Employment Agreement between Keystone Automotive Industries, Inc. and John M. Palumbo dated December 1, 1999

Summary

This agreement is between Keystone Automotive Industries, Inc. and John M. Palumbo, who is employed as Vice President and Chief Financial Officer. The contract outlines Mr. Palumbo’s duties, compensation, and benefits, including salary, bonus eligibility, participation in benefit plans, and vacation. It specifies a three-year term, with automatic two-year renewals unless either party gives notice. The agreement also details conditions for early termination, such as mutual agreement, disability, breach, or company decision, and includes provisions for confidentiality and post-termination obligations.

EX-10.4 3 0003.txt EMPLOYMENT AGREEMENT DATED DECEMBER 1, 1999 Exhibit 10.4 EMPLOYMENT AGREEMENT -------------------- THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and effective as of December 1, 1999, by and between KEYSTONE AUTOMOTIVE INDUSTRIES, INC., a California corporation (the "Company") and John M. Palumbo (the "Employee"), with respect to the following facts: A. The Company desires to be assured of the continued association and services of the Employee in order to take advantage of his experience, knowledge and abilities in the Company's business, and is willing to employ the Employee, and the Employee desires to be so employed, on the terms and conditions set forth in this Agreement. B. The Employee from time to time in the course of his employment may learn trade secrets and other confidential information concerning the Company, and the Company desires to safeguard such trade secrets and confidential information against unauthorized use and disclosure. ACCORDINGLY, on the basis of the representations, warranties and covenants contained herein, the parties hereto agree as follows: 1. EMPLOYMENT ---------- 1.1 Employment. The Company hereby employs the Employee as ---------- aVice President and the Chief Financial Officer and the Employee hereby accepts such employment, on the terms and conditions set forth below, to perform during the terms of this Agreement such services as are required hereunder. 1.2 Duties. The Employee shall render such services to the ------ Company, and shall perform such duties and acts, as reasonably may be required by the Board of Directors and/or the Chief Executive Officer of the Company in connection with any aspect of the Company's business. 1.3 Service to Others. The Employee shall devote his entire ----------------- productive time, ability and attention to, and shall diligently and conscientiously use his best efforts to further, the Company's business, and shall not, without the prior written consent of the Company's Board of Directors in each instance, perform services of any kind, whether or not for compensation, for any person other than the Company, which services, in the sole opinion of the Company's Board of Directors, might materially interfere with the performance of his duties hereunder. 1 2. COMPENSATION ------------ 2.1 Compensation. As the total consideration for the services ------------ which the Employee renders hereunder, the Employee shall be entitled to the following: (a) an annual salary of $175,000 subject to such periodic increases, if any, as the Company's Board of Directors may deem to be appropriate in its sole discretion, less income tax and other applicable withholdings, payable in weekly, bi-monthly or monthly installments as may be agreed between the Employee and the Company; (b) an annual bonus in such amount and upon the realization of such performance criteria as may be established from time to time by the Company's Board of Directors, less income tax and other applicable withholdings; (c) participation in all benefit plans or programs sponsored by the Company for executive officers in general, including, without limitation, participation in any group health plan, medical reimbursement plan, dental plan, disability insurance plan, life insurance plan and pension and profit sharing plan; (d) reimbursement of any and all reasonable and documented expenses incurred by the Employee from time to time in the performance of his duties hereunder; (e) two weeks paid vacation per year, at such time or times as the Company's Board of Directors may authorize, and all paid holidays observed by the Company; provided, however, that such vacation shall be taken -------- annually and shall not cumulate from year to year; and (f) the use of an automobile substantially similar to that currently provided by the Company to the Employee, together with reimbursement of all expenses for insurance, fuel and maintenance. 2.2 Illness. Subject to the limitations contained in Section ------- 3.2(c) and 3.3(i) of the Agreement, if the Employee shall be unable to render the services required hereunder on account of personal injuries or physical or mental illness, he shall continue to receive all payments provided in this Agreement; provided, however, that any such payments may, at the sole option of --------- the Company, be reduced by any amount that the Employee receives for the period covered by such payments as disability compensation under insurance policies, if any, maintained by the Company or under government programs. 2 3. TERM OF EMPLOYMENT AND TERMINATION ---------------------------------- 3.1 Term. Unless sooner terminated pursuant to Section 3.2 of ---- this Agreement, the term of employment under this Agreement shall be for a period commencing on December 1, 1999 and ending on the third anniversary date thereof; provided, however, that such term of employment automatically shall be -------- renewed for successive two (2) year terms unless written notice of termination is given by either the Company or the Employee not less than ninety (90) days prior to the end of the initial term or any subsequent two (2) year term. 3.2 Termination. Employment under this Agreement shall ----------- terminate prior to the expiration of its term upon the happening of any of the following events: (a) the mutual agreement of the Company and the Employee; (b) the death of the Employee; (c) at the Company's option if, in the reasonable judgment of the Company's Board of Directors, the Employee has become so physically or mentally disabled as to be incapable of substantially performing his duties hereunder for a period of six (6) consecutive months or an aggregate of 180 days in any twelve (12) month period; (d) at the Company's option, in the event of (i) a material breach of this Agreement by reason of the Employee's continued and willful failure or refusal to substantially perform his duties in accordance with this Agreement or (ii) the conviction of the Employee of a felony or of a misdemeanor involving financial impropriety or (iii) a material breach of the Employee's fiduciary duty to the Company; provided, however, that no termination shall -------- occur under clause (i) unless the Employee first shall have received written notice specifying the acts or omissions alleged to constitute such breach and, if such breach can be corrected, it continues after the Employee shall have had reasonable opportunity to correct it; (e) at the Employee's option, in the event of (i) a material breach of this Agreement by the Company or (ii) the assignment to the Employee of duties inconsistent with his status as a Vice President and the Chief Financial Officer of the Company or (iii) a substantial alteration in the Employee's reporting responsibility, title or office or (iv) a move of the Company's principal executive offices outside the County of Los Angeles; provided, however, that no termination shall occur under clause (i) unless the - -------- Company first shall have received written notice specifying the acts or omissions alleged to constitute such breach and, if such breach can be corrected, it continues after the Company shall have had a reasonable opportunity to correct it; or (f) at the Company's option by resolution of the Board of Directors for any reason whatsoever without cause. 3 3.3 Duties Upon Termination. In the event that employment under ----------------------- this Agreement is terminated, whether at the expiration of the initial term or any subsequent two (2) year term or prior thereto pursuant to Section 3.2 of this Agreement, neither the Company nor the Employee shall have any remaining duties or obligations hereunder, except that (i) the Company shall pay to the Employee, or his estate, such compensation as is due pursuant to Section 2.1, prorated through the date of termination, (ii) the Employee shall continue to be bound by Section 4 of this Agreement and (iii) in the event that such termination shall occur pursuant to Section 3.2(a), (b), (c), (e) or (f) of this Agreement or in the event that the Company terminates this Agreement under Section 3.1 hereof effective at the end of the initial term or any renewal term, except for any such termination for any reason described in Section 3.2(d) hereof, the Company shall pay to the Employee, or his estate, such compensation as would otherwise be due pursuant to Sections 2.1(a) and (c) during such initial term or renewal term. 4. TRADE SECRETS -------------- 4.1 Trade Secrets. The Employee shall not, without the prior ------------- written consent of the Company's Board of Directors in each instance, disclose or use in any way, during the term of his employment by the Company and for one (1) year thereafter, except as required in the course of such employment, any confidential business or technical information or trade secret of the Company acquired in the course of such employment, whether or not patentable, copyrightable or otherwise protected by law, and whether or not conceived of or prepared by him (collectively, the "Trade Secrets") including, without limitation, any information concerning designs, patterns, customer lists, products, procedures, operations, information concerning designs, patterns, customer lists, products, procedures, operations, investments, financing, costs, employees, purchasing, accounting, marketing, merchandising, sales, salaries, pricing, profits and plans for future development, the identity, requirements, preferences, practices and methods of doing business of specific parties with whom the Company transacts business, and all other information which is related to any product, service or business of the Company, other than information which is generally known in the industry in which the Company transacts business or is acquired from public sources; all of which Trade Secrets are the exclusive and valuable property of the Company. 4.2 Tangible Items. All files, accounts, records, documents, -------------- books, forms, notes, reports, memoranda, studies, compilations of information, correspondence and all copies, abstracts and summaries of the foregoing, and all other physical items related to the Company, other than a merely personal item, whether of a public nature or not, and whether prepared by the Employee or not, are and shall remain the exclusive property of the Company and shall not be removed from the premises of the Company, except as required in the course of employment by the Company, without the prior written consent of the Company's Board of Directors in each instance, and the same shall be promptly returned to the Company by the Employee on the expiration or termination of his employment by the Company or at any time prior thereto upon the request of the Company. 4 4.3 Solicitation of Employees. During the term of his ------------------------- employment by the Company and for one (1) year thereafter (such period not to include any period of violation hereof by the Employee or period which is required for litigation to enforce this paragraph and during which the Employee is in violation hereof), the Employee shall not, directly or indirectly, either for his own benefit or purposes or the benefit or purposes of any other person, employ or offer to employ, call on, solicit, interfere with or attempt to divert or entice away any employee of the Company in any capacity if that person possesses or has knowledge of any Trade Secrets of the Company. 4.4 Injunctive Relief. The Employee hereby acknowledges and ----------------- agrees that it would be difficult to fully compensate the Company for damages resulting from the breach or threatened breach of this Section 4 and, accordingly, that the Company shall be entitled to seek temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce such provisions without the necessity of proving actual damages and without the necessity of posting any bond or other undertaking in connection therewith. This provision with respect to injunctive relief shall not, however, diminish the Company's right to claim and recover damages. 4.5 "Company". For the purposes of this Section 4 of this --------- Agreement only, the term "Company" shall mean collectively Keystone Automotive Industries, Inc., a California corporation, and its successors, assigns and nominees, and all individuals, corporations and other entities that directly, or indirectly through one or more intermediaries, control or are controlled by or are under common control with any of the foregoing. 5. MISCELLANEOUS ------------- 5.1 Severable Provisions. The provisions of this Agreement are -------------------- severable, and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions, and any partially unenforceable provisions to the extent enforceable, shall nevertheless be binding and enforceable. 5.2 Successors and Assigns. All of the terms, provisions and ---------------------- obligations of this Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective heirs, representatives, successors and assigns. Notwithstanding the foregoing, neither this Agreement nor any rights hereunder shall be assigned, pledged, hypothecated or otherwise transferred by the Employee without the prior written consent of the Company in each instance. 5.3 Governing Law. The validity, construction and ------------- interpretation of this Agreement shall be governed in all respects by the laws of the State of California applicable to contracts made and to be performed within that State. 5 5.4 Arbitration. At the demand of either party any dispute ----------- arising out of this Agreement shall be resolved through binding arbitration. Unless the parties agree on a different arbitration procedure, arbitration shall take place under the Expedited Labor Arbitration Rules of the American Arbitration Association of Los Angeles County, California. The decision of the Arbitrator shall be final and binding on both parties. 5.5 Headings. Section and subsection headings are not to be -------- considered part of this Agreement and are included solely for convenience and reference and in no way define, limit or describe the scope of this Agreement or the intent of any provisions hereof. 5.6 Entire Agreement. This Agreement constitutes the entire ---------------- agreement between the parties hereto pertaining to the subject matter hereof, and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, relating to the subject matter of this Agreement. No supplement, modification, waiver or termination of this Agreement shall be valid unless executed by the party to be bound thereby. No waiver of any of the provisions of this Agreement shall be deemed to or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expresssly provided. 5.7 Notice. Any notice or other communication required or ------ permitted hereunder shall be in writing and shall be deemed to have been given (i) if personally delivered, when so delivered, (ii) if mailed, one (1) week after having been placed in the United States mail, registered or certified, postage prepaid, addressed to the party to whom it is directed at the address set forth below or (iii) if given by telex or telecopier, when such notice or other communication is transmitted to the telex or telecopier number specified below and the appropriate answerback or telephonic confirmation is received. Either party may change the address to which such notices are to be addressed by giving the other party notice in the manner herein set forth. 5.8 Attorneys' Fees. In the event any party takes legal action --------------- to enforce any of the terms of this Agreement, the unsuccessful party to such action shall pay the successful party's expenses, including attorneys' fees, incurred in such action. 5.9 Third Parties. Nothing in this Agreement, expressed or ------------- implied, is intended to confer upon any person other than the Company or the Employee any rights or remedies under or by reason of this Agreement. 6 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first set forth above. KEYSTONE AUTOMOTIVE INDUSTRIES, INC. By /s/Charles J. Hogarty ------------------------------------ Charles J. Hogarty, President 700 East Bonita Avenue Pomona, California 91767 Facsimile: (909) 624-9136 /s/John M. Palumbo ------------------------------------ JOHN M. PALUMBO 14049 Mar Vista Whittier, California 90602 7