AMENDED AND RESTATED EMPLOYMENT AGREEMENTEmployment Agreement |
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Search Employment Agreement by:
Exhibit 10.27
AMENDED
AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and
Restated Employment Agreement (“Agreement”) is made and
entered into as of the 1st day of January, 2007, between DIRECTED ELECTRONICS,
INC., a Florida corporation (the “Company”), and JAMES E.
MINARIK (the “Executive”).
Recitals
A. The
Company is engaged in the business of designing and marketing consumer branded
vehicle security and convenience systems, marketing and selling certain
SIRIUS-branded satellite radio receivers and accessories, and supplying home
audio and mobile audio and video products (collectively, and as may be modified
by the Company from time to time, the “Business”).
B. The
Company and the Executive are parties to that certain Amended and Restated
Employment Agreement, dated as of January 1, 2004, as heretofore amended
(the “Prior Agreement”).
C. The
Company desires to continue to employ the Executive and the Executive desires
to continue to be employed by the Company, upon the terms and conditions set
forth in this Agreement.
Agreement
NOW THEREFORE, in
consideration of (i) the Executive’s employment with the Company,
(ii) the compensation paid to the Executive and the benefits provided to
the Executive in connection with such employment, (iii) the
Executive’s use of the equipment, supplies, facilities and other
resources of the Company, and (iv) the opportunity provided to the
Executive by the Company to acquire or use information relating to or based on
the Business and to work and develop in the field for which the Executive is
employed, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I
INTERPRETATION OF THIS AGREEMENT
1.1. Defined
Terms. As used herein, the following terms when used in this Agreement have
the meanings set forth below:
1.1.1.
“Affiliate” has the meaning set forth in Rule 12b-2 of
the regulations promulgated under the Securities Exchange Act of 1934, as
amended.
1.1.2.
“Base Salary” shall have the meaning given to it under
Section 2.2 of this Agreement.
1.1.3.
“Board” means the Board of Directors of the Company.
1.1.4.
“Cause” means (i) the failure by the Executive to
perform the Executive’s duties with the Company, as determined by the
Board (other than any such failure resulting from the Executive’s
incapacity due to physical or mental illness), which failure to perform is not
cured within 60 days after a written demand for substantial performance is
delivered to the Executive by the Board, (ii) the Executive’s
conviction of a felony involving deceit, fraud or moral turpitude or with
respect to which public knowledge thereof could result in a Material Adverse
Effect or materially affect the Executive’s ability to perform his
duties, (iii) the engaging by the Executive in conduct which the Board
determines is injurious to the Company, monetarily or otherwise, or which could
result in a Material Adverse Effect, (iv) the commission by the Executive
of an act or acts involving fraud, embezzlement, misappropriation, theft,
breach of fiduciary duty or dishonesty against the property or personnel of the
Company or any of its Affiliates, (v) the breach by the Executive of any
of the terms of this Agreement, which breach is not cured within 15 days after
written demand to cure such breach is delivered to the Executive by the Board.
1.1.5.
“Change of Control” means (i) any Person (other than
the Company or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company) is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended), directly or indirectly, of securities of the Company
representing more than 50% of the combined voting power of the Company’s
then outstanding securities eligible to vote, (ii) the merger or
consolidation of the Company with any other corporation or other business
entity, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; provided, however, that
a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person acquires more than 50% of
the combined voting power of the Company’s then outstanding securities
shall not constitute a Change of Control, or (iii) the sale or disposition
by the Company of all or substantially all of its assets.
1.1.6.
“Company” shall have the meaning given to it in the first
sentence of this Agreement.
1.1.7.
“Company Information” means Confidential Information and
Trade Secrets.
1.1.8.
“Confidential Information” means confidential data and
confidential information relating to the business of the Company (which does
not rise to the status of a Trade Secret under applicable law) which is or has
been disclosed to the Executive or of which the Executive became aware as a
consequence of or through his employment with the Company and which has value
to the Company and is not generally known to the competitors of the Company.
Confidential Information does not include any data or information that
(i) has been voluntarily disclosed to the general public by the Company
(other than by any act or omission of the Executive without the approval of the
Board), or (ii) otherwise enters the public domain through lawful means.
1.1.9.
“Disability” means the Executive’s inability to
perform his normal duties as a result of incapacity due to physical or mental
illness, for any 90 consecutive calendar day period or any 60 business days
(whether or not consecutive) during any 365 calendar day period.
1.1.10.
"Employment Period” shall have the meaning given to it
in Section 2.1 hereof.
1.1.11.
“Executive” shall have the meaning given to it in the first
sentence of this Agreement.
1.1.12.
“Good Reason” shall mean (a) the assignment to the
Executive of duties inconsistent with the Executive’s position (including
status, offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2.3 of this Agreement,
excluding for this purpose an isolated, insubstantial and inadvertent action
not taken in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive; or (b) the
Company’s requiring the Executive to be based at any office or location
more than 50 miles from Vista, California, except for travel reasonably
required in the performance of the Executive’s responsibilities.
1.1.13.
“Material Adverse Effect” shall mean a material adverse
effect on the business, assets, properties, results of operations, financial
condition or prospects of the Company or any of its Affiliates.
1.1.14.
“Non-Solicitation Period” shall mean a period of time equal
to (i) the Severance Period, if the Executive is terminated without Cause,
or (ii) a period of 12 months after the Termination Date if the
Executive resigns or if the Employment Period terminates for any reason other
than termination by the Company without Cause.
1.1.15.
“Notice of Termination” shall have the meaning given to it
in Section 2.1 hereof.
2
1.1.16.
“Person” means an individual, a partnership, a corporation,
a limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a governmental entity (or any
department, agency or political subdivision thereof).
1.1.17.
“Significant Competitor” has the meaning given to it in
Section 3.6 hereof.
1.1.18.
“Significant Customer” has the meaning given to it in
Section 3.6 hereof.
1.1.19.
“Subsidiary” when used with respect to any Person means any
other Person, whether incorporated or unincorporated, of which (i) more
than 50% of the securities or other ownership interests or (ii) securities
or other interests having by their terms ordinary voting power to elect more
than 50% of the board of directors or others performing similar functions with
respect to such corporation or other organization, is directly owned or
controlled by such Person or by any one or more of its Affiliates.
1.1.20.
“Termination Date” shall have the meaning given to it in
Section 2.1 hereof.
1.1.21.
“Trade Secrets” means information of the Company including,
but not limited to, technical or nontechnical data, formulas, patterns,
compilations, programs, financial data, financial plans, product or service
plans, business plans or lists of actual or potential customers or suppliers
that (i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy.
1.1.22.
“Welfare Plan Benefits” shall have the meaning given to it
in Section 2.4 hereof.
1.2. Interpretation.
The words “herein,” “hereof,” “hereunder”
and other words of similar import refer to this Agreement as a whole, as the
same from time to time may be amended or supplemented and not any particular
section, paragraph, subparagraph or clause contained in this Agreement.
Wherever from the context it appears appropriate, each term stated in either
the singular or plural shall include the singular and the plural, and pronouns
stated in masculine, feminine or neuter gender shall include the masculine,
feminine and the neuter.
ARTICLE
II
EMPLOYMENT
2.1. Duration.
The Company agrees to continue to employ the Executive and the Executive agrees
to be so employed until the first to occur of (i) January 1, 2010,
(ii) the date specified in a Notice of Termination given by the Executive
in connection with his voluntary resignation other than for Good Reason (which
shall not be less than 60 days from the date such Notice of Termination is
given), (iii) the date specified in a Notice of Termination stating that
the Board has determined that the Executive’s employment be terminated
for Cause, (iv) the date specified in a Notice of Termination given by the
Company stating that the Board has determined that the Executive’s
employment with the Company is no longer in the best interest of the Company
(in which event, the Executive will be entitled to severance pay as described
in Section 2.4 below) (termination pursuant to this clause (iv) is
sometimes referred to in this Agreement as “termination without Cause”),
(v) the date specified in a Notice of Termination given by the Executive
in connection with his resignation for Good Reason, (vi) the date of the
Executive’s death, or (vii) the date specified in a Notice of
Termination given by the Company in connection with a termination of the
Executive’s employment by reason of his Disability. For purposes of this
Agreement, the term “Employment Period” shall mean such
period of employment and the term “Termination Date” shall
mean the date on which the Employment Period terminates. Any purported
termination of the Executive’s employment by the Company or by the
Executive shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 4.1 below, which notice shall indicate
the specific termination provision in this Section 2.1 relied upon (a
“Notice of Termination”).
2.2. Salary
and Benefits. During the Employment Period, the Company will pay the
Executive a base salary at the rate of $550,000 per annum or at such higher
rate as the Board designates in its sole discretion from time to time (“Base
Salary”), payable in installments consistent with the Company’s
3
normal payroll schedule, subject to applicable
withholding and other taxes. Base Salary for each calendar year after calendar
2006 shall be increased by $25,000 over the previous calendar year so long as
the Company achieves EBITDAM equal to or greater than the Company’s
EBITDAM for the prior calendar year (i.e., (i) 2008 Base Salary shall be
$575,000 if 2007 EBITDAM is at least equal to 2006 EBITDAM, and (ii) 2009
Base Salary shall be increased by $25,000 from 2008 Base Salary if 2008 EBITDAM
is at least equal to 2007 EBITDAM). The Base Salary shall also be reviewed, at
least annually, for additional merit increases and may, by action and in the
discretion of the Board, be increased at any time and from time to time. During
the Employment Period, the Executive shall also be entitled to participate in
the following programs and receive the following benefits:






