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Exhibit 10.13
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is executed and effective as of the 1st
day of June, 1998, by and between XXX XXXXXXXX an individual ("Employee"), and
WAREFORCE INCORPORATED, a California corporation (the "Company"), with reference
to the following facts:
Employee is an individual possessing unique management and executive talents of
value to the company and has been the Vice President of Administration and
General Counsel of the Company.
The Company desires to continue the employment of Employee as the Vice President
of Administration and General Counsel, and Employee desires to accept such
employment, all on the terms and conditions set forth in this Agreements.
AGREEMENT
In consideration of the foregoing recitals and of the covenants and agreements
herein, the parties agree as follows:
1. The Company hereby engages Employee to perform the duties and render
the services set forth in Sections 2 for a period commencing on June 1,
1998 (the "Start Date") and ending on the third anniversary of such
date, (the "Employment Period") and Employee hereby accepts said
employment and agrees to perform such services during the Employment
Period. Unless this Agreement is terminated pursuant to Section 4 or
unless either party gives the other written notice to the contrary at
least six (6) months prior to an expiration date, this Agreement,
together with any changes which have occurred during the employment
period then expiring, shall automatically renew at the end of an
Employment Period for an additional one (1) year employment period.
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2. DUTIES
2.1. VICE PRESIDENT OF ADMINISTRATION AND GENERAL COUNSEL: Performing
executive work of major importance to the Company, with the primary
focus being the profitable management and profitable growth of the
Company as a whole. During the Employment Period, Employee shall devote
his full business time and attention to performing his duties as Vice
President of Administration and General Counsel of the Company. He
shall 1) administer all Human Resources functions of the Company,
including, but not limited to administration of its employee benefits
programs as well as its regulatory compliance in the human resources
area; 2) manage the overall direction coordination, and evaluation of
the administrative areas of the Company; 3) administer all Legal
functions of the Company, including, but not limited to, contract
review and drafting, corporate record keeping; advice and counsel to
the Company's Board, officers and employees; 4) assist in mergers and
acquisitions; 5) assist the CEO in formulating and administering
Company policies; 6) review and analyze the activities and operations
of the Company to define and to track their progress toward achieving
their goals and objectives in his related functional areas; 7) carry
out supervisory responsibilities in accordance with Company policies,
and applicable laws; 8) interview, hire and train managers and staff in
his functional areas; 9) plan, assign and direct the work of managers
and staff, appraise their performance, and reward and discipline them,
and address their complaints in his functional areas; 10) submit all
required documentation in a timely and accurate manner. The above
description of duties is non-exhaustive. Employee shall work out of the
Company's headquarters location and shall report to Company" Chief
Executive Officer. Employee recognizes that the Board of Directors of
the Company may be required under its fiduciary duty to the Company and
to its stockholders to eliminate such position or to appoint a
different person as such officer of this Company. The parties agree
however, that any such elimination or replacement of Employee by the
Company, other than pursuant to Section 4.2.1 or 4.3.2.
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hereof, shall constitute a termination of Employee's employment
hereunder by the Company without cause.
2.2. CHANGE OF CONTROL. If the Company or a significant portion thereof is
sold or merged or undergoes a change of control transaction (as defined
in the Company's Stock Option Agreement, a copy of which is attached
hereto as Exhibit A), this Agreement shall survive consummation of such
transaction and shall continue in effect for the remainder of the
Employment Period, but Employee shall serve as an officer of the entity
which succeeds to the business or a substantial portion of the business
of the Company, and is such case shall bear a suitable title and
perform the duties and functions of such office of such publicly traded
or privately held successor, consistent with those customarily
performed by an officer of such a unit, division or entity comparable
to the then business of the Company, unit, division or entity. Employee
may be required to accept greater or lesser responsibility by any
successor, and agrees to fully cooperate and assist in any resulting
transition for up to the remainder of the Employment Period; and any
adjustments required of Employee to complete the transition to any
successor, unit, division or entity, shall not violate this Agreement
so long as "good reason" does not arise under Sections 4.6.2(ii), (iii)
or (v). This Agreement shall apply to the automatic modification in
duties resulting from such transaction as set forth above, however,
notwithstanding the foregoing, Employee any exercise any "good reason"
rights he may have under Section 4.6.2(iv).
2.3. CONFLICT OF INTEREST. Employee agrees that during the term of
employment Employee will not, directly or indirectly, compete with the
Company in any way, or usurp an Company opportunity in any way, nor
will employee act as an officer, director, employee, consultant,
shareholder, lender or agent of any entity which is engaged in
any business in which the Company is now engaged or in which the
Company becomes engaged during the term of employment. The Company is
now engaged in
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the business of reselling computer hardware, software and peripherals,
primarily to corporate and governmental accounts, and in the business
of selling computer systems consulting, help and maintenance services,
also primarily to corporate, education and governmental accounts. The
Company is not now engaged in the business of manufacturing computers
or their primary components, nor is it now in the business of reselling
computers to non-end users. The Company may become engaged in the
business of final assembly of computers and may become engaged in the
business of catalog, mail-order or internet sales of computer hardware,
software and peripherals. Employee also agrees that during the term of
employment, Employee will not, directly or indirectly, whether on his
own behalf or on behalf of another, offer employment or a consulting
assignment to any Company employee, nor will Employee, nor Employee's
employer, directly or indirectly, whether on his own behalf or on
behalf of another, actually employ or grant a consulting assignment to
any Company employee. Employee also agrees that during the term of
employment Employee will not, directly or indirectly, whether on his
own behalf or on behalf of another, contact or solicit any of Company's
clients to do business with any entity other than Company.
2.4. During the term of employment with the Company, Employee may have
access to and become acquainted with information of a confidential,
proprietary or secret nature which is or may be either applicable or
related to present or future business of the Company, its research and
development, or the business of its customers. For example, trade
secret information includes, but is not limited to devices, secret
inventions, processes and compilations of information, records,
specifications and information concerning customers or vendors.
Employees shall not disclose any of the above-mentioned trade secrets,
directly or indirectly or use them in any way, either during the term
of this agreement of at any time
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thereafter, except as required in the course of employment with the
Company.
2.5. Employee agrees that all customers of the Company, for which the
Employee has or will provide services during the Employee's employment
by the Company, and all prospective customers from whom the Employee
has solicited business while in the employ of the Company, shall be
solely the customers of the Company.
2.6. Employee agrees that, for a period of twelve (12) months immediately
following the termination of employment with the Company, Employee
shall neither directly nor indirectly solicit business as to products
or services competitive with those of the Company, from any of the
Company's customers with whom the Employee had contact within twelve
(12) months prior to the Employee's termination.
2.7. Employee further agrees that for a period of twelve (12) months after
termination of employment, Employee will not directly or indirectly
induce or solicit any of Company's employees to leave their employment.
3. COMPENSATION. As compensation for his services to be performed
hereunder, the Company shall provide Employee with the following
compensation and benefits:
3.1 BASE SALARY. Employee's base salary shall be $100,000.00 per
year, subject to an annual increase (if any) in the sole
discretion of the Board, payable in accordance with the
Company's payroll practices as in effect from time to time,
and subject to such withholding as is required by law.
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3.2 BONUSES.
3.2.1. Employee shall receive a $10,000.00 signing bonus
upon the Company's completion of an Initial Public
Offering, Reverse Merger or other similar public
financing, subject to such withholding as is required
by law.
3.2.2. Employee shall receive an annual bonus of $50,000.00
should the Company achieve at least 90% of the goals
set by the Company's Board of Directors for the
Employee for the year. If any bonus is declared or
paid, it shall be subject to such withholding as is
required by law.
3.3. BENEFITS.
3.3.1. VACATION. Employee shall be entitled to vacation time
as been accrued each pay period since his date of
first hire, less any vacation taken in such amounts
and under such conditions as normally afforded to the
Company's executives. In the event Employee does not
use such vacation, he shall receive, upon termination
of the Employment Period, vacation pay for all unused
vacation calculated as having accrued at the
applicable base salary for each relevant period of
his employment. However, Employee shall endeavor to
take vacation time in the year in which it is
allocated to him.
3.3.2. BUSINESS EXPENSES. The Company shall reimburse
Employee for reasonable business expenses incurred by
Employee in the course of performing services for the
company and in compliance with procedures established
from time to time by the Company. This reimbursement
shall occur on a monthly basis, and is subject to
Employee providing original documentation in support
of all business expenses reimbursement sought.
3.3.3. STOCK OPTIONS. Company shall grant Employee incentive
stock options on the same terms as
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granted to its senior executives (excluding the
Company's Chief Executive Officer). The issuance of
options is subject to approval by the Company Board
of Directors Compensation Committee.
3.3.4. OTHER BENEFITS. Company shall provide Employee with
employment benefits as 401(k) participation,
automobile allowance, medical insurance and
disability insurance, on the terms and to the extent
generally provided by the Company to its senior
executive employees. The amount of automobile
allowance provided by the Company to Employees shall
be $500.00 per month.
3.4 OTHER PERSONS. The parties understand that other officers and
employees may be afforded payments and benefits and employment
agreements which differ from those of Employee in this
agreement; but Employee's compensation and benefits shall be
governed solely by the terms of this Agreement, which shall
supersede all prior understandings or agreements between the
parties concerning terms and benefits of employment of
Employee with the Company. Other officers or employees shall
not become entitled to any benefits under this Agreement.
4. TERMINATION.
4.1. TERMINATION BY REASON OF PERMANENT DISABILITY. The Employment
Period shall terminate upon the permanent disability (as
defined in Section 4.6.3 below) of Employee.
4.2. TERMINATION BY COMPANY
4.2.1. The Company may terminate the Employment Period for
"cause" by seven (7) days advance written notice to
Employee. However, no such advance written notice
shall be given if the Company determines that the
Company or a person would
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suffer irreparable harm should the Employee be given
notice.
4.2.1.1. For such termination for "cause", the
employee shall have a ninety (90) day period
from the date of the written notice to cure
such "cause". However, this cure period
shall not apply to termination's wherein the
Company's Board of Directors determines that
the Company would suffer irreparable harm
should the Employee be given the right to
cure.
4.2.2. The Company may terminate the Employment Period for
any other reason, with cause other than those
described in Section 4.6.1 or without cause, by
thirty (30) days advance written notice.
4.3 TERMINATION BY EMPLOYEE
4.3.1. Employee may terminate the Employment Period for
"good reason" (as defined in section 4.6.2 below) at
any time by written notice to the company.
4.3.2. Employee may terminate the Employment Period for any
other reason by thirty (30) days advance written
notice to the Company.
4.4 SEVERENCE PAY
4.4.1 In the event the Employment Period is terminated by
the Company for any reason other than pursuant to
Section 4.2.1 or Section 4.3.2 hereof or if the
Employment Period is terminated because of a
permanent disability of Employee pursuant to Section
4.1, upon the effectiveness of any such termination,
the Company shall be obligated to pay to the employee
(or his executors, administrators
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or assigns, as the case may be) all unpaid salary,
benefits and bonuses (if any) accrued through the
date of effectiveness of such termination and, in
addition, a cash severance payment equal to eighteen
(18) month's total base salary at the rates set forth
herein, and such other benefits as may be required by
law.
4.4.2 In addition, all stock options and general stock
appreciation rights granted by the Company to
Employee which otherwise would have vested within
eighteen (18) months following the Date of
Termination for death or disability shall accelerate
and become fully vested and exercisable on the Date
of Termination for death or disability, and shall
remain exercisable for a period ending on the normal
expiration date specified in the option agreements.
4.4.3. In the event the Employment period is terminated by
the Company pursuant to Section 4.2.1 hereof, or the
Employment Period is terminated by Employee pursuant
to Section 4.3.2 hereof, the Company shall have no
obligation to pay any severance pay to Employee. The
Company shall, however, be obligated to pay to
Employee (or executors, administrators or assigns, as
the case may be) all unpaid salary, benefits and
bonuses (if any) accrued through the date of
termination and shall provide such other benefits as
may be required by law.
4.5 TERMINATION BENEFITS. In the event of termination of the
employment Period pursuant to Section 4.2 or 4.3.1, the
Company shall provide Employee, Employee's spouse or domestic
partner and children, if any, with such normal medical
insurance, on the terms and to the extent generally provided
by the Company to its executive employees on the level
comparable to
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Employee, for a period of one year from the date of the
termination of the Employment Period.
4.6 CERTAIN DEFINITIONS. For purposes of this Agreement:
4.6.1. The term "cause" shall mean those acts identified in
Section 2924 of the California Labor Code, as that
section exists on October 1, 1997, to wit, any
willful breach of duty by the Employee in the course
of his employment, or in case of his habitual neglect
of his duty or continued incapacity to perform it.
4.6.2. The term "good reason" shall mean the occurrence of
one or more of the following events without
Employee's express written consent (I) removal of
Employee from the position and responsibilities as
set forth under Section 2 above; (ii) a material
reduction by the company in the kind or level of
employee benefits to which Employee is entitled
immediately prior to such reduction with the result
that Employee's overall benefit package is
significantly reduced; (iii) the relocation of
Employee to a facility or a location outside of
California; (iv) a change in the control of the
Company, or (v) any material breach by the Company of
any material provision of this Agreement which
continues uncured for thirty (30) days following
written notice thereof.
4.6.3. The term "permanent disability" shall mean Employee's
incapacity due to physical or mental illness, which
results in Employee being absent from the performance
of his duties with the Company on a full-time basis
for a period of six (6) consecutive months. The
existence or cessation of a physical or mental
illness which renders Employees absent from the
performance of his duties on a full-time basis shall,
if disputed by the Company or Employee, be
conclusively determined by written
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opinions rendered by two qualified physicians, one
selected by Employee and one selected by the Company.
During the period of absence, but not beyond the
expiration of the Employment Period, Employee shall
be deemed to be on disability leave of absence, with
his compensation paid in full. During the period of
such disability leave of absence, the Board of
Directors may designate an interim officer with the
same title and responsibilities of Employee on such
terms, as it deems proper.
4.7. EMPLOYEE BENEFIT PLANS
Any employee benefit plans in which employee may participate pursuant to the
terms of this Agreement shall be governed solely by the terms of the underlying
plan documents and by applicable law, and nothing in this Agreement shall impair
the Company's right to amend, modify, replace, and terminate any and all such
plans in its sole discretion as provided by law. This Agreement is for the sole
benefit of Employee and the Company, and is not intended to create an employee
benefit plan or to modify the terms of any of the Company's existing plans.
5. MISCELLANEOUS
5.1 ARBITRATION/GOVERNING LAW. To the fullest extent permitted
bylaw, any dispute, or claim or controversy of any kind
(including but not limited to tort, contract, and statue)
arising under, in connection with, or relating to this
Agreement or Employee's employment, shall be resolved
exclusively by binding arbitration in Los Angeles County,
California in accordance with the commercial rules of the
American Arbitration Association then in effect. The Company
and Employees agree to waive any objection to personal
jurisdiction or venue in any forum located in Los Angeles
County California. No claim, lawsuit or action of any kind may
be filed by either party to this
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Agreement except to compel arbitration or to enforce an
arbitration award; arbitration is the exclusive dispute
resolution mechanism between the parties hereto. Judgment may
be entered on the arbitrator's award in any court having
Jurisdiction.The validity; interpretation, effect and
enforcement of this Agreement shall be governed by the laws of
the State of California.
5.2 ASSIGNMENT. This agreement shall inure to the benefit of and
shall be binding upon the successors and assigns shall
specifically assume this Agreement. Since this agreement is
based upon the unique abilities of, and the Company's personal
confidence in Employee, Employee shall have no right to assign
this Agreement or any of his rights hereunder without the
prior written consent of the Company.
5.3 SEVERABILITY. If any provision of this Agreement shall be
found invalid, such findings shall not effect the validity of
the other provisions hereof and the invalid provisions shall
be deemed to have been severed herefrom.
5.4 WAIVER OF BREACH. The waiver by any party of the breach of any
provision of this Agreement by the other party or the failure
of any party to exercise any right granted to it hereunder
shall not operate or be construed as the waiver of any
subsequent breach by such other party nor the waiver of the
right to exercise any such right.
5.5 ENTIRE AGREEMENT. This instrument, together with the plans
referred to in Section 5, contains the entire agreement of the
parties. It may not be changed orally but only by an agreement
in writing signed by the parties.
5.6 NOTICES. Any notice required or permitted to be given
hereunder shall be in writing and may be personally
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served or sent by United States mail, and shall be deemed to
have been given when personally served or two days after
having been deposited in the United States mail, registered or
certified mail, return receipt requested, with first-class
postage prepaid and properly addressed as follows. For the
purpose hereof, the addresses of the parties hereto (until
notice of a change thereof is given as provided in this
Section 5.6) shall be as follows:
If to Employee:
Xxx Xxxxxxxx
(street address omitted)
Xxx Xxxxxxx, Xxxxxxxxxx 00000
If to the Company:
Wareforce Incorporated
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
5.7. HEADINGS. The paragraph and subparagraph headings herein are
for the convenience only and shall not affect the construction
hereof.
5.8. FURTHER ASSURANCES. Each of the parties hereto shall, from
time to time, and without charge to the other parties, take
such additional actions and execute, deliver and file such
additional instruments as may be reasonably required to give
effect to the transactions contemplated hereby.
5.9. ATTORNEYS' FEES. In the event any party hereto commences
arbitration or legal action in connection with this Agreement,
the prevailing party shall be entitled to its attorneys' fees,
costs and expenses reasonably incurred in such action, and the
amount thereof shall be included in any judgment or award
granted under Section 5.1.
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5.10. COUNTERPARTS. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an
original but all, which together shall constitute one and the
same instrument.
5.11. SEPARATE COUNSEL. The Company has been represented by counsel
in the negotiation and execution of this Agreement and has
relied on such counsel with respect to any matter relating
hereto. The Employee has been invited to have his own counsel
review and negotiate this Agreement and Employee has either
obtained has either obtained his own counsel or has elected
not to obtain counsel.
5.12. INDEMNIFICATION. The Company shall provide to the Employee
insurance coverage under its Director and Officer's Insurance
and General Liability, and Employment Practices policies to
the same extent as it provides to all other similar employees
of the Employee's title and position.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the
day and year first above written.
"EMPLOYEE" "COMPANY"
WAREFORCE INCORPORATED
a California corporation
/s/ Xxx Xxxxxxxx By: /s/ Xxxx Xxxxxxxx
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Title: CEO
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AMENDMENT NO. 1
TO
EXECUTIVE EMPLOYMENT AGREEMENT
BY AND BETWEEN
XXX XXXXXXXX AND WAREFORCE, INC.
THIS AMENDMENT ("Amendment") is executed and effective as of the 14th
day of July, 1998, by and between XXX XXXXXXXX an individual
("Employee"), and WAREFORCE INCORPORATED, a California corporation (the
"Company"), and amends that certain employment agreement between
Employee and Company dated June 1, 1998 as follows:
1. Strike Section 3.1 in its entirety and replace with the following"
"BASE SALARY. Employee's base salary shall be $110,000.00 per year
(retroactive to July 1, 1998), subject to an annual increase (if any)
in the sole discretion of the Board, payable in accordance with the
Company's payroll practices as in effect from time to time, and subject
to such withholding as is required by law."
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as
of the day and year first above written.
"EMPLOYEE" "COMPANY"
WAREFORCE INCORPORATED
A California corporation
/s/ Xxx Xxxxxxxx By: /s/Xxxx Xxxxxxxx
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Xxx Xxxxxxxx Title: President
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