1
EXHIBIT 10.24
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of this 1st day of June, 1999 (the
"Effective Date"), between LASON SYSTEMS, INC, a Delaware corporation, the
address of which is 0000 Xxxxxxxxxx Xxxxxxx, Xxxx, Xxxxxxxx, 00000
("Corporation"), and Xxxx X. Xxxxxx, whose address is 0000 Xxxx Xxxx Xxxxx,
Xxxxxxxxx Xxxxx, Xxxxxxxx 00000 ("Employee").
R E C I T A L S:
Corporation is engaged in the business of providing a wide range
of document management, records management and business communication services.
Employee is currently serving as Chairman of the Board and Chief Executive
Officer of Corporation, its parent, Lason, Inc., a Delaware corporation and of
its various affiliates.
Corporation and Employee are mutually desirous of extending
Employee's tenure for a 2 year period effective June 1, 1999.
The parties are desirous of entering into a contract of
employment on the terms and conditions set forth below.
THEREFORE, the parties agree as follows:
1. ENGAGEMENT OF EMPLOYEE. Corporation hereby employs Employee
for the term of this Agreement as set forth in Paragraph 4 and, during the term
of this Agreement, Employee agrees to provide the following services to
Corporation on the terms contained in this Agreement: Employee shall hold the
title of Chairman of the Board and Chief Executive Officer and shall be
responsible for providing the services customarily required of a Chief Executive
Officer including, but not limited to, direction of both Corporation's
day-to-day operations and its sales and marketing activities. Employee shall
devote his full time and attention to discharging the duties of his position and
shall report to Corporation's Board of Directors. For the purposes hereof, all
references to the term "Corporation" are understood to encompass Lason, Inc., a
Delaware corporation and its various affiliates; provided that it is understood
and agreed that Employee will be on the payroll of Lason Systems, Inc.
2. BASE COMPENSATION.
A. BASE SALARY. During the period of June 1, 1999 to May 31,
2000, Corporation shall pay to Employee a base salary of
1
2
Two Hundred Fifty Thousand ($250,000) Dollars. During the
period of June 1, 2000 to May 31, 2001, Corporation shall
pay to Employee a base salary of Two Hundred Seventy Five
Thousand ($275,000.00) Dollars. Such base salary shall be
paid in equal bi-weekly installments (less appropriate and
necessary withholdings for employment taxes), commencing on
Corporation's next regular pay day and continuing on the
same day of every other week thereafter during the term of
this Agreement.
B. BONUS. Predicated on Corporation's performance, Employee
shall be entitled to an annual bonus of a minimum of 50% of
the base salary set forth in Section 2(A) above. The amount
of the bonus shall be determined by Corporation's Board of
Directors.
C. BENEFITS. Employee shall have the right to receive or
participate in any fringe benefits, including, but not
limited to, personal days, group term life insurance
programs, disability insurance programs, medical expense
reimbursement plans, flexible benefit plans, so-called
qualified "pension or profit sharing plans," and other
reasonable and customary fringe benefits which may from
time-to-time be made available by Corporation's Board of
Directors (and further subject to any applicable
eligibility requirements of each such program). Further,
employee shall be entitled to an automobile allowance and
other similar benefits as determined by corporation's board
of directors.
3. STOCK OPTIONS. In addition to various stock options previously
granted to Employee, he shall be eligible to participate in Corporation's
various stock option plans as same may be in place from time to time, as
determined by Corporation's Board of Directors.
4. TERM AND SEVERANCE. The term of this Agreement shall be for
two (2) years from and after the Effective Date.
In the event that Employee is terminated during the term of this
Agreement with or without cause or in the event that he resigns because of a
material change in the scope of his duties or because of a change in control of
Corporation then, and in that event, Employee shall be entitled to receive
severance pay in an amount equal to his base salary plus his actual bonus for
the preceding
2
3
year or an imputed bonus of 50% of base salary if he is discharged or suffers a
material change in duty prior to a bonus being established for the prior year.
Such severance pay shall be paid for the unexpired term of this Agreement or 12
months, whichever is greater.
Additionally, in the event that Employee is terminated during the
term of this Agreement, with or without cause, or in the event that he resigns
because of a material change in his duties or because of a change in control of
Corporation, in addition to the severance pay arrangement described above, he
shall not be obligated to immediately re-pay any and all amounts advanced to him
prior to the date of termination under that certain Secured Promissory Note (the
"Note") dated June 5, 1998 and delivered by him to Lason, Inc. Rather, he shall
be entitled to enjoy the benefit of the full 10 year term of the Note which he
would have been entitled to had he remained in Corporation's employ through June
5, 2002.
Wherever used in this Agreement, the term "change in control"
shall have the meaning ascribed to it in Section 1.7 of Corporation's 1998
Equity Participation Plan (the "Plan"), which Plan is hereby incorporated herein
by reference for this purpose.
5. NON-COMPETITION/CONFIDENTIALITY. In consideration of the
compensation described in this Agreement, Employee agrees that while he is
employed by Corporation and should he elect to voluntarily leave Corporation's
employ prior to the expiration of the term of this Agreement (except in the
event of a material change in his duties or because of a change in control of
Corporation) then, and in that event, for the unexpired term of this Agreement,
(the "Non-Compete Period"), Employee shall not, either directly or indirectly
(and whether or not for compensation), work for, be employed by, own,
participate or engage in, or have any interest in, any person, firm, entity,
partnership, limited partnership, limited liability company, corporation or
business (whether as an employee, owner, partner, member, shareholder, officer,
director, agent, creditor, consultant or in any capacity which calls for the
rendering of personal services, advice, acts of management, operation or
control) that engages in activities in any of the counties in which Corporation
transacts business which are substantially the same as or competitive with the
activities engaged in by Corporation including but not limited to the following:
document management, records management and business communications, so long as
Corporation (or any successor) shall, directly or indirectly, be engaged in such
activity in such county. The foregoing shall not, however, be deemed to prevent
Employee from investing in any corporation the shares of which are traded on a
securities exchange or in the over-the-counter market.
3
4
Employee further agrees that he shall not, directly or
indirectly, at any time during the Non-Compete Period: (i) divert or attempt to
divert from Corporation any business of any kind in which Corporation is
engaged; (ii) take any action that causes the termination of a business
relationship between Corporation and any customer or supplier of Corporation; or
(iii) induce or attempt to induce any person who is an employee of Corporation
to leave the employ of Corporation.
During the term of this Agreement and the Non-Compete Period,
Employee shall keep secret and inviolate and shall not divulge, communicate, use
to the detriment of Corporation or for the benefit of any other person or
persons or misuse in any way any knowledge or information of a confidential
nature, including, without limitation, all trade secrets, information, computer
programs, technical data, customer lists and unpublished matters relating to the
business, assets, accounts, books, records, customers and contracts of
Corporation which he may or hereafter come to know as a result of his
association with and which is unique to Corporation ("Confidential
Information"). Information shall not be considered Confidential Information if:
(i) the information is known by or subsequently becomes generally available to
the public through no fault or breach on the part of Employee; (ii) the
information is independently developed by Employee without the use of any
Confidential Information; or (iii) the Employee rightfully obtains the
information after the term of this Agreement from a third party that has the
right to disclose it. Employee may disclose Confidential Information if required
by any judicial or governmental request, requirement or order; provided that
Employee will take reasonable steps to give Corporation sufficient prior notice
in order to contest such request, requirement or order.
Employee has had knowledge of the affairs, trade secrets,
customers, potential customers and other proprietary information of Corporation,
and Employee acknowledges and agrees that compliance with the covenants set
forth in this Paragraph 5 is necessary for the protection of the business,
goodwill and other proprietary interests of Corporation and that any violation
of this Agreement will cause severe and irreparable injury to the business,
goodwill and proprietary interests of Corporation, which injury is not
compensable by money damages. Accordingly, in the event of a breach (or
threatened or attempted breach) of this Paragraph 5, Corporation and any
successor shall, in addition to any other rights and remedies, be entitled to
immediate appropriate injunctive relief or a decree of specific performance,
without the necessity of showing any irreparable injury or special damages.
If, in any judicial proceeding, a court shall refuse to enforce
any of the covenants included herein, then said unenforceable covenant(s) shall
be deemed eliminated from these provisions for the purpose of those proceedings
to the extent necessary to permit the remaining separate covenants to be
enforced. It is the intent
4
5
and agreement of Corporation and Employee that these covenants be given the
maximum force, effect and application permissible under law.
The provisions of this Paragraph 5 shall survive the termination
of this Agreement.
6. MISCELLANEOUS. Employee shall not assign his rights and
obligations hereunder. Corporation may assign its rights and obligations
hereunder with the consent of Employee which consent shall not be unreasonably
withheld. Subject to the foregoing, all of the terms and conditions of this
Agreement shall be binding upon and shall inure to the benefit of the heirs,
successors, administrators, legal representatives and assigns, as the case may
be, of the parties hereto.
7. PARTIAL INVALIDITY. If any provision of this Agreement is held
by a court of competent jurisdiction to be invalid, void or unenforceable in any
manner, the remaining provisions of this Agreement shall nonetheless continue in
full force and effect without being impaired or invalidated in any way. In
addition, if any provision of this Agreement may be modified by a court of
competent jurisdiction such that it may be enforced, then that provision shall
be so modified and as modified shall be fully enforced.
8. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter contained
herein, supersedes all prior and contemporaneous agreements, understandings and
negotiations, and any and all employment agreement(s) between Corporation and
Employee dated prior to the date hereof (including, but not limited to, that
certain letter agreement dated July 29, 1998); and no evidence of prior or
contemporaneous agreements, understandings and negotiations shall govern or be
used to construe or modify this Agreement. Except as provided in this Agreement,
no modification or alteration hereof shall be deemed effective unless in writing
and signed by the parties hereto. Neither this Agreement nor any of its
provisions may be changed, waived, or discharged orally, but only by an
instrument duly signed by the party against which enforcement of the change,
waiver, or discharge is sought.
9. NOTICES. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be in writing
and shall be deemed given (a) when personally delivered or sent by facsimile
transmission to the party to be given the notice or other communication or (b)
on the business day following the day such notice or other communication is sent
by overnight courier to the addresses set forth above or at such other address
as either party may designate from time to time by appropriate notice to the
other.
5
6
10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan.
11. HEADINGS. The headings in this Agreement are for reference
only and shall not limit or otherwise affect any of the terms or provisions
hereof.
12. COUNTERPARTS. This Agreement may be executed in two (2) or
more counterparts, each of which shall be considered an original, but all of
which together shall constitute one and the same instrument.
THIS AGREEMENT was executed as of date and year first set forth
above.
"CORPORATION"
LASON SYSTEMS, INC., a Delaware
corporation
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxx X. Xxxxxxx
Its:Member of Compensation Committee
"EMPLOYEE"
/s/ Xxxx X. Xxxxxx
-------------------------------------------
XXXX X. XXXXXX
6
