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Exhibit 10.10
EMPLOYMENT AGREEMENT
OF
JAMES P. SCHNABEL, JR.
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 JAMES
P. SCHNABEL, JR. (SSN ###-##-####), an individual residing at 1915 Wexford Hill
Lane, Holland, Ohio 43528 (the "Executive Employee").
BACKGROUND
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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, Product Development, 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 the other party in
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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, Product Development 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 not materially interfere with the Executive
Employee's employment hereunder.
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3. COMPENSATION.
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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 Thirty-Two Thousand Eight Hundred Forty-Three
Dollars ($132,843) 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.
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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 of any advisory fees paid to Key Equity Capital
Corporation or its affiliates.
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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.
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EXAMPLE:
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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)
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$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.
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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).
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3.3 RESTRICTED STOCK PROGRAM.
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(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
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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.
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(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.
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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
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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.
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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.
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 or any Renewal Term in performance of the
Executive Employee's
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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.
In the event the deceased Executive Employee is not survived by a spouse
or in the further event the deceased Executive
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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. Executive Employee shall participate in the
Performance Share Program as set forth therein.
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6. TERMINATION FOR CAUSE AND VOLUNTARY TERMINATION.
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(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 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
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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.
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
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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
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
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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 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
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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 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
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(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
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
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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
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
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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.
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)
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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:
James P. Schnabel, Jr.
1915 Wexford Hill Lane
Holland, Ohio 43528
Any such notice shall be deemed given (a) when so delivered
personally, (b) if sent by certified or registered mail, 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.
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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 6, 1994 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 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
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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.
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
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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.
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/ James P. Schnabel, Jr.
-------------------------------
James P. Schnabel, Jr.
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