall reimburse to the estate of the deceased
Executive Employee any outstanding unreimbursed expenses incurred by such
Executive Employee on behalf of Glasstech and documented as provided herein.
-12-
13
In the event the deceased Executive Employee is not survived
by a spouse or in the further event the deceased Executive Employee and his
spouse are separated at the time of death by agreement, court order or decree,
or otherwise, then such salary continuation shall be remitted to the estate of
the deceased Executive Employee.
5. SALARY CONTINUATION ON DISABILITY AND TERMINATION UPON
DISABILITY. In the event the Executive Employee becomes disabled during the Term
or any Renewal Term by virtue of ill health or other disability and is thereby
unable to perform on a full time basis substantially and continuously the duties
assigned to him by Glasstech, Glasstech agrees to continue the Executive
Employee's Base Salary until such time as Executive Employee is eligible to
collect benefits under Glasstech's long term disability insurance coverage. At
such time as Executive Employee is eligible to collect benefits under
Glasstech's long term disability insurance coverage (a "Disability"), Glasstech
shall have no further obligation to compensate the Executive Employee (except
that Glasstech shall continue to provide group life and health benefits to
Executive Employee consistent with those provided to other executive employees
for a period of two (2) years from the date on which Executive Employee's long
term disability benefits commence) and further Glasstech shall have the right to
terminate the employment of the Executive Employee hereunder upon written notice
delivered pursuant to Section 13. In the event of such Disability, the
restrictions on all Class C Shares shall lapse and such Class C Shares shall be
released to the Executive Employee.
-13-
14
Executive Employee shall participate in the Performance Share Program as set
forth therein.
6. TERMINATION FOR CAUSE AND VOLUNTARY TERMINATION.
(a) Notwithstanding any other provision of this Employment
Agreement, Glasstech may terminate the Executive Employee's employment at any
time for Cause (as hereinafter defined) and the Executive Employee may
voluntarily terminate the Executive Employee's employment with Glasstech. Upon
such termination for Cause or upon Executive Employee's voluntary termination,
Executive Employee shall not participate in the Performance Bonus (pursuant to
Section 3.2) for the fiscal year in which his termination occurred, and
Executive Employee shall automatically forfeit those shares of Restricted Stock
for which the restrictions would have lapsed (pursuant to Section 3.3) in the
contract year in which his termination occurred and any subsequent year and
shall participate in the Performance Share Program as set forth therein. Upon
such termination for Cause or upon Executive Employee's voluntary termination,
the Executive Employee shall be entitled to, except as restricted in the
preceding sentence, receive any salary and other benefits earned or accrued, and
reimbursement for expenses incurred, prior to the date of termination.
(b) "Cause" shall mean (i) the Executive Employee's
willful and continuing affirmative refusal to perform his or her duties
hereunder (other than as a result of a Disability); (ii) dishonesty in the
performance of his or her duties hereunder which results in criminal indictment
of the Executive Employee; (iii) the
-14-
15
Executive Employee's breach of any material term of this Employment Agreement
(provided that Glasstech shall give the Executive Employee written notice of
such breach and a thirty (30) day period after notice to cure such breach,
except that no notice or cure period shall be given or extended with respect to
breach of the provisions of Section 8 of this Employment Agreement); or (iv) the
Executive Employee's conviction for a felony or for a crime which, in the
reasonable judgment of Glasstech, renders the Executive Employee unable to
perform his duties as described in this Employment Agreement.
7. TERMINATION WITHOUT CAUSE. If the Executive Employee is
terminated prior to the end of the Term or any Renewal Term other than pursuant
to Section 4, Section 5, or Section 6 hereof (hereinafter referred to as a
termination "Without Cause"), the Executive Employee shall be entitled to (in
addition to such other rights as he may have, or damages to which he may be
entitled at law or in equity) (i) all payments when due of any salary and other
benefits (including, without limitation, participation in the Performance Bonus
pursuant to Section 3.2) accrued through the date of termination, including the
payment of all salary due for the remainder of the Term or Renewal Term as
though the Executive Employee had remained employed through the full Term (or,
if renewed, the Renewal Term) of the Employment Agreement, (ii) the restrictions
on all Class C Shares shall lapse and such Class C Shares shall be released to
the Executive Employee, and (iii) participation in the Performance Share Program
as set forth therein.
-15-
16
8. COVENANT AGAINST COMPETITION. The Executive Employee
acknowledges that (i) the principal business of Glasstech is design,
manufacture, marketing, sale, distribution and servicing of glass bending,
tempering and annealing equipment worldwide to both automotive glass fabricators
and architectural glass producers and the principal business of Stir-Melter,
Inc. is the vitrification of hazardous waste (collectively, the "Glasstech
Business"); (ii) Glasstech is one of a limited number of persons throughout the
world which has developed such business; (iii) the Glasstech Business is, in
large part, international in scope and Glasstech's customers, potential
customers and competitors are located throughout the world; (iv) the Executive
Employee's work for Glasstech has given and will continue to give him access to
the confidential affairs and proprietary information of Glasstech; (v) this
Employment Agreement has been entered into as part of a series of transactions
pursuant to which Executive Employee and others have purchased an equity
interest in Glasstech and sold their equity interest in Glasstech; and (vi)
Glasstech would not have entered into this Employment Agreement but for the
agreements and covenants of the Executive Employee contained in this Section 8.
Accordingly, the Executive Employee covenants and agrees that:
(a) he shall not, anywhere in the world directly or
indirectly, (1) engage in Glasstech Business for his own account or that of any
other person; (2) render any services related to the Glasstech Business to any
person (other than Glasstech) engaged in such activities; or (3) become
interested in any such person (other than Glasstech) as a partner, stockholder,
member, principal, agent, trustee, consultant or in any other relationship or
capacity
-16-
17
for a period commencing on the date of this Employment Agreement and terminating
on the day which is: (i) the later of (A) five (5) years following the date
hereof, or (B) two (2) years following the termination of the Executive
Employee's employment pursuant to a Renewal Termination Notice if given by
Executive Employee, or (ii) if the Executive Employee's employment has been
terminated for Cause, then two (2) years following termination of Executive
Employee's employment; (collectively the "Restricted Period") provided, however,
that there shall be no Restricted Period if Executive Employee's employment is
terminated Without Cause or if Glasstech delivers a Renewal Termination Notice
to Executive Employee. Notwithstanding the above, the Executive Employee may
own, directly or indirectly, solely as an investment, securities of any such
person which are traded on any national securities exchange or NASDAQ if the
Executive Employee is not a controlling person of, or a member of a group which
controls such person and does not, directly or indirectly, own one percent (1%)
or more of any class of securities of such person.
(b) at all times during and after this Employment
Agreement is in force he shall keep secret and retain in strictest confidence,
and shall not use for his benefit or the benefit of others, except in connection
with the business and affairs of Glasstech and its affiliates, all confidential
matters relating to Glasstech Business and to Glasstech and its affiliates
learned by the Executive Employee heretofore or hereafter directly or indirectly
from Glasstech or its affiliates or any of their predecessors or successors (the
"Confidential Company Information") and shall not disclose the Confidential
Company Information to
-17-
18
anyone outside of Glasstech and its affiliates except with Glasstech's express
written consent. The requirements of this Section 8(b) shall not apply to
Confidential Company Information which is: (1) at the time of receipt or
thereafter publicly known through no wrongful act of the Executive Employee: (2)
received from a third party not under any obligation to keep such information
confidential; or (3) required to be disclosed by law.
(c) during the Restricted Period, he shall not, without
Glasstech's prior written consent, directly or indirectly, (i) knowingly solicit
employees of Glasstech or its affiliates to leave the employ of Glasstech or any
of its affiliates or (ii) hire any employee who has left the employ of Glasstech
or any of its affiliates within one year of the termination of such employee's
employment with Glasstech or any of its affiliates.
(d) at any time upon written request from Glasstech, he
shall deliver to Glasstech all memoranda, notes, lists, records and other
documents (and all copies thereof) made or compiled by the Executive Employee or
made available to him concerning Glasstech Business or Glasstech or any of its
affiliates all of which shall at all times be the property of Glasstech.
9. RIGHTS AND REMEDIES UPON BREACH. If the Executive Employee
breaches any of the provisions of Section 8 (the "Restrictive Covenants"),
Glasstech shall have the following rights and remedies (upon compliance with any
necessary prerequisites imposed by law upon the availability of such remedies),
each of which rights and remedies shall be independent of the other and
severally enforceable, and all of which rights and remedies shall
-18-
19
be in addition to, and not in lieu of, any other rights and remedies available
to Glasstech under law or in equity:
(a) The right to have the Restrictive Covenants
specifically enforced by any court having jurisdiction over the parties to this
Employment Agreement; and
(b) The right to entry of restraining orders and/or
injunctions (preliminary, mandatory, temporary and permanent) against the
Executive Employee against violations, threatened or actual, and whether or not
then continuing, of such covenants, it being acknowledged and agreed that any
such breach or threatened breach will cause irreparable injury to Glasstech and
that money damages will not provide an adequate remedy to Glasstech; and
(c) The right and remedy to require the Executive Employee
to account for and pay over to Glasstech all compensation, profits, monies,
accruals, increments or other benefits (collectively, "Benefits") derived or
received by him as the result of any transactions constituting a breach of the
Restrictive Covenants, and the Executive Employee shall account for and pay over
such Benefits to Glasstech. Glasstech may set off any amounts due to Glasstech
under this Section 9 against any amounts owed to the Executive Employee.
10. MEDIATION, ARBITRATION. Except for a dispute under Section
8 which shall be subject to the provisions of Section 9, neither party shall
institute an arbitration proceeding hereunder, before that party has sought to
resolve the dispute through direct negotiation with the other party. If the
dispute is not resolved within three weeks after a demand for direct
negotiation, the parties shall attempt to resolve the dispute through nonbinding
-19-
20
mediation. If the parties do not promptly agree on a mediator, then either party
may notify the CPR Institute for Dispute Resolution, 366 Madison Avenue, New
York, New York, to initiate selection of a mediator from the CPR Panel of
Neutrals. The fees and expenses of the mediator shall be paid one-half each by
each party. If the mediator is unable to facilitate a settlement of the dispute
within a reasonable period of time, as determined by the mediator, the mediator
shall issue a written statement to the parties to that effect and the aggrieved
party may then seek relief through arbitration, which shall be binding, before a
single arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association (the "Association"). The place of arbitration shall be
Detroit, Michigan. Arbitration may be commenced at any time by any party hereto
after giving written notice in the manner described in Section 13 of this
Employment Agreement. The arbitrator shall be selected by the joint agreement of
each party, but if they do not so agree within twenty (20) days after the date
of the notice referred to above, the selection shall be made pursuant to the
rules from the panels of the arbitrators maintained by such Association. The
arbitrator shall render his decision within one hundred eighty (180) days of
appointment. Any award rendered by the arbitrator shall be conclusive and
binding upon the parties hereto; provided, however, that any such award shall be
accompanied by a written opinion of the arbitrator giving the reasons for the
award. This provision for arbitration shall be specifically enforceable by the
parties and the decision of the arbitrator in accordance herewith shall be final
and binding and there shall be no right of appeal therefrom. Judgment upon the
-20-
21
award rendered by the arbitrator in accordance herewith shall be final and
binding and there shall be no right of appeal therefrom. Judgment upon the award
rendered by the arbitrator may be entered by any court having jurisdiction
thereof. The costs and expenses of arbitration, including attorneys' fees and
expenses of the arbitrator shall be paid entirely by the nonprevailing party and
in addition the nonprevailing party shall reimburse the other party for the fees
and expenses of mediation incurred by such party, unless the arbitrator
determines that the costs, expenses and attorneys' fees should be apportioned
between the parties, then as the arbitrator may assess. The arbitrator shall not
be permitted to award punitive or similar type damages under any circumstances.
As set forth in the first phrase of the first sentence of this section 10, this
arbitration provision shall constitute the sole and exclusive remedy for any
dispute under this Employment Agreement.
11. BLUE PENCILING. The Executive Employee acknowledges and
agrees that (i) he has had an opportunity to seek advice of counsel in
connection with this Employment Agreement and (ii) the Restrictive Covenants are
reasonable in geographical and temporal scope and in all other respects. If any
court determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, whether because of the duration or geographical scope
of such provision, the duration or scope of such provision, as the case may be,
shall be reduced so that such provision becomes enforceable and. in its reduced
form, such provision shall then be enforceable and shall be enforced.
-21-
22
12. SEVERABILITY. If any court determines that any covenant or
provision of this Employment Agreement is unenforceable for any reason, the
remaining covenants or provisions shall remain in full force and effect.
13. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be (a) delivered personally,
(b) sent by facsimile transmission, (c) sent by certified or registered mail,
postage prepaid, return receipt requested, or (d) sent by overnight delivery
service, to the following addresses:
(i) if to Glasstech, to:
Glasstech, Inc.
Ampoint Industrial Park
995 Fourth Street
Perrysburg, Ohio 43551
Attention: Mark Christman, President
Fax: (419) 661-9366
and
Kenneth H. Wetmore, Esquire
Vice President, General Counsel and Secretary
Glasstech, Inc.
Ampoint Industrial Park
995 Fourth Street
Perrysburg, Ohio 43551
Fax: (419) 661-9616
and
Key Equity Capital Corporation
127 Public Square, 6th Floor
Cleveland, Ohio 44114
Attention: David P. Given
(ii) if to the Executive Employee, to:
Larry E. Elliott
365 Osage Court
Perrysburg, Ohio 43551
Any such notice shall be deemed given (a) when so delivered
personally, (b) if sent by certified or registered mail,
-22-
23
return receipt requested, on the date the return receipt is signed, or (c) if
sent by overnight delivery service. on the next normal business day after the
date of sender receipt.
Any such person may, by giving notice in accordance with this
section to the other parties hereto, designate another address or person for
receipt by such person of notices hereunder.
14. ENTIRE EMPLOYMENT AGREEMENT, EFFECTIVE TIME. This
Employment Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreement(s),
written or oral with respect thereto. This Employment Agreement will be
effective upon the consummation of the Agreement and Plan of Merger (the "Merger
Agreement") dated June 5, 1997 by and among Glasstech, Holding and Glasstech Sub
Co. If the Merger Agreement is not consummated within the time set forth
therein, this Employment Agreement shall be null and void and of no further
force and effect. The Employment Agreement dated December 19, 1996 between
Glasstech and the Executive Employee is hereby terminated and is null and void
and of no further force and effect.
15. INDEMNIFICATION. During the Term or any Renewal Term
hereof and subject to the continuing compliance by the Executive Employee with
his obligations hereunder, Glasstech shall provide the Executive Employee with
indemnification against liabilities or claims arising by reason of the fact that
he is an employee. officer and/or director of Glasstech, and against expenses
incurred in connection therewith, to the fullest extent of indemnification then
available to any officer and/or director of Glasstech under and in accordance
with the laws of the State of Delaware. Also, Glasstech shall purchase and/or
maintain
-23-
24
Directors' and Officers' insurance on or inuring to the Executive Employee's
benefit with respect to such liabilities, claims, or expenses as described in
the Agreement and Plan of Merger among Glasstech, Glasstech Sub Co. and Holding,
dated June 5, 1997.
16. WAIVERS AND AMENDMENTS. This Employment Agreement may be
amended, superseded, canceled, renewed, or extended, and the terms hereof may be
waived, only by a written instrument signed by the parties or, in the case of a
waiver, by the party waiving compliance. No delay on the part of any party in
exercising any right, power, or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power,
or privilege, nor shall any single or partial exercise of any such right, power,
or privilege, preclude any other or further exercise thereof or the exercise of
any other such right, power, or privilege.
17. GOVERNING LAW. This Employment Agreement shall be governed
by and construed in accordance with the laws of the State of Ohio applicable to
agreements made and to be performed within the State.
18. ASSIGNMENT. This Employment Agreement, and the Executive
Employee's rights and obligations hereunder, may not be assigned by either party
hereto without the consent of the other and any purported assignment by the
Executive Employee or Glasstech in violation hereof shall be null and void;
provided, however, that Glasstech may assign its rights and obligations
hereunder without the Executive Employee's consent in connection with a sale of
all or substantially all of Glasstech's assets.
-24-
25
19. BINDING EFFECT. This Employment Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors,
permitted assigns, heirs, executors, and legal representatives.
20. COUNTERPARTS. This Employment Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original but all such counterparts together shall
constitute one and the same instrument. Each counterpart may consist of two (2)
copies hereof each signed by one of the parties hereto.
21. HEADING. The headings in this Employment Agreement are for
reference only and shall not affect the interpretation of this Employment
Agreement.
-25-
26
IN WITNESS WHEREOF, the parties hereto have executed. or
caused to be executed, this Employment Agreement as of the day and year first
above written.
GLASSTECH HOLDING CO.
By: /s/ Mark D. Christman
----------------------------
Its: President
---------------------------
GLASSTECH, INC.
By: /s/ Mark D. Christman
----------------------------
Its: President
---------------------------
EXECUTIVE EMPLOYEE
/s/ Larry E. Elliott
-------------------------------
Larry E. Elliott
-26-