Exhibit 10(j)
VOLUNTARY RESIGNATION
AND EMPLOYMENT AGREEMENT
This Voluntary Resignation and Employment Agreement (this "Agreement"),
dated as of February 28, 2002 between Pak Mail Centers of America, Inc., a
Colorado corporation ("Employer"), and Xxxx X. Xxxxx ("Employee");
W I T N E S S E T H:
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A. Employee is currently President and Chief Executive Officer and a member of
the Board of Directors of Employer.
B. Employer and Employee desire that Employee resign as President, Chief
Executive Officer and Director, that Employee be named as Chairman of the Board
of Directors and that Employee continue to provide services to Employer as
Chairman of the Board of Directors upon the terms and conditions set forth
herein.
C. Pursuant to Employer's Amended and Restated Severance Pay Policy (the
"Policy") of Employer, Employee would have been entitled to certain payments
upon a "Change of Control" as defined in the Policy and pursuant to the other
terms and conditions set forth in the Policy and the parties desire to
acknowledge that Employee will not be entitled to such payments as Chairman of
the Board of Directors.
D. Employee also desires to provide Employer a general release relating to
Employee's prior employment, including with respect to the Policy.
A G R E E M E N T:
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NOW, THEREFORE, for and in consideration of the foregoing premises and for
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, Employer and Employee hereby agree as follows:
1. EMPLOYMENT
Employee hereby voluntarily resigns and terminates his employment with
Employer effective at the close of business on February 28, 2002. Employer will
employ Employee and Employee will accept employment by Employer as its Chairman
of the Board effective March 1, 2002. Employee will have the authority, subject
to Employer's Articles of Incorporation and Bylaws, as may be granted from time
to time by the Board of Directors of Employer. Employee will perform the duties
assigned in Employer's Bylaws and customarily performed by the Chairman of the
Board of Directors of a corporation which is, in all respects, similar to
Employer and such other duties as may be assigned from time to time by the Board
of Directors of Employer, which relate to the business of Employer or any
business ventures in which Employer may participate. Included in Employee's
duties shall be the following: exploring new opportunities and strategic
alternatives for potential repositioning of Employer.
2. ATTENTION AND EFFORT
Employee will devote all of his entire productive time, ability, attention
and effort to Employer's business and will skillfully serve its interests during
the term of this Agreement.
3. TERM
Unless otherwise terminated pursuant to paragraph 6 of this Agreement,
Employee's term of employment under this Agreement shall expire on February 28,
2004.
4. COMPENSATION
During the term of this Agreement, Employer agrees to pay or cause to be
paid to Employee, and Employee agrees to accept in exchange for the services
rendered hereunder by him, the following compensation:
4.1. Salary
Employee's compensation shall consist of an annual salary of One
Hundred Sixty-One Thousand Dollars ($161,000) before all customary payroll
deductions. Such annual salary shall be paid in substantially equal
installments and at the same intervals as other officers and/or management
personnel of Employer are paid. Employee shall also be entitled to a bonus
if one is earned and payable under Employer's current Management Incentive
Plan, for fiscal year 2002 only.
5. BENEFITS
During the term of this Agreement and except as set forth below, Employee
will be entitled to participate, subject to and in accordance with applicable
eligibility requirements, in fringe benefit programs if any such programs shall
be provided from time to time by Employer's Board of Directors (or any person or
committee appointed by the Board of Directors to determine fringe benefit
programs and other emoluments), including, without limitation, the medical
insurance benefits currently offered to employees of Employer. In consideration
of the salary and other good and valuable consideration set forth in this
Agreement, subject to the terms and conditions of the 401(k) plan of Employer,
effective upon his rehire by Employer as Chairman of the Board of Directors,
Employee voluntarily and knowingly waives his right to participate in the 401(k)
plan of Employer. Employee agrees to execute such documents as are required by
the Employer's 401(k) plan and applicable law to opt out of such plan. In
addition, during the term of this Agreement, Employer shall pay the automobile
monthly lease payments for Employee's current automobile through June 28, 2003,
and pay the monthly dues for Employee for Employee's current country club
membership through February 2003.
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6. TERMINATION
Employment of Employee pursuant to this Agreement may be terminated as
follows, but in any case, the provisions of paragraphs 8 and 9 hereof shall
survive the termination of this Agreement and the termination of Employee's
employment hereunder:
6.1. By Employer
With or without Cause (as defined below), Employer may terminate the
employment of Employee at any time during the term of employment upon
giving Notice of Termination (as defined below).
6.2. By Employee
Employee may terminate his employment at any time, for any reason,
upon giving Notice of Termination.
6.3. Automatic Termination
This Agreement and Employee's employment hereunder shall terminate
automatically upon the death or total disability of Employee. The term
"total disability" as used herein shall mean Employee's inability to
perform the duties set forth in paragraph 1 hereof for a period or periods
aggregating 90 calendar days in any 12-month period as a result of physical
or mental illness, loss of legal capacity or any other cause beyond
Employee's control, unless Employee is granted a leave of absence by the
Board of Directors of Employer. Employee and Employer hereby acknowledge
that Employee's ability to perform the duties specified in paragraph 1
hereof is of the essence of this Agreement. Termination hereunder shall be
deemed to be effective (a) at the end of the calendar month in which
Employee's death occurs or (b) immediately upon a determination by the
Board of Directors of Employer of Employee's total disability, as defined
herein.
6.4. Notice
The term "Notice of Termination" shall mean 7 days' written notice of
termination of Employee's employment, during which period Employee's
employment and performance of services will continue; provided, however,
that Employer may, upon notice to Employee and without reducing Employee's
compensation during such period, excuse Employee from any or all of his
duties during such period. The effective date of the termination of
Employee's employment hereunder shall be the date on which such 7-day
period expires.
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7. TERMINATION PAYMENTS
In the event of termination of the employment of Employee, all compensation
and benefits set forth in this Agreement shall terminate except as specifically
provided in this paragraph 7:
7.1. Termination by Employer
If Employer terminates Employee's employment without Cause prior to
the end of the term of this Agreement, Employee shall be entitled to
receive (a) termination payments equal to the annual salary Employee would
have received if his employment hereunder had continued until the end of
the term of this Agreement and (b) any unpaid annual salary which has
accrued for services already performed as of the date termination of
Employee's employment becomes effective. If Employee is terminated by
Employer for Cause, Employee shall not be entitled to receive any of the
foregoing benefits, other than those set forth in clause (b) above.
7.2. Termination by Employee
In the case of the termination of Employee's employment by Employee,
Employee shall not be entitled to any payments hereunder, other than those
set forth in clause (b) of subparagraph 7.1 hereof.
7.3. Expiration of Term
In the case of a termination of Employee's employment as a result of
the expiration of the term of this Agreement, Employee shall not be
entitled to receive any payments hereunder, other than those set forth in
clause (b) of subparagraph 7.1 hereof.
7.4. Payment Schedule
All payments under this paragraph 7 shall be made to Employee at the
same interval as payments of salary were made to Employee immediately prior
to termination.
7.5. Cause
Wherever reference is made in this Agreement to termination being with
or without Cause, "Cause" shall include, without limitation, the occurrence
of one or more of the following events:
(a) Failure or refusal to carry out the lawful duties of Employee
described in Section 1 hereof or any directions of the Board of
Directors of Employer, which directions are reasonably consistent
with the duties herein set forth to be performed by Employee;
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(b) Violation by Employee of a state or federal criminal law
involving the commission of a crime against Employer or a felony;
(c) Current use by Employee of illegal substances; deception,
fraud, misrepresentation or dishonesty by Employee; any incident
materially compromising Employee's reputation or ability to
represent Employer with the public; any act or omission by
Employee which substantially impairs Employer's business, good
will or reputation; or any other misconduct; or
(d) Any other material violation of any provision of this
Agreement.
8. NONCOMPETITION AND NONSOLICITATION
8.1. Applicability
This paragraph 8 shall survive the termination of Employee's
employment with Employer or the expiration of the term of this Agreement.
8.2. Scope of Competition
Employee agrees that he will not, directly or indirectly, during his
employment and for a period of 2 years from the date on which his
employment with Employer terminates for any reason, or this Agreement
expires, be employed by, consult with or otherwise perform services for,
own, manage, operate, join, control or participate in the ownership,
management, operation or control of or be connected with, in any manner,
any Competitor, without obtaining Employer's written consent. A
"Competitor" shall include any entity which, directly or indirectly,
competes with Employer or produces, markets, distributes or otherwise
derives benefit from the production, marketing or distribution of products
or services which compete with products then produced or services then
offered, by Employer or the feasibility for production or offering of which
Employer is then actually studying, or which is preparing to market or is
developing products or services that will be in competition with the
products or services then produced or being studied or developed by
Employer, in each case within those geographical areas where Employer has
established customer contacts and good will, unless released from such
obligation in writing by Employer's Board of Directors. Employee shall be
deemed to be related to or connected with a Competitor if such Competitor
is (a) a partnership in which he is a general or limited partner or
employee, (b) a corporation or association of which he is a shareholder,
officer, employee or director, or (c) a partnership, corporation or
association of which he is a member, consultant or agent; provided,
however, that nothing herein shall prevent the purchase or ownership by
Employee of shares which constitute less than five percent of the
outstanding equity securities of a publicly or privately held corporation,
if Employee had no other relationship with such corporation.
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8.3. Scope of Nonsolicitation
Employee shall not directly or indirectly solicit, influence or
entice, or attempt to solicit, influence or entice, any employee or
consultant of Employer to cease his relationship with Employer or solicit,
influence, entice or in any way divert any customer, distributor, partner,
joint venturer or supplier of Employer to do business or in any way become
associated with any Competitor. This subparagraph 8.3 shall apply during
the time period and in the geographical area described in subparagraph 8.2
hereof.
8.4. Assignment of Intellectual Property
All concepts, designs, machines, devices, uses, processes, technology,
trade secrets, works of authorship, customer lists, plans, embodiments,
inventions, improvements or related work product (collectively
"Intellectual Property") which Employee develops, conceives or first
reduces to practice during the term of his employment hereunder or within
one year after the termination of his employment hereunder or the
expiration of this Agreement, whether working alone or with others, shall
be the sole and exclusive property of Employer, together with any and all
Intellectual Property rights, including, without limitation, patent or
copyright rights, related thereto, and Employee hereby assigns to Employer
all of such Intellectual Property. "Intellectual Property" shall include
only such concepts, designs, machines, devices, uses, processes,
technology, trade secrets, customer lists, plans, embodiments, inventions,
improvements and work product which (a) relate to Employee's performance of
services under this Agreement, to Employer's field of business or to
Employer's actual or demonstrably anticipated research or development,
whether or not developed, conceived or first reduced to practice during
normal business hours or with the use of any equipment, supplies,
facilities or trade secret information or other resource of Employer or (b)
are developed in whole or in part on Employer's time or developed using
Employer's equipment, supplies, facilities or trade secret information, or
other resources of Employer, whether or not the work product relates to
Employer's field of business or Employer's actual or demonstrably
anticipated research.
8.5. Disclosure and Protection of Inventions
Employee shall disclose in writing all concepts, designs, processes,
technology, plans, embodiments, inventions or improvements constituting
Intellectual Property to Employer promptly after the development thereof.
At Employer's request and at Employer's expense, Employee will assist
Employer or its designee in efforts to protect all rights relating to such
Intellectual Property. Such assistance may include, without limitation, the
following: (a) making application in the United States and in foreign
countries for a patent or copyright on any work products specified by
Employer; (b) executing documents of assignment to Employer or its designee
of all of Employee's right, title and interest in and to any work product
and related intellectual property rights; and (c) taking such additional
action (including, without limitation, the execution and delivery of
documents) to perfect, evidence or vest in Employer or its designee all
right, title and interest in and to any Intellectual Property and any
rights related thereto.
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8.6. Nondisclosure; Return of Materials
During the term of his employment by Employer and following
termination of such employment, he will not disclose (except as required by
his duties to Employer), any concept, design, process, technology, trade
secret, customer list, plan, embodiment, or invention, any other
Intellectual Property or any other confidential information, whether
patentable or not, of Employer of which Employee becomes informed or aware
during his employment, whether or not developed by Employee. In the event
of the termination of his employment with Employer or the expiration of
this Agreement, Employee will return all documents, data and other
materials of whatever nature, including, without limitation, drawings,
specifications, research, reports, embodiments, software and manuals to
Employer which pertain to his employment with Employer or to any
Intellectual Property and shall not retain or cause or allow any third
party to retain photocopies or other reproductions of the foregoing.
8.7. Equitable Relief
Employee acknowledges that the provisions of this paragraph 8 are
essential to Employer, that Employer would not enter into this Agreement if
it did not include this paragraph 8 and that damages sustained by Employer
as a result of a breach of this paragraph 8 cannot be adequately remedied
by damages, and Employee agrees that Employer, notwithstanding any other
provision of this Agreement, and in addition to any other remedy it may
have under this Agreement or at law, shall be entitled to injunctive and
other equitable relief to prevent or curtail any breach of any provision of
this Agreement, including, without limitation, this paragraph 8.
8.8. Effect of Violation
Employee and Employer acknowledge and agree that additional
consideration has been given for Employee entering into this paragraph 8,
such additional consideration including, without limitation, certain
provisions for termination payments pursuant to paragraph 7 of this
Agreement. Violation by Employee of this paragraph 8 shall relieve Employer
of any obligation it may have to make such termination payments, but shall
not relieve Employee of his obligations, as required hereunder, not to
compete.
8.9. Definition of Employer
For purposes of subparagraph 8.2 and subparagraph 8.3 hereof,
"Employer" shall include all subsidiaries of Employer, Employer's parent
corporation and any business ventures in which Employer, its subsidiaries
or its parent corporation may participate.
9. GENERAL RELEASE
Employee expressly waives any claims against Employer and releases Employer
(including its officers, directors, stockholders, employees, managers, agents
and representatives) from any claims that he may have in any way connected with
his employment and Employer and the termination thereof. It is understood that
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this release includes, but is not limited to, any claims for wages, bonuses,
employment benefits, or damages of any kind whatsoever, arising out of any
contracts, express or implied, any covenant of good faith and fair dealing,
express or implied, any theory of wrongful discharge, any legal restriction on
Employer's right to terminate employees, any policies including, without
limitation, the Policy, or any federal, state or other governmental statute or
ordinance, including, without limitation, Title VII of the Civil Rights Act of
1964, the federal Age Discrimination in Employment Act, or any other legal
limitation on the employment relationship. This waiver and release shall not
waive or release claims where the events in dispute first arise after execution
of this Agreement, nor shall it preclude Employee from filing a lawsuit for the
exclusive purpose of enforcing his rights under this Agreement.
Employee and Employer agree that he shall have 21 days to review this
Agreement and consult legal counsel if he so chooses, during which time the
proposed terms of this Agreement shall not be amended, modified or revoked by
Employer. Employee may revoke this Agreement if he so chooses by providing
notice of his decision to revoke the Agreement to Employer within seven or, if
the 21 day review period has not commenced until execution of this Agreement,
within 21 days, following the date he signs this Agreement. This Agreement shall
become effective and enforceable upon expiration of the later of the 7 day
revocation period or 21 day review period.
10. REPRESENTATIONS AND WARRANTIES
In order to induce Employer to enter into this Agreement, Employee
represents and warrants to Employer as follows:
10.1. No Violation of Other Agreements
Neither the execution nor the performance of this Agreement by
Employee will violate or conflict in any way with any other agreement by
which Employee may be bound, or with any other duties imposed upon Employee
by corporate or other statutory or common law.
11. NOTICE AND CURE OF BREACH
Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this Agreement, other than pursuant to the definition of "Cause" set forth in
subparagraph 7.5 hereof, before such action is taken, the party asserting the
breach of this Agreement shall give the other party at least 10 days' prior
written notice of the existence and the nature of such breach before taking
further action hereunder and shall give the party purportedly in breach of this
Agreement the opportunity to correct such breach during the ten-day period.
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12. FORM OF NOTICE
All notices given hereunder shall be given in writing, shall specifically
refer to this Agreement and shall be personally delivered or sent by telecopy or
other electronic facsimile transmission or by registered or certified mail,
return receipt requested, at the address set forth below or at such other
address as may hereafter be designated by notice given in compliance with the
terms hereof:
If to Employee: Xxxx X. Xxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxx, XX 00000
If to Employer: Pak Mail Centers of America, Inc.
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: President
If notice is mailed, such notice shall be effective upon mailing, or if notice
is personally delivered or sent by telecopy or other electronic facsimile
transmission, it shall be effective upon receipt.
13. ASSIGNMENT
This Agreement is personal to Employee and shall not be assignable by
Employee. Employer may assign its rights hereunder to (a) any corporation
resulting from any merger, consolidation or other reorganization to which
Employer is a party or (b) any corporation, partnership, association or other
person to which Employer may transfer all or substantially all of the assets and
business of Employer existing at such time. All of the terms and provisions of
this Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns.
14. WAIVERS
No delay or failure by any party hereto in exercising, protecting or
enforcing any of its rights, titles, interests or remedies hereunder, and no
course of dealing or performance with respect thereto, shall constitute a waiver
thereof. The express waiver by a party hereto of any right, title, interest or
remedy in a particular instance or circumstance shall not constitute a waiver
thereof in any other instance or circumstance. All rights and remedies shall be
cumulative and not exclusive of any other rights or remedies.
15. AMENDMENTS IN WRITING
No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure therefrom by either
party hereto, shall in any event be effective unless the same shall be in
writing, specifically identifying this Agreement and the provision intended to
be amended, modified, waived, terminated or discharged and signed by Employer
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and Employee, and each such amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by Employer and Employee.
16. APPLICABLE LAW
This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and construed and
enforced in accordance with, the laws of the state of Colorado, without regard
to any rules governing conflicts of laws.
17. SEVERABILITY
If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction, for any reason, including, without
limitation, the duration of such provision, its geographical scope or the extent
of the activities prohibited or required by it, then, to the full extent
permitted by law (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intent of the parties hereto as nearly as may be possible, (b) such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision hereof, and (c) any court or
arbitrator having jurisdiction thereover shall have the power to reform such
provision to the extent necessary for such provision to be enforceable under
applicable law.
18. HEADINGS
All headings used herein are for convenience only and shall not in any way
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
19. COUNTERPARTS
This Agreement, and any amendment or modification entered into pursuant to
paragraph 14 hereof, may be executed in any number of counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute one and
the same instrument.
20. ENTIRE AGREEMENT
This Agreement on and as of the date hereof constitutes the entire
agreement between Employer and Employee with respect to the subject matter
hereof and all prior or contemporaneous oral or written communications,
understandings or agreements between Employer and Employee with respect to such
subject matter are hereby superseded and nullified in their entireties.
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IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.
EMPLOYEE:
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Print Name
Signature
EMPLOYER:
Pak Mail Centers of America, Inc.
By:
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Its:
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