EXHIBIT 10.14
EMPLOYMENT AGREEMENT
FREDERICK M. FRIEDMAN
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of July 1,
1997, by JEH ACQUISITION CORP., a Delaware Corporation (the "Company"), and
FREDERICK M. FRIEDMAN, an individual resident in New York, New York (the
"Executive").
WHEREAS, the Company is engaged principally in the business of the
distribution of roofing supplies and related products; and
WHEREAS, the Company intends to seek acquisition candidates engaged
in the wholesale distribution of roofing supplies and related products and
vendors or suppliers to such distribution businesses and businesses related
thereto; and
WHEREAS, the Company is acquiring, pursuant to that certain Asset
Purchase Agreement by and among the Company as "Buyer", JEH Company, a Texas
corporation, as "Seller", and James E. Helzer as "Shareholder" of Seller,
dated July 8, 1997 (the "Asset Purchase Agreement"), substantially all of the
assets of Seller, including Seller's business operations in Texas, Colorado
and Indiana (the "Acquisition"); and
WHEREAS, the Company desires to employ the Executive as its
Executive Vice President, Chief Financial Officer, Secretary and Treasurer;
and
WHEREAS, Company acknowledges that Executive is a party to an
employment agreement with TDA Industries, Inc. ("TDA") which has been assumed
by Pemberton Services Corp. ("PSC"); and
WHEREAS, Executive is willing to accept such employment by the
Company, all in accordance with the conditions and other provisions
hereinafter set forth and the acknowledgment, approval and consent of TDA and
PSC as indicated by their acknowledgment, approval and consent as set forth
at the foot of this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual
representations, covenants, and agreements set forth herein, and for other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree, effective upon the
consummation of the Acquisition, as follows:
1. TERM. Subject to and conditioned upon TDA's and PSC's
acknowledgment, approval and consent to Executive's entering into this
Agreement and TDA's and PSC's acknowledgement that this Agreement shall not
be deemed to be a violation of any of the terms and conditions of Executive's
agreements with TDA and PSC, the term of this Agreement shall
be for a period of five (5) years commencing on the consummation of the
Acquisition and terminating on the fifth anniversary date of the consummation of
the Acquisition, subject to earlier termination as provided herein or unless
extended by mutual consent of the parties.
2. EMPLOYMENT.
(A) Subject to the terms and conditions and for the
compensation hereinafter set forth, the Company hereby agrees to employ
Executive for and during the term of this Agreement. Executive is hereby
employed by the Company as Executive Vice President, Chief Financial Officer,
Secretary and Treasurer of the Company. The Executive's powers and duties
shall be those of an executive nature which are appropriate for an Executive
Vice President, Chief Financial Officer, Secretary and Treasurer in
accordance with the Company's bylaws; and Executive does hereby accept such
employment or greater employment as may be mutually agreed upon by the
parties hereto and agrees to devote as much time to the affairs of the
Company as Executive deems necessary to discharge his duties to Company
during the term of this Agreement. Executive shall report to the Board of
Directors of the Company. The Company shall not require Executive to be
employed in any location other than in proximity to his residence unless he
consents in writing to such location.
(B) During the term of this Agreement, Executive shall be
furnished with office space and facilities commensurate with his position and
adequate for the performance of his duties; he shall be provided with the
prerequisites customarily associated with the position of Executive Vice
President and Chief Financial Officer of the Company.
(C) During the term of this Agreement, the Company shall be
responsible (i) to pay to Executive the compensation set forth in Section 3;
(ii) reimburse Executive for expenses as provided in Section 4; and (iii)
provide Executive with the benefits and vacation set forth in Section 5.
(D) Executive agrees to submit to any medical examination(s)
and provide any information and documents reasonably necessary for the
Company to obtain any insurance required by this Agreement and "Key Man" life
insurance on the Executive's life.
3. COMPENSATION.
(A) SALARY. During the term of this Agreement, the Company
agrees to pay Executive, and Executive agrees to accept, an annual salary of
not less than Sixty Thousand Dollars ($60,000) per year, payable $5,000 per
month in accordance with the Company's policies, for services rendered by
Executive hereunder.
(B) BONUS. As additional compensation, the Company may pay
Executive a periodic bonus as determined by the Board of Directors.
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(C) INCREASES. The annual salary is subject to periodic
increases at the discretion of the Board of Directors with such increases to
take effect no later than on each anniversary date of this Agreement.
4. EXPENSES. The Company shall reimburse Executive for all
reasonable and actual business expenses incurred by him in connection with
his service to the Company, upon submission by him or appropriate vouchers
and expense account reports.
5. BENEFITS.
(A) INSURANCE. In addition to the salary and bonus to be paid
to Executive hereunder, the Company shall maintain family medical and dental
insurance, life insurance in the amount of not less than Fifty Thousand
Dollars ($50,000) on the life of Executive and for which Executive shall
designate the beneficiary(ies), and long term disability insurance providing
monthly disability benefits to Executive of not less than Five Thousand
Dollars ($5,000). Executive and his dependents shall be entitled to
participate in such other benefits as are extended to active executive
employees of the Company and their dependents including but not limited to
pension, retirement, profit-sharing, 401(k), stock option, bonus and
incentive plans, group insurance, hospitalization, medical or other benefits
made available by the Company to its employees generally.
(B) VACATION. Executive shall be entitled to take up to four
(4) weeks of paid vacation annually at a time mutually convenient to the
Company and Executive.
6. RESTRICTIVE COVENANTS.
(A) Except in the ordinary course of his duties as Executive
Vice President, Chief Financial Officer, Secretary or Treasurer, or in the
furtherance of the business of the Company, during the period from the date
of this Agreement until sixty (60) days following the date on which his
employment with the Company is lawfully and properly terminated, Executive
will not, directly or indirectly:
(i) persuade or attempt to persuade any person or entity
which is or was a customer, client or supplier of the Company on
the date on which Executive's employment with the Company is
terminated to cease doing business with the Company, or to
reduce the amount of business it does with the Company;
(ii) solicit for himself or any other person or entity other
than the Company the business of any person or entity which is a
customer or client of the Company, or was a customer or client
within six (6) months prior to the termination of his employment
by the Company, with respect to the distribution of roofing
supplies and related products; or
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(iii) persuade or attempt to persuade any employee of the
Company, or any individual who was an employee of the Company
during the six (6) month period prior to the lawful and proper
termination of this Agreement, to leave the Company's employ, or
to become employed by any person or entity other than the
Company.
(B) Executive acknowledges that the restrictive covenants (the
"Restrictive Covenants") contained in this Section 6 are a condition of his
employment and are reasonable and valid in geographical and temporal scope
and in all other respects. If any court determines that any of the
Restrictive Covenants, or any part of any of the Restrictive Covenants is
invalid or unenforceable, the remainder of the Restrictive Covenants and
parts thereof shall not thereby be affected and shall be given full effect,
without regard to the invalid portion. If any court determines that any of
the Restrictive Covenants, or any part thereof, is invalid or unenforceable
because of the geographic or temporal scope of such provision, such court
shall have the power to reduce the geographic or temporal scope of such
provision, as the case may be, and, in its reduced form, such provision shall
then be enforceable.
(C) If Executive breaches, or threatens to breach, any of the
Restrictive Covenants, the Company, in addition to and not in lieu of any
other rights and remedies it may have at law or in equity, shall have the
right to injunctive relief; it being acknowledged and agreed to by Executive
that any such breach or threatened breach would cause irreparable and
continuing injury to the Company and that money damages would not provide an
adequate remedy to the Company.
7. TERMINATION.
(A) DEATH. In the event of Executive's death ("Death") during
the term of his employment, Executive's designated beneficiary(ies), or in
the absence of such beneficiary designation, his estate shall be entitled to
payment of Executive's salary from date of Death to the expiration of one (1)
year thereafter. In addition, Executive's beneficiary(ies) and/or dependents
shall be entitled, for the same one year period, to continuation, at the
Company's expense, of such benefits as are then being provided to them under
Section 5(A) hereof, and any additional benefits as may be provided to
dependents of the Company's executive officers in accordance with the terms
of the Company's policies and practices. In addition, any options granted to
Executive which have not, by the terms of the options, vested shall be deemed
to have vested as of the date of his Death and shall thereafter be
exercisable by Executive's beneficiary(ies) or estate for the maximum period
of time allowed for exercise thereof under the terms of such options.
(B) DISABILITY.
(i) In the event Executive, by reason of physical or mental
incapacity, shall be disabled ("Disability") for a period of at least one (1)
year, the Company shall have the option at any time thereafter to terminate
Executive's employment hereunder for Disability. Such
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termination will be effective thirty (30) days after the Board of Directors
of Company gives written notice of such termination to Executive, unless
Executive shall have returned to the performance of his duties prior to the
effective date of the notice. All obligations of the Company hereunder shall
cease upon the effectiveness of such termination, provided that such
termination shall not affect or impair any rights Executive may have under
any policy of long term disability insurance or benefits then maintained on
his behalf by the Company. In addition, for a period of one (1) year
following termination of Executive's employment for Disability, Executive and
his dependents, as the case may be, shall continue to receive the benefits
set forth under Section 3(A) and 5(A) hereof, as well as such benefits as are
extended to the Company's active executive employees and their dependents
during such period. Any options granted to the Executive which have not, by
the terms of the options, vested shall be deemed to have vested at the
termination and shall thereafter be exercisable by the Executive, his
beneficiary(ies), conservator or estate, as applicable, for the maximum
period of time allowed for exercise thereof under the terms of such options.
(ii) "Incapacity" as used herein shall mean the inability of
the Executive due to physical or mental illness, injury or disease to perform
the essential functions of Executive's duties under this Agreement.
Executive's salary as provided for hereunder shall continue to be paid during
any period of incapacity prior to and including the date on which Executive's
employment is terminated for Disability and for one (1) year following
termination for Disability in accordance with Section 7(B)(i).
(C) BY THE COMPANY FOR CAUSE.
(i) The Company shall have the right, before the expiration
of the term of this Agreement, to terminate this Agreement and to discharge
Executive for cause (hereinafter "Cause"), and all compensation to Executive
shall cease to accrue upon discharge of Executive for Cause. For the purposes
of this Agreement, the term "Cause" shall mean (i) Executive's conviction,
after the date hereof, of a felony; (ii) the alcoholism or drug addition of
Executive; (iii) gross negligence or willful misconduct of Executive in
connection with his duties hereunder; or (iv) the determination by any
regulatory or judicial authority (including any securities self-regulatory
organization) that Executive knowingly and directly violated during the
period beginning ten (10) years before or after the date hereof, any federal
or state securities law, or any rule or regulation adopted thereunder.
(ii) If the Company elects to terminate Executive's employment
for Cause under Section 7(C)(i) above, such termination shall be effective
fifteen (15) days after the Company gives written notice of such termination
to Executive. In the event of a termination of Executive's employment for
Cause in accordance with the provisions of Section 7(C)(i), the Company shall
have no further obligation to the Executive, except for the payment of all
compensation and other vested benefits which have accrued through the date of
such termination and not been paid and any other benefits to which he or his
dependents may be entitled by law.
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(D) BY EXECUTIVE FOR REASON. Executive shall have the right to
terminate his employment at any time for reason (herein designated and
referred to as "Reason"). The term Reason shall mean (i) the failure to elect
or appoint, or re-elect or re-appoint, Executive to, or removal or improperly
attempted removal of Executive from, his positions as Executive Vice
President, Chief Financial Officer, Secretary or Treasurer with the Company,
except in connection with the proper termination of Executive's employment by
reason of Cause, Death or Disability; (ii) a reduction in Executive's overall
compensation other than his discretionary bonus under Section 3(B) above or
an adverse change in the nature or scope of the authorities, powers,
functions or duties normally attached to the Executive's position with the
Company; (iii) the Company's failure or refusal to perform any obligation
required to be performed in accordance with this Agreement after a reasonable
notice and an opportunity to cure same; or (iv) a Change in Control of the
Company, as defined herein.
(E) SEVERANCE.
(i) In the event Executive's employment hereunder shall be
terminated by the Executive for Reason or by the Company for other than
Cause, Death or Disability: (a) the Executive shall thereupon receive as
severance pay in a lump sum the amount of salary and bonuses which the
Executive would have received for the remaining term of this Agreement had
there been no termination, provided however, that in no event shall such lump
sum payment be less than two years' salary and bonus; and (b) the Executive's
(and his dependents') participation in any and all life, disability, medical
and dental insurance plans shall be continued, or equivalent benefits
provided to him or them by the Company, at no cost to him or them, for a
period of two years from such termination; and (c) any options granted to
Executive which have not, by the terms of the options, vested shall be deemed
to have vested at the termination and shall thereafter be exercisable for the
maximum period of time allowed for exercise thereof under the terms of such
options;
(ii) An election by Executive to terminate his employment
under the provisions of this Section 7 shall not be deemed a voluntary
termination of employment of Executive for the purpose of interpreting the
provisions of any of the Company's employment benefit plans, programs or
policies.
(F) RESIGNATION. In the even Executive resigns without Reason
prior to the expiration hereof, he shall receive any unpaid fixed salary
through such resignation date and such benefits to which he is entitle by law.
(G) EXTENSION OF BENEFITS. Any extension of benefits following
the termination of employment provided for herein shall be deemed to be in
addition to, and not in lieu of, any period for the continuation of benefits
provided for by law, either at the Company's, Executive's, or his dependents'
expense.
(H) CHANGE IN CONTROL. For purposes hereof, a Change in
Control shall be deemed to have occurred (i) if there has occurred a "change
in control" as such term is used in
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Item 1(a) of Form 8-K promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or (ii) if there has occurred a change in
control as the term "control" is defined in Rule 12b-2 promulgated under the
Exchange Act.
8. INDEMNIFICATION. The Company hereby indemnifies and holds
Executive harmless to the extent of any and all claims, suits, proceedings,
damages, losses or liabilities incurred by Executive and arising out of any
acts or decisions done or made in the authorized scope of his employment
hereunder. The Company hereby agrees to pay all expenses, including
reasonable attorney's fees, actually incurred by Executive in connection with
the investigation of any such matter, the defense of any such action, suit or
proceeding and in connection with any appeal thereon including the costs of
settlements. Nothing contained herein shall entitle Executive to
indemnification by the Company in excess of that permitted under applicable
law.
9. WAIVER. No delay or omission to exercise any right, power or
remedy accruing to any party hereto shall impair any such right, power or
remedy or shall be construed to be a waiver of or an acquiescence to any
breach hereof. No waiver of any breach hereof shall be deemed to be a waiver
of any other breach hereof theretofore or thereafter occurring. Any waiver of
any provision hereof shall be effective only to the extent specifically set
forth in an applicable writing. All remedies afforded to any party under this
Agreement, by law or otherwise, shall be cumulative and not alternative and
shall not preclude assertion by such party of any other rights or the seeking
of any other rights or remedies against any other party.
10. GOVERNING LAW. The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws of the
State of New York, and this Agreement and its provisions shall be construed
according to the laws of the State of New York, without regard to the
principles of conflicts of law and the actual domiciles of the parties hereto.
11. NOTICES. All notices, demands or other communications required
or permitted to be given in connection with this Agreement shall be given in
writing, shall be transmitted to the appropriate party by hand delivery, by
certified mail, return receipt requested, postage prepaid, or by overnight
courier and shall be addressed to a party at the address given below. A party
may designate by written notice given to the other party a new address to
which any notice, demand or other communication hereunder shall thereafter be
given. Each notice, demand or other communication transmitted in the manner
described in this Section 11 shall be deemed to have been given and received
for all purposes at the time it shall have been (i) delivered to the
addresses as indicated by the return receipt (if transmitted by mail) or the
affidavit of the messenger (if transmitted by hand delivery or overnight
courier), or (ii) presented for delivery during normal business hours, if
such delivery shall not have been accepted for any reason.
If to Executive: Frederick M. Friedman
122 East 42nd Street, Suite 1116
New York, New York 10168
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If to Company: JEH Acquisition Corp.
c/o TDA Industries, Inc.
122 East 42nd Street, Suite 1116
New York, NY 10168
12. ASSIGNMENTS. This Agreement shall be binding upon and inure to
the benefit of the parties and each of their respective successors, assigns,
heirs and legal representatives; provided, however, that Executive may not
assign or delegate his obligations, responsibilities and duties hereunder
except as permitted by the Company's bylaws, custom, practice, policies or
the Board of Directors. The Company may not assign this Agreement without the
prior written consent of the Executive.
13. MISCELLANEOUS. This Agreement contains the entire understanding
between the parties hereto and supersedes all other oral and written
agreements or understandings between them with respect to the subject matter
hereof. No modification or addition hereto or waiver or cancellation of any
provision shall be valid except by a writing signed by the party to be
charged therewith.
14. OBLIGATIONS OF A CONTINUING NATURE. It is expressly understood
and agreed that the covenants, agreements and restrictions undertaken by or
imposed upon Executive and the Company hereunder, which are stated to exist
or continue after termination of Executive's employment with the Company,
shall exist and continue irrespective of the method or circumstances of such
termination for the respective periods of time set forth herein.
15. SEVERABILITY. The parties agree that if any of the covenants,
agreements or restrictions contained herein are held to be invalid by any
court of competent jurisdiction, the remainder of the other covenants,
agreements, restrictions and parts thereof herein contained shall be
severable so as not to invalidate any others, and such other covenants,
agreements, restrictions and parts thereof shall be given full effect without
regard to the invalid covenant, agreement, restriction or part thereof.
16. VENUE AND JURISDICTION. The Company and the Executive hereby
agree that any action, proceeding or claim against any of them arising out of
or relating in any way to this Agreement shall be brought and enforced in any
of the courts of the State of New York in New York County, New York, or the
United States District Court for the Southern District of New York, and
irrevocably submit to such jurisdiction. The Company and the Executive hereby
waive any objection to such jurisdiction and that such courts represent an
inconvenient forum. The Company and the Executive hereby waive the right to a
trial by jury in any action, proceeding or claim against either of them
arising out of or relating in any way to this Agreement. Any process or
summons to be served upon the Company or the Executive may be served by
transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to its or his respective address set
forth in Section 11 of this Agreement or such other address as a party may so
notify the other party hereto in the manner
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provided by Section 11 hereof. Such mailing shall be deemed personal service
and shall be legal and binding upon the Company and the Executive in any
action, proceedings or claim.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
JEH ACQUISITION CORP.
By: /s/ Douglas P. Fields
-------------------------------------
Douglas P. Fields,
Chief Executive Officer
/s/ Frederick M. Friedman
-------------------------------------
Frederick M. Friedman, Executive
ACKNOWLEDGED, CONSENTED TO
AND APPROVED
TDA INDUSTRIES, INC.
By: /s/ Douglas P. Fields
-------------------------------------
Douglas P. Fields,
President
PEMBERTON SERVICES CORP.
By: /s/ Douglas P. Fields
-------------------------------------
Douglas P. Fields,
President
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FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
FREDERICK M. FRIEDMAN
THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this "First
Amendment") is made effective as of the 30th day of April, 1998, by
JEH/EAGLE SUPPLY, INC., a Delaware Corporation, formerly known as JEH
Acquisition Corp. (the "Company"), and FREDERICK M. FRIEDMAN, an individual
resident in New York, New York (the "Executive"), amending that certain
Employment Agreement between the parties dated as of July 1, 1997 (the
"Agreement").
1. Section 3 (A) of the Agreement is amended in its entirety to
read as follows:
(A) SALARY. Commencing upon the closing of the proposed
initial public offering of securities of Eagle Supply Group, Inc., a
Delaware Corporation ("ESG"), and the consummation of the sale and
transfer of the Company to ESG, and during the remaining term of the
Agreement, the Company shall pay Executive, and Executive agrees to
accept, an annual salary of not less than Sixty Thousand Dollars
($60,000) per year, payable Five Thousand Dollars ($5,000) per month
in accordance with the Company's policies, for services rendered by
Executive hereunder.
2. Except for this First Amendment, the Agreement remains
unchanged, and is in full force and effect.
IN WITNESS WHEREOF, the parties have duly executed this First
Amendment as of the day and year first above written.
JEH/EAGLE SUPPLY, INC.
By: /s/ Douglas P. Fields, CEO
-------------------------------------
Douglas P. Fields,
Chief Executive Officer
/s/ Frederick M. Friedman
-------------------------------------
Frederick M. Friedman, Executive
ACKNOWLEDGED, CONSENTED TO
AND APPROVED
TDA INDUSTRIES, INC.
By: /s/ Douglas P. Fields, President
-------------------------------------
Douglas P. Fields,
President
PEMBERTON SERVICES CORP.
By: /s/ Douglas P. Fields, President
-------------------------------------
Douglas P. Fields,
President
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