Employment Agreement - Solon Automated Services Inc., Michael Stanky and Golder, Thoma, Cressey, Rauner Fund IV LP
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of July 1, 1995, between Solon Automated
Services, Inc., a Delaware corporation (the "Company"), Michael Stanky
("Executive"), and Golder, Thoma, Cressey, Rauner Fund IV, L.P. ("GTCR").
The execution and delivery of this Agreement by the Company and
Executive is a condition to the purchase of shares of SAS Acquisitions Inc.
Class A Common Stock, par value $0.01 per share, by GTCR. Certain provisions of
this Agreement are intended for the benefit of, and will be enforceable by,
GTCR.
The parties hereto agree as follows:
1. Employment. The Company agrees to employ Executive and Executive
accepts such employment, for the period from the date of this Agreement until
such employment is terminated at the will of Executive or in the discretion of
the Board (the "Employment Period").
(a) Duties. During the Employment Period, Executive shall serve as
Senior Vice President of the Company and shall have the normal duties,
responsibilities and authority assigned to him by the Board and the Company's
by-laws.
(b) Salary, Bonus and Benefits.
(i) Salary. During the Employment Period, the Company will pay
Executive a base salary (the "Annual Base Salary") as the Board may
designate from time to time, beginning at the rate of $150,000 per annum,
which amount shall be reviewed and may be increased, but not decreased,
annually by the Board in its sole discretion. Executive's Annual Base
Salary for any partial year will be prorated based upon the number of days
elapsed in such year.
(ii) Bonus. The Executive will be entitled to receive any Bonus
which the Chief Executive Officer of the Company may grant in his
discretion.
(iii) Benefits. During the Employment Period, Executive will be
entitled to benefits consistent with past practices, as well as to such
other benefits approved by the Board and made available to the Company's
senior management, in each
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case, as such benefits maybe adjusted by the Board from time to time.
(c) Severance. If the Employment Period is terminated by the Board
without Cause (and not by reason of Executive's death or disability or by the
Executive for Good Reason) and (i) no Event of Default has occurred and is
continuing, Executive shall be entitled to receive severance pay in an amount
equal to 1.5 times his Annual Base Salary then in effect payable in 18 equal
monthly installments, or (ii) an Event of Default has occurred and is
continuing, Executive shall be entitled to receive severance pay in an amount
equal to 1.0 times his Annual Base Salary then in effect payable in 12 equal
monthly installments, in each case (i) and (ii) subject to applicable
withholding tax requirements, commencing upon the execution by the Company and
Executive of a mutual release of the parties' respective rights, duties,
privileges and obligations hereunder other than those rights, duties, privileges
and obligations which are contemplated to continue beyond the Employment Period,
which release the parties hereby agree to use their reasonable good faith
efforts to secure.
(d) Limited Severance. If Executive terminates the Employment Period
for Good Reason, Executive shall be entitled to receive compensation in the
amount of one half of the severance benefit under paragraph 1(c)(i) or (ii)
above, depending on whether an Event of Default has occurred and is continuing,
payable over nine or six months, respectively.
(e) Effect of Termination on Bonuses and Benefits. All of
Executive's rights to fringe benefits and bonuses hereunder (if any) which
accrue after the termination of the Employment Period shall, except as otherwise
provided by law, cease upon such termination: provided, however, that Executive
shall continue to be entitled to medical benefits consistent with those provided
to Executive prior to termination during the period that severance payments are
being made to Executive pursuant to Sections 1(c) or (d). The Company may offset
the amounts of any outstanding loans, advances or other disbursements made to or
on behalf of the Executive by the Company against any amounts the Company owes
Executive hereunder for severance pay, benefits, bonuses or other items.
2. Confidential Information. Executive acknowledges that the
information, observations and data obtained by him during the course of his (i)
performance under this Agreement concerning the business and affairs of the
Company and its Affiliates and (ii) prior employment by the Company, and its
Affiliates and predecessor companies concerning the business and affairs of
those companies and its Affiliates will be the property of such entities.
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Therefore, Executive agrees that he will not disclose to any unauthorized person
or use for the account of any Person other than the Company and its Subsidiaries
any such information, observations or data ("Confidential information") without
the Board's written consent, unless and to the extent that the aforementioned
matters become generally known to and available for use by the public other than
as a result of Executive's acts or omissions to act and except as required by
law or legal process. Executive agrees to deliver to the Company at the
termination of his employment, or at any other time the Company may request in
writing, all memoranda, notes, plans, records, reports and other documents (and
copies thereof) relating to the business of the Company and its respective
Subsidiaries and Affiliates, and all acquisition prospects, lists and contact
information which he may then possess or have under his control.
3. Noncompetition and Nonsolicitation
(a) Noncompetition. Executive acknowledges that in the course of his
employment with the Company he will become familiar, and during his employment
with the Company prior the date of this Agreement he has become familiar, with
the Company's and its respective Subsidiaries' and Affiliates' (collectively,
the "Solon Group") trade secrets and with other confidential information
concerning the Solon Group, and that his services will be of special, unique and
extraordinary value to the Solon Group. Therefore, Executive agrees that, during
the Employment Period and for 1 year thereafter (the "Noncompete Period"), he
shall not directly or indirectly own, manage, control, participate in, consult
with, assist, render services for, or in any manner engage in any business
competing with, or otherwise substantially similar to, the businesses of the
Solon Group as such businesses exist or are in process on the date of the
termination of Executive's employment, (i) within the geographical area included
in the 50mile radius around each location of a customer of the Solon Group or
any business which a member of the Solon Group is actively considering acquiring
at the time of Executive's termination or has actively considered acquiring in
the last 12 months or (ii) within any State in the United States or any Province
in Canada in which Executive has spent a significant amount of time on behalf of
the Solon Group at any time during the twelve-month period prior to the date of
Executive's termination. The restrictions of this paragraph 3(a) shall not apply
to Executive's ownership interests in not more than three laundromats at any one
time.
(b) Nonsolicitation. During the Noncompete Period, Executive shall
not directly or indirectly through another entity (i) induce or attempt to
induce any employee of the Solon Group to leave the employ of the Solon Group,
or in any way interfere with
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the relationship between the Solon Group and any employee thereof, (ii) offer
employment to or hire any person who was an employee of the Solon Group at any
time during the one-year period prior to the termination of the Employment
Period, or (iii) induce or attempt to induce any customer, supplier, licensee or
other business relation of the Solon Group to cease doing business with the
Solon Group, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Solon Group.
(c) Enforcement. if, at the time of enforcement of paragraphs 2 or 3
of this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum duration, scope and geographical area reasonable under such
circumstances shall be substituted for the stated period, scope and area and
that the court shall be allowed to reduce the restrictions contained herein to
cover the maximum duration, scope and area permitted by law.
(d) Submission to Jurisdiction. Each of the parties (i) submits to
the jurisdiction of any state or federal court sitting in Chicago, Illinois in
any action or proceeding arising out of or relating to this Agreement, (ii)
agrees that all claims in respect of such action or proceeding may be heard or
determined in any such court and (iii) agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety or other
security that might be required of any other party with respect thereto. Each
party agrees that a final judgment in any action or proceeding so brought shall
be conclusive and may be enforced by suit on the judgment or in any other manner
provided by law.
4. Definitions.
"Affiliate" of any particular person or entity means any other
person or entity controlling, controlled by or under common control with such
particular person or entity.
"Cause" means (i) a material breach of any agreement with the
Company, its Subsidiaries, its Affiliates or its stockholders by Executive
(after notice and reasonable opportunity to cure), (ii) a breach of Executive's
duty of loyalty to the Company or any of its Subsidiaries or Affiliates or any
act of dishonesty, gross negligence, willful misconduct or fraud with respect to
the Company or any of its Subsidiaries or Affiliates or any of their
stockholders, customers or suppliers, (iii) the commission by
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Executive of a felony, a crime involving moral turpitude or other act or
omission tending to cause harm to the standing and reputation of, or otherwise
bring public disgrace or disrepute to, the Company or any of its Subsidiaries or
Affiliates, (iv) Executive's continued failure or refusal to perform any
material duty to the Company or any of its Subsidiaries or Affiliates which is
normally attached to his position (AFTER NOTICE and reasonable opportunity to
cure) or (v) Executive's gross negligence or willful misconduct in performing
those duties which are normally attached to his position (after notice and
reasonable opportunity to cure). For purposes of this Agreement, "Executive's
duty of loyalty to the Company or any of its Subsidiaries or Affiliates" shall
include the Executive's fiduciary obligation to place the interests of the
Company and its Subsidiaries or Affiliates ahead of his personal interests and
thereby not knowingly profit personally at the expense of the Company or any of
its Subsidiaries or Affiliates, and shall also include specifically the
affirmative obligation to disclose promptly to the Board any known conflicts of
interest Executive may have with respect to the Company, and its Subsidiaries or
Affiliates, and the negative obligations not to usurp corporate opportunities of
the Company, any of its Subsidiaries or any of its Affiliates, not to engage in
any "conflict-of-interest" transactions with the Company, its Subsidiaries, or
its Affiliates (without the approval of the board directors), and not to compete
directly with the Company or its Subsidiaries or Affiliates (without the
approval of the Board).
"Event of Default" means Event of Default as defined in the Loan
Agreement, dated as of the date hereof, among SAS Acquisitions Inc. and Finova
Capital Corporation (the "Loan Agreement"), or any payment by Speed Queen
Company pursuant to its guaranty in connection with the Loan Agreement, and any
similar term or event in any replacement for, refinancing of, or modification or
amendment to, such agreements.
"Good Reason" means a material diminution of Executive's duties
under this Agreement or Executive's own physical or mental disability. For
purposes of this Agreement, "disability" shall mean Executive's inability to
perform his duties hereunder in a competent manner on account of illness or
other physical or mental incapacity, if such illness or other physical or mental
incapacity continues for a period of more than three consecutive months, or an
aggregate of six months in any twelve-month period during the term hereof.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any
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contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a partnership, association or other business entity, a majority of
the partnership or other similar ownership interest thereof is at the time owned
or controlled, directly or indirectly, by any Person or one or more Subsidiaries
of that Person or a combination thereof. For purposes hereof, a Person or
Persons shall be deemed to have a majority ownership interest in a partnership,
association or other business entity if such Person or Persons shall be
allocated a majority of partnership, association or other business entity gains
or losses or shall be or control the managing director or general partner of
such partnership, association or other business entity.
5. Notices. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested) or sent by reputable overnight
courier service (charges prepaid) to each person at the address set forth below:
If to the Company:
Solon Automated Services, Inc.
330 Market Street Philadelphia,
Pennsylvania 19106
Attention: Chief Executive Officer
With a copy (which will constitute notice to the Company) to:
Anderson, Kill, Olick & Oshinsky, P.C.
1251 Avenue of the Americas
New York, New York 10020
Attention: Ronald S. Brody, Esq.
If to Executive:
Michael Stankey
1125 Ashington Place
Desoto, TX 75115
If to GTCR:
Golder, Thoma, Cressey, Rauner Fund IV, L.P.
6100 Sears Tower
Chicago, Illinois 60606
Attention: Bruce V. Rauner
David A. Donnini
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with a copy (which will not constitute notice to GTCR) to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Kevin R. Evanich, Esq.
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
6. General Provisions.
(a) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(b) Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith (i) embody the
complete agreement and understanding among the parties, (ii) supersede and
preempt any prior summaries of terms and conditions, understandings, agreements
or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way and (iii) terminate and cancel
any employment, severance, stack option, bonus or other employee benefit, loan,
tax or other indemnity agreement among Executive and his Affiliates, on one
hand, and the Company and its Affiliates, on the other hand.
(c) Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(d) Successors and Assigns. Except as otherwise provided herein,
this Agreement shall bind Executive and the Company and their respective
successors and permitted assigns and inure to the benefit of and be enforceable
by, Executive, the
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Company, GTCR and their respective successors and permitted assigns.
(E) CHOICE OF LAW. THE CORPORATE LAW OF THE STATE OF DELAWARE WILL
GOVERN ALL QUESTIONS CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS
STOCKHOLDERS. ALL OTHER QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND
INTERPRETATION OF THIS AGREEMENT AND THE EXHIBITS HERETO WILL HE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT
GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER
OF THE STATE OF ILLINOIS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF ILLINOIS.
(f) Remedies. Each of the parties to this Agreement will be entitled
to enforce its rights under this Agreement specifically, to recover damages and
costs (including attorney's fees) caused by any breach of any provision of this
Agreement and to exercise all other rights existing in its favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and, except as otherwise
provided in paragraph 3(d), that any party may in its sole discretion apply to
any court of law or equity of competent jurisdiction (without posting any bond
or deposit) for specific performance and/or other injunctive relief in order to
enforce or prevent any violations of the provisions of this Agreement.
(g) Amendment and Waiver. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended or modified only by
written agreement of the Company, Executive and GTCR. No other course of dealing
between the parties or third party beneficiaries hereof or any delay in
exercising any rights hereunder shall operate as a waiver of any rights of any
such holders.
(h) Survival of Representations and Warranties. All representations
and warranties contained herein or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, regardless of any
investigation made by Executive or on his behalf or by the Company or on its
behalf.
(i) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or holiday in the
state in which the Company's chief executive office is located, the time period
shall be automatically extended to the business day immediately following such
Saturday, Sunday or holiday.
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(j) Descriptive Headings: Interpretation. The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a
Section of this Agreement. The use of the word "including" in this Agreement
shall be by way of example rather than by limitation.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first written above,
Solon Automated Services, Inc.
By
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Its
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GOLDER, THOMA, CRESSEY, RAUNER
FUND IV, L.P.
By: GTCR IV, L.P.
Its: General Partner
By: Golder, Thoma, Cressey,
Rauner, Inc.
Its: General Partner
By:
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Its: Principal
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EXECUTIVE
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Michael Stanky