Exhibit 10.28
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“ Agreement ”), dated as of April 2, 2007,
is made by and between Keystone Automotive Holdings, Inc., a
Delaware corporation (the “ Company ”), and
Donald T. Grimes (“ Executive ”).
WHEREAS, the Company has offered,
and Executive has accepted, a position of employment with the
Company as the Company’s chief financial officer and
executive vice president.
NOW, THEREFORE, in consideration of
the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions . In this
Agreement:
“ Base Salary ”
has the meaning given to that term in Section 3(a)
.
“ Benefits ”
means, collectively, all of the employee benefit programs,
including, without limitation, medical and dental plans and
retirement plans, for which senior executive employees of the
Company and its Subsidiaries are generally eligible.
“ Board ” means
the Board of Directors of the Company.
“ Cause ” means
Executive (i) commits, or is charged with, a felony or other
crime involving moral turpitude; (ii) engages in willful
misconduct or fraud with respect to the Company or any of its
Subsidiaries or any of their customers or suppliers or an
intentional act of dishonesty or disloyalty in the course of his
employment; (iii) engages in the abuse of alcohol or illegal
drugs causing the Company or any of its Subsidiaries material
disrepute or economic harm or materially adversely affecting
Executive’s ability to perform his duties, responsibilities
and functions hereunder; (iv) refuses to perform his material
obligations under this Agreement (except in connection with a
Disability) as reasonably directed by the Board, which failure is
not cured within 15 days after written notice thereof to Executive;
(v) misappropriates one or more of the Company’s assets
or business opportunities; or (vi) breaches
Section 5 , 6 or 7 hereof which breach,
if capable of being cured, is not cured within 10 days after
written notice thereof has been delivered to Executive.
“ Disability ”
means Executive’s inability to perform the essential duties,
responsibilities and functions of his position with the Company and
its Subsidiaries for a continuous period of 180 days as a result of
any mental or physical disability or incapacity, as determined
under the definition of disability in the Company’s long-term
disability plan so as to qualify Executive for benefits under the
terms of that plan or as determined by an independent physician to
the extent no such plan is then in effect. Executive shall
cooperate in all respects with the Company if a question arises as
to whether he has become disabled (including, without limitation,
submitting to an examination by a medical doctor or other health
care specialists selected by the Company and authorizing such
medical doctor or such other health care specialist to discuss
Executive’s condition with the Company).
“ Employment Period
” means the period commencing on the date hereof and ending
on the Expiration Date or such earlier date as contemplated in the
proviso to Section 4(a) .
“ Expiration Date
” means the third anniversary of the date hereof;
provided , that if a written notice is not given by the
Company or Executive at least 90 days prior to such anniversary (or
any subsequent anniversary if this Agreement is extended) stating
that such party is electing to terminate the Employment Period,
then the Expiration Date will automatically be extended to the next
anniversary of the date hereof.
“ Expiration Year
” means the calendar year in which the Employment Period
expires.
“ Good Reason ”
means: (i) Executive’s compensation is reduced in a
manner not in accordance with the provisions for any such reduction
provided by this Agreement; (ii) Executive’s duties or
authority are changed, without his permission, in a manner
materially inconsistent with his role as chief financial officer
and executive vice president or they are adversely changed or
reduced; or (iii) there is otherwise a material breach of this
Agreement by the Company.
“ Non-Compete Period
” means the period commencing on the date hereof and ending
12 months after Executive’s termination of
employment.
“ Termination Year
” means the calendar year in which the Employment Period is
terminated.
“ Subsidiaries ”
means any corporation or other entity of which the securities or
other ownership interests having the voting power to elect a
majority of the board of directors or other governing body are, at
the time of determination, owned by the Company, directly or
through one of more Subsidiaries.
2. Employment, Position and
Duties .
(a) The Company shall employ
Executive and Executive hereby accepts employment with the Company,
upon the terms and conditions set forth in this Agreement, for the
Employment Period.
(b) During the Employment Period,
Executive shall serve as the chief financial officer and executive
vice president of the Company and shall perform the normal duties,
responsibilities and functions of the chief financial officer and
executive vice president of a company of a similar size and type
and shall have such power and authority as shall reasonably be
required to enable him to perform his duties hereunder, subject to
the power and authority of the Board to expand or limit such
duties, responsibilities, functions, power and authority and to
overrule actions of officers of the Company in a manner consistent
with the traditional responsibilities of such office.
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(c) During the Employment Period,
Executive shall (i) render such administrative, financial and
other executive and managerial services to the Company and its
Subsidiaries which are consistent with Executive’s position
as the Board may from time to time direct, (ii) report to the
Company’s chief executive officer and the Board, and devote
his best efforts and his full business time and attention (except
for permitted vacation periods and reasonable periods of illness or
other incapacity and except that Executive may, with the consent of
the Board (which consent shall not be unreasonably withheld) serve
as a director of an unrelated Person that is not engaged in a
Competing Business (as defined below)) to the business and affairs
of the Company and its Subsidiaries and (iii) submit to the
Board all business, commercial and investment opportunities
presented to Executive or of which Executive becomes aware which
relate to the business of the Company and its subsidiaries and
unless approved by the Board in writing, Executive shall not
pursue, directly or indirectly, any such opportunities on
Executive’s own behalf. Executive shall perform his duties,
responsibilities and functions to the Company and its Subsidiaries
hereunder to the best of his abilities in a diligent, trustworthy
and professional manner.
3. Compensation and Benefits
.
(a) During the Employment Period,
Executive’s base salary shall be a minimum of $325,000 per
annum (as increased or decreased in accordance with this Agreement
from time to time, the “ Base Salary ”), which
salary shall be payable by the Company in regular installments in
accordance with the Company’s general payroll practices in
effect from time to time. Executive’s Base Salary will be
subject to review and increase or decrease (but not below the Base
Salary in effect on the date of this Agreement) by the Board on or
about January 1 of each fiscal year during the Employment
Period. In addition, during the Employment Period, Executive shall
be entitled (i) to participate in all of the Benefits,
(ii) an automobile allowance of $150.00 per week, and
(iii) the home sale support package described in the offer
letter dated January 12, 2007 by and between Keystone
Automotive Operations, Inc. and Executive (the “ Offer
Letter ”).
(b) Executive shall be entitled to
fifteen (15) days of paid vacation each calendar year, which
will accrue in accordance with the Company’s vacation
policies in effect from time to time. Any vacation not taken in any
year may not be carried forward to any subsequent calendar year and
no compensation shall be payable in lieu thereof.
(c) During the Employment Period,
the Company shall reimburse Executive for all reasonable business
expenses incurred by him in the course of performing his duties,
responsibilities and functions under this Agreement which are
consistent with the Company’s policies in effect from time to
time with respect to travel, entertainment and other business
expenses, subject to the Company’s requirements with respect
to reporting and documentation of such expenses.
(d) In addition to the Base Salary,
following the end of each fiscal year during the Employment Period,
the Board shall award a bonus to Executive in an amount to be
determined by the Board (with a target of 70% of Executive’s
Base Salary in effect at the end of such fiscal year) based upon
Executive’s performance and the Company’s achievement
of operating targets established by the Board (or any compensation
committee thereof) in consultation with Executive at the beginning
of such fiscal year.
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(e) Executive will be indemnified
and defended for acts performed (or omissions made) in his capacity
as an officer or director of the Company to the fullest extent
specified in the Company’s certificate of incorporation and
bylaws and as permitted under Delaware law.
4. Termination and Payment
Terms .
(a) The Employment Period shall end
on the Expiration Date; provided , that (i) the
Employment Period shall terminate prior to such date immediately
upon Executive’s resignation, death or Disability and
(ii) the Employment Period may be terminated by resolution of
the Board, with or without Cause at any time prior to such date.
Except as otherwise provided herein, any termination of the
Employment Period by the Company shall be effective as specified in
a written notice from the Company to Executive.
(b) If the Employment Period is
terminated prior to the Expiration Date:
(i) (A) by resolution of the Board
(other than for Cause) or by Executive resigning for Good Reason,
(B) as a result of Executive’s death or Disability, or
(C) if the Employment Period expires on the Expiration Date,
Executive shall be entitled to receive (1) all previously
earned and accrued but unpaid Base Salary and vacation and unpaid
business expenses up to the date of such termination or the
Expiration Date, as applicable, (2) any bonus (if any) earned
by Executive for the fiscal year prior to the Termination Year or
the Expiration Year, as applicable, but then unpaid, (3) the
pro rata portion of Executive’s target bonus during the
Termination Year or the Expiration Year, as applicable, to the
extent targets thereunder are achieved for such year after such
termination or expiration, pro rated based on the number of days of
the Termination Year or the Expiration Year, as applicable, prior
to the date of termination or the Expiration Date, as applicable,
which payment shall be made when the bonus payments for such
Termination Year or the Expiration Year, as applicable, are
otherwise due; (4) severance pay in the full amount of Base
Salary at the time of termination or expiration from the date of
termination or the Expiration Date, as applicable, through the
period ending on the first anniversary of the date of termination
or the Expiration Date, as applicable, payable by the Company in
regular installments in accordance with the Company’s general
payroll practices in effect from time to time, and (5) full
continuation of Executive’s health, disability and life
insurance Benefits during the one year severance period (to the
extent any of those Benefits cannot be provided by Company during
the one year severance period, the Company will provide Executive
with a sum of money calculated to permit Executive to obtain the
same benefits individually, grossed up for tax purposes so that
Executive remains whole); or
(ii) for any other reason, including
as a result of Executive’s voluntary resignation for other
than Good Reason or by resolution of the Board for Cause,
Executive’s sole entitlement shall be to receive all
previously earned and accrued but unpaid Base Salary, vacation and
unpaid business expenses up to the date of such termination or
expiration and Executive shall not be entitled to any further Base
Salary, bonus payments or Benefits for that year or any future
year, except as required by law, or to any other severance
compensation of any kind.
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(c) Executive agrees that:
(i) Executive shall be entitled to the payments and services
provided for in Sections 4(b)(i)(3), 4(b)(i)(4), 4(b)(i)(5) and
4(b)(i)(6), if any, if and only if Executive has executed and
delivered the Release attached hereto as Exhibit A (the
“ Release ”) and seven (7) days have
elapsed since such execution without any revocation thereof by
Executive and Executive has not breached as of the date of
termination of the Employment Period the provisions of
Sections 5 , 6 and 7 hereof and does not
breach such sections or such covenants or any representation or
warranty or covenant in the Release at any time during the period
for which such payments or services are to be made; and
(ii) the Company’s obligation to make such payments and
services will terminate upon the occurrence of any such breach
during such period.
(d) Except as stated above, any
payments pursuant to Section 4(b) shall be paid by the
Company in regular installments in accordance with the
Company’s general payroll practices, and following such
payments the Company shall have no further obligation to Executive
pursuant to this Section 4 except as provided by law.
All amounts payable to Executive as compensation hereunder shall be
subject to all customary withholding, payroll and other taxes. The
Company shall be entitled to deduct or withhold from any amounts
payable to Executive any federal, state, local or foreign
withholding taxes, excise tax, or employment taxes imposed with
respect to Executive’s compensation or other payments or
Executive’s ownership interest in the Company (including,
without limitation, wages, bonuses, dividends, the receipt or
exercise of equity options and/or the receipt or vesting of
restricted equity).
(e) Executive hereby agrees that
except as expressly provided herein, no severance compensation of
any kind, nature or amount shall be payable to Executive and except
as expressly provided herein, Executive hereby irrevocably waives
any claim for severance compensation.
(f) Except as provided in
Sections 4(b)(i) and 4(b)(ii) above, all of
Executive’s rights to Benefits hereunder (if any) shall cease
upon the termination or expiration of the Employment
Period.
5. Confidential Information
.
(a) Executive acknowledges that the
information, observations and data (including trade secrets) that
will be obtained by him while employed by the Company concerning
the business or affairs of the Company and its Subsidiaries
(“ Confidential Information ”) are the property
of the Company or such Subsidiary. Therefore, Executive agrees
that, except as required by law or court order, including, but not
limited to, depositions, interrogatories, court testimony, and the
like, he shall not disclose to any unauthorized person or use for
his own purposes any Confidential Information without the prior
written consent of the Board, unless and to the extent that the
Confidential Information becomes generally known to and available
for use by the public other than as a result of Executive’s
acts or omissions. Executive shall deliver to the Company at the
termination or expiration of the Employment Period, or at any other
time the Company may request, all memoranda, notes, plans,
records,
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reports, computer tapes, printouts and software
and other documents and data (and copies thereof) embodying or
relating to the Confidential Information, Work Product (as defined
below) or the business of the Company and its Subsidiaries which he
may then possess or have under his control.
(b) Executive shall be prohibited
from using or disclosing any confidential information or trade
secrets that Executive may have learned through any prior
employment. If at any time during this employment with the Company
or any Subsidiary, Executive believes he is being asked to engage
in work that will, or will be likely to, jeopardize any
confidentiality or other obligations Executive may have to former
employers, Executive shall immediately advise the Board so that
Executive’s duties can be modified appropriately.
(c) Executive represents and
warrants to the Company that Executive took nothing with him which
belonged to any former employer when Executive left his prior
position and that Executive has nothing that contains any
information which belongs to any former employer. If at any time
Executive discovers this is incorrect, Executive shall promptly
return any such materials to Executive’s former employer. The
Company does not want any such materials, and Executive shall not
be permitted to use or refer to any such materials in the
performance o
