Exhibit 10.11
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
this 15th day of March, 1999 by and between XXXXXXXXX.XXX CORPORATION, a
Delaware corporation (the "Company"), and Xxxxx Xxxxxxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Company desires to employ the Executive and the Executive
desires to be employed by the Company;
NOW, THEREFORE, upon the terms and conditions hereinafter set forth, it
is hereby agreed between the parties as follows:
I. DUTIES
A. Upon the terms and subject to the conditions of this Agreement,
the Company hereby employs the Executive as Vice President-Product
Development of the Company (which is a wholly owned subsidiary of Miami
Computer Supply Corporation, an Ohio corporation ("MCSC")), commencing on the
date above-written and ending on March 15, 2002 (the "Employment Term"), and
the Executive hereby accepts said employment. The Agreement may be renewed at
the option of the Company for additional periods of one year each (a "Renewal
Term") by the giving of written notice to the Executive at least ninety (90)
days prior to the expiration of the Employment Term or a Renewal Term, as the
case may be; provided, that the Executive shall have the option to decline
such renewal by providing written notice thereof to the Company no later than
sixty (60) days after receipt of any such renewal notice from the Company.
B. The Executive's areas of responsibility shall be commensurate
with his position as Vice President-Product Development and co-founder and as
directed by the President and/or the Board of Directors and shall include,
but not be limited to, supervising product development, overseeing quality
control of productions, production placement and advertising and any other
duties specified by the Board of Directors. The Executive shall, from time to
time and as requested, report to the Board of Directors with respect to his
activities. The Executive agrees to exercise his duties and responsibilities
hereunder in good faith, with diligence, and in accordance with sound
business practice.
C. The Executive shall devote his full business time and efforts
and all reasonable energy and skill to the business of the Company and shall
use his best efforts to promote the interest of the Company. The Executive's
services shall be rendered with due regard for the prompt, efficient and
economical operation of the business of the Company.
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II. BASE SALARY AND BENEFITS
A. The Executive shall be paid a base salary (the "Base Salary")
of $90,000.00 per year, payable at least monthly when all other employees of
the Company are customarily paid.
B. The Executive will be able to take up to five (5) weeks paid
vacation per year.
C. During the Employment Term and any Renewal Term, the Executive
will be entitled to participate in and receive the benefits of any pension or
other retirement benefit plan, profit sharing, stock option, employee stock
ownership, or other plans, benefits and privileges given to employees and
executives of the Company. The Company shall not make any changes in such
plans, benefits or privileges which would adversely affect the Executive's
vested rights or benefits thereunder, unless such change occurs pursuant to a
program applicable to all executive officers of the Company at equivalent
base salary levels and does not result in a proportionately greater adverse
change in the rights of or benefits to the Executive as compared with any
such other executive. Nothing paid to the Executive under any plan or
arrangement presently in effect or made available in the future shall be
deemed to be in lieu of the Base Salary payable to the Executive pursuant to
Section II.A hereof. Nothing contained herein shall prohibit the Board of
Directors of the Company, in its sole discretion, from increasing the
compensation payable to the Executive pursuant to this Agreement and/or
making available to the Executive other benefits in addition to those to
which the Executive is entitled hereunder.
D. In addition to the foregoing, the Executive shall, at all times
during the Employment Term and any Renewal Term, be eligible to participate
in and to be covered by all plans, if any, effective generally with respect
to executives of the Company with respect to life insurance, accident
insurance, health insurance, hospitalization, disability, and other benefits
of whatsoever kind or description, to the extent the Executive is eligible
under the terms of such plans, on the same basis as other executives of the
Company and without restriction or limitation by reason of this Agreement.
The Executive shall be entitled to all of the fringe benefits and perquisites
of office of whatsoever kind or description made available generally to other
executives of the Company, including, but not limited to, customary paid
holidays, without restriction or limitation by reason of any specific benefit
provided for in this Agreement.
E. The Company shall pay or reimburse the Executive for all
reasonable out-of-pocket expenses incurred or paid by him in connection with
the performance of his duties, travel, entertainment and other business
expenses incurred by him in the performance of his duties under this
Agreement and as are customary for the Executive's role in the Company, upon
presentation of expense statements, receipts or vouchers or such other
supporting information as the Company may reasonably require.
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III. TERMS AND CONDITIONS OF EMPLOYMENT
A. Unless earlier terminated pursuant to terms hereof, the term of
employment hereunder shall end on the earliest to occur of:
1. The later of the Employment Term or any Renewal Term;
2. The death or retirement of the Executive;
3. On ten (10) days' written notice of termination from the
Company to the Executive, which notice may be given only on or after there
shall have elapsed a consecutive period of more than 90 days (or for shorter
periods aggregating more than 90 days during any consecutive twelve-month
period) during which the Executive was physically or mentally incapacitated
(as reasonably determined by the Board of Directors based on objective
medical evidence obtained consistent with the Americans with Disabilities
Act) and unable to perform his duties hereunder; or
4. The resignation of the Executive.
B. In addition to the events described in the foregoing Section
III.A, the Company shall be entitled to terminate this Agreement for "cause"
upon written notice to the Executive, the cause to be specified in the
notice. For purposes of this Agreement, "cause" shall be determined by the
affirmative vote of a majority of the Board of Directors of the Company
(excluding the Executive, if a member of the Board) and shall mean (i) the
Executive's incompetence in the performance of his duties under this
Agreement, (ii) the Executive's personal dishonesty adversely affecting the
Company, (iii) the Executive's refusal to perform, or the substantial neglect
of, or an intentional failure to perform, a material portion of the
Executive's duties required hereunder, which actions or inactions are not
reasonably cured within ten (10) days after receipt of written notice from
the Company with respect thereto, (iv) the Executive's willful misconduct
adversely affecting the Company or the Executive's material negligence, (v)
breach of a fiduciary duty to the Company involving personal gain, (vi)
sexual harassment by the Executive of any Company employee, officer,
director, representative, agent, customer or vendor, (vii) assault by the
Executive of any Company employee, officer, director, representative, agent,
customer or vendor, (viii) any material breach by the Executive of this
Agreement not reasonably cured with ten (10) days after receipt of written
notice thereof, (ix) if the Executive has been convicted of a felony or a
crime involving moral turpitude, theft, fraud or embezzlement, (x) the
intentional or reckless conversion of Company funds, or the destruction of
Company assets by the Executive.
C. The Executive shall have the right to terminate this Agreement
for good reason upon reasonable notice to the Company, the good reason to be
specified in the notice.
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1. For purposes of this Agreement, "good reason" shall mean
the failure of the Company to provide material resources which are necessary
to the fulfillment of the Executive's responsibilities hereunder, and which
failure(s) is not reasonably cured within ten (10) days after receipt of
written notice thereof from the Executive; or
2. The express direction to the Executive by the Board of
Directors to perform any action or inaction which, in the reasonable opinion
of the Executive and, upon written advice of his counsel, is illegal or is
both materially beyond the scope of the duties required of the Executive
under this Agreement and not commensurate with his position as Vice
President-Product Development of the Company; or
3. The threatened or actual insolvency or receivership of the
Company or MCSC; or
4. The material failure of the Company to perform its
obligations to the Executive as set forth in this Agreement.
D. Except as hereinafter provided with respect to Sections
III.C.1., 2., and 4., termination in accordance with any of the foregoing
provisions of Sections III.A, B or C above shall be effective on the date
applicable to the particular termination section referred to above (the
"Termination Date"), and from and after such date, this Agreement shall be of
no further force and effect; provided, however, that no such termination
shall affect: (i) a Party's rights to seek damages or other relief in respect
of a breach by the other Party of his or its obligations under this
Agreement, (ii) the Company's rights or the Executive's obligations under
Section IV herein, or (iii) the Executive's rights or the Company's
obligations as set forth under Sections IV and IX, below. In the event, the
Executive terminates this Agreement pursuant to Sections III.C.1., 2., and
4., above, the Executive shall be entitled to receive compensation in the
form of severance pay equal to the lesser of (i) $14,795, if such termination
occurs more than sixty (60) days prior to the end of the Initial Term or any
Renewal Term of this Agreement, or (ii) $247.00 per day for each day prior to
the end of the Initial Term or any Renewal Term, if such termination occurs
less than sixty (60) days prior to the end of the Initial Term or any Renewal
Term.
IV. NON-COMPETITION
A. 1. The Company has disclosed to the Executive its
confidential business plans, marketing strategies, advertising copy, funding
sources, wholesale and retail customer lists, equipment sources, financial
projections and results and other confidential information concerning the
Company in the course of the Executive's occupation as Vice President-Product
Development and co-founder of the Company. This information and similar
information yet to be developed by
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the Executive is generally unknown to the public and gives the Company a
competitive advantage over those who do not have access to this information.
The Company has taken and will take care to preserve this information and
protect it from becoming generally known. The Company has revealed this
information to the Executive on the condition that he keep it confidential
and will require confidentiality from the Executive and all other persons
with access to the information in the future. The information described
above, therefore, constitutes valuable trade secrets of the Company and is
referred to below as "Proprietary Information."
2. In the course of performing his duties under this
Agreement, the Executive will both help develop and be privy to Proprietary
Information. All Proprietary Information used or generated during the course
of the Executive's employment with the Company will be the property of the
Company, except for such information that was developed by the Executive and
was published or otherwise disseminated prior to the date hereof and
specifically listed and described on an attachment hereto. The Executive
acknowledges and agrees that all works of authorship, including, without
limitation, program codes or documentation, produced by him in the course of
performing services for the Company, are works for hire and the property of
the Company. The Executive further assigns to the Company his entire right,
title and interest in any invention, technique, process, devise, discovery,
improvement or know-how, patentable or not, hereafter made or conceived
solely or jointly by him while working for the Company, which relates in any
manner to the actual or anticipated business or research or development of
the Company or MCSC, or is suggested by or results from any task assigned to
him or work performed by him for or on behalf of the Company or MCSC, or for
which MCSC or Company equipment, supplies, facilities, information or
materials are used. Any such invention, technique, process, device,
discovery, improvement or know-how shall be promptly disclosed to the Company
and the Executive shall specifically assign the title thereto to the Company
and do anything else reasonably necessary to enable the Company to obtain
proprietary rights in the United States or foreign countries. The Executive
shall deliver to the Company all documents and other tangibles containing
Proprietary Information upon termination of his employment with the Company
pursuant to Section III hereof or otherwise within three days after the
Company so requests.
3. The Company has and shall retain all exclusive rights in
the Proprietary Information. During the term of this Agreement and any
extension hereof and for a period of seven (7) years following termination of
this Agreement, the Executive shall not (a) remove Proprietary Information
from Company or MCSC premises; (b) use Proprietary Information for his own
benefit or for the benefit of any third party; and (c) disclose Proprietary
Information to any third party (except with respect to response to judicial
or administrative process, and such disclosure shall occur only after written
notification of the Company immediately after receipt of such process and
cooperation with the Company, if so requested, to assist in obtaining
confidential treatment of, or a protective order for, the Proprietary
Information), or make any commercial or academic use of the
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Proprietary Information without the express written consent of the Company,
which consent may be withheld for any or no reason in the Company's sole
discretion.
4. These restrictions on the use and disclosure of
Proprietary Information shall survive the expiration or termination of this
Agreement for a period of seven (7) years thereafter, regardless of the
grounds or lack of grounds therefor. The parties recognize and agree that, in
the event of a threatened or actual breach of this Section IV.A, the
Company's remedy at law will be inadequate to fully compensate the Company
for its losses. Therefore, the Company may enforce its rights hereunder by
equitable remedies, including, without limited the generality of the
foregoing, injunctive relief and specific performance.
5. These restrictions on the use and disclosure of
Proprietary Information shall not apply to any information that is or becomes
generally disclosed to the public otherwise than by the Executive's breach of
this Agreement.
B. 1. During the term of this Agreement and for twelve months
thereafter ending on the first anniversary of the Termination Date (the
"Non-compete Term"), the Executive hereby covenants and agrees that the
Executive (and any person or entity controlled by, under common control with
or controlling the Executive) will not sell or distribute, directly or
indirectly, or be associated as an officer, director or greater than 5%
shareholder, employee, consultant, agent or representative to or with any
Person that sells or distributes computer supplies or projection presentation
products in an area within a seventy-five (75) mile radius of any existing
office of the Company or MCSC. For purposes of the Section IV.B.1, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the activities, affairs, management or policies of such Person,
whether through personal relationship, the ownership of voting securities or
by contract or otherwise.
2. The Executive agrees that in the event that the Executive
commits a breach or threatens to commit a breach of any of the provisions of
this Section IV.B, the Company shall have the right and remedy to have the
provisions of this Section IV.B specifically enforced by any court having
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause immediate irreparable injury to the Company and
that money damages will not provide an adequate remedy at law for any such
breach or threatened breach. Such right and remedy shall be in addition to,
and not in lieu of, any other rights and remedies available to the Company at
law or in equity.
3. If any of the provisions of or covenants contained in this
Section IV.B are hereafter construed to be invalid or unenforceable in any
jurisdiction, the same shall not affect the
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remainder of the provisions or the enforceability thereof in any other
jurisdiction, which shall be given full effect, without regard to the invalid
portions or the unenforceability in such other jurisdiction because of the
duration or geographic scope thereof, the parties agree that the court making
such determination shall have the power to reduce the duration and/or geographic
scope of such provision or covenants and, in its reduced form, said provision or
covenant shall be enforceable; provided, however, that the determination of such
court shall not affect the enforceability of this Section IV.B in any other
jurisdiction.
C. 1. The Executive hereby acknowledges and recognizes the
highly competitive nature of the business of the Company and, accordingly,
agrees that, during the Employment Term and any Renewal Term and in
consideration of the receipt of any payment pursuant to this Agreement, for a
period beginning on the Termination Date and ending upon the expiration of
the Non-compete Term, unless otherwise agreed to in writing by the Company,
the Executive shall not, either directly or indirectly, in any manner or
capacity, whether as principal, agent, partner, officer, director, employee,
joint venturer, salesman, or corporate shareholder or otherwise for the
benefit of any Person (as defined below), (i) solicit the rendering of
services to any Person of any kind whatsoever who is then or has been a
Customer, Supplier, Employee, Salesperson, Agent or Representative of the
Company in any manner which interferes or might interfere with the
relationship of the Company with such Person, or in an effort to obtain such
Person as a Customer, Supplier, Employee, Salesperson, Agent or
Representative of any business in competition with the Company, or (ii)
during the period beginning on the Termination Date and ending upon the
expiration of the Non-compete Term, solicit for employment or assist any
Person in the solicitation for employment of any Employee of the Company.
(a) "Person" means any individual, trust, partnership,
corporation, limited liability company, association, or other legal entity.
(b) "Customer" means any Person with whom the Company is
currently engaged to provide goods or services, has been engaged to provide
goods or services within one (1) year prior to the Termination Date, or
actively marketed, discussed a project with, negotiated with, provided a bid
to or otherwise communicated with in an effort to obtain an engagement to
provide goods or services sold by the Company within one (1) year prior to
the Termination Date.
(c) "Supplier," "Employee," "Salesperson," "Agent" or
"Representative" each means any Person who is then serving, or has served,
the Company in such capacity at any time within one (1) year prior to the
Termination Date.
2. It is expressly understood and agreed that although the
Executive and the Company consider the restrictions contained in Section IV.C
of this Agreement reasonable for the
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purpose of preserving for the Company its goodwill and other proprietary rights,
if a final judicial determination is made by a court having jurisdiction that
the time or territory or any other restriction contained in Section IV.C of this
Agreement is an unreasonable or otherwise unenforceable restriction against the
Executive, the provisions of Section IV.C of this Agreement shall not be
rendered void but shall be deemed amended to apply as to such maximum time and
territory and to such other extent as such court may judicially determine or
indicate to be reasonable.
V. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement as to the subject
matter hereof and there are no terms other than those contained herein. This
Agreement shall be interpreted in order to achieve the purposes for which it was
entered into. The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. No variation hereof or amendment hereto shall be deemed to be
valid unless in writing a signed by the parties hereto. No waiver by either
party of any provision or condition of this Agreement by him or it to be
performed shall be deemed to be a waiver of similar or dissimilar provisions or
conditions at the same or any prior or subsequent time. This Agreement is not
assignable by the Executive, but may be assigned by the Company to any affiliate
of the Company or by operation of law.
VI. BINDING EFFECT
The Company and the Executive represent and warrant that they are able
to enter into this Agreement and that such ability is not limited or restricted
by any agreements or understandings entered into by the Company or the Executive
with other persons or other companies. This Agreement shall inure to the benefit
of and be binding upon the Company, its successors and assigns, and the
Executive, his heirs, executors, administrators and legal representatives. The
obligations of the Company hereunder are unsecured and the Executive represents
a general creditor of the Company for compensation which may be due and owing.
Nothing contained herein shall create or require the Company to create a trust
of any kind to fund any benefits which may be payable hereunder, and to the
extent that the Executive acquires a right to receive benefits from the Company
hereunder, such right shall be no greater than the right of any unsecured
general creditor of the Company.
VII. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of California. All disputes between the parties, except
disputes under Section IV, shall be resolved by alternative dispute resolution
("ADR") in the jurisdiction wherein the Executive is domiciled.
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VIII. ALTERNATIVE DISPUTE RESOLUTION
The parties agree that it is in their best interests to resolve all
disputes or controversies (except for violations of Section IV) arising out
of this Agreement in a cost effective and timely manner. Therefore, any
controversy of claim arising out of this Agreement or the breach thereof, or
the interpretation thereof (except, in each case, with respect to Section
IV), shall be settled by binding arbitration in accordance with the Rules of
the American Arbitration Association applicable to employer disputes; and
judgment upon the award rendered in such arbitration shall be final and may
be entered in any court having jurisdiction thereof. Notice of the demand for
arbitration shall be filed in writing with the other party to this Agreement
and with the American Arbitration Association. In no event shall the demand
for arbitration be made after the date when institution of legal or equitable
proceedings based on such claims, dispute or other matter in question would
be barred by the applicable statute of limitation. This agreement to
arbitrate shall be specifically enforceable under the prevailing arbitration
law. Any Party desiring to initiate arbitration procedures hereunder shall
serve written notice on the other Party. The parties agree that an arbitrator
shall be selected pursuant to these provisions within thirty (30) days of the
service of the notice of arbitration. In the event of any arbitration
pursuant to these provisions, the parties shall retain the rights of all
discovery provided pursuant to the California Code of Civil Procedure and the
Rules promulgated thereunder, except that all time periods contained in said
Code of Civil Procedure and its related Rules shall be shortened by fifty
percent (50%) for purposes of arbitration proceedings hereunder. Any
arbitration initiated pursuant to these provisions shall be on an expedited
basis and the dispute shall be heard within one hundred twenty (120) days
following the serving of the notice of arbitration and a written decision
shall be rendered within sixty (60) days thereafter. These procedures
supplement the American Arbitration Association's procedures and, if there is
a conflict, these provisions shall control. All rights, causes of action,
remedies and defenses available under California law and equity are available
to the parties hereto and shall be applicable as though in a court of law.
Each party shall be responsible for its own costs and fees of any such
arbitration.
IX. INDEMNIFICATION; WITHHOLDING; MCSC'S ASSURANCES
A. 1. The Company shall indemnify the Executive against all
judgments, payments in settlement (whether or not approved by a court),
fines, penalties and other costs and expenses (including attorneys fees and
costs) imposed upon or incurred by the Executive in connection with or
resulting from any action, suit, proceeding, stockholder's derivative action,
investigation or claim, civil, criminal, administrative or other proceeding,
or any appeal relating thereto, which is brought or threatened by any Person
or government authority (an "Action") and in which the Executive is made a
party or is otherwise involved by reason of his being or having been a
director, officer, employee or agent of the Company, MCSC or any Person
affiliated with either of the foregoing, or
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by reason of any action or omission or alleged action or omission by the
Executive in any such capacity.
2. The Executive shall be entitled to such indemnification if
either (i) the Executive is wholly successful, on the merits or otherwise, in
defending such Action, or (ii) in the judgment of a court of competent
jurisdiction or, in the absence of such determination, in the judgment of a
majority of a quorum of the Board of Directors of the Company (which quorum
shall not include any director who is a party to or is otherwise involved in
such action), or, in the absence of such a disinterested quorum, in the
opinion of independent legal counsel that the Executive acted in good faith
in what he reasonably believed to be in the best interest of the Company, and
in addition, in any criminal action had no reasonable cause to believe that
his action was unlawful.
3. The foregoing rights of indemnification shall be in
addition to any rights which the Executive may otherwise be entitled pursuant
to any agreement, vote of shareholders, at law, in equity or otherwise.
4. In any case in which it reasonably appears that the
Executive will be entitled to indemnification hereunder, such amounts as
shall be determined by a majority of a disinterested quorum of the Board, in
the reasonable exercise of its discretion, shall be advanced to the Executive
to cover the costs and expenses incurred by him in connection with the
action, suit, proceeding, investigation or claim prior to the final
disposition thereof. In such case, the Executive shall undertake in writing
to repay such amounts if it is ultimately determined that he is not entitled
to indemnification.
B. All payments required to be made by the Company hereunder to
the Executive shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as the Company may reasonably
determine should be withheld pursuant to any applicable law or regulation.
C. The Company has received assurances from MCSC that, for a
period of five years from the date of incorporation of the Company, MCSC
shall not operate, or invest in, any person or entity which sells computer
supplies over the Internet to the single office, home office ("SOHO") market.
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X. NOTICES
A. Any notices or other communication required or permitted
hereunder shall be sufficiently given (a) upon the third (3rd) business day
after being deposited in the mail, if sent by registered mail or certified
mail, postage prepaid, addressed, if to the Executive, to him at
__________________________________, and if to the Company, to it c/o MCSC at
0000 Xxxxxxxxx Xxxxxxx Xxxxx, Xxxxxx, Xxxx 00000, Attention: President -
Chief Executive Officer, or (b) upon actual receipt, if sent by facsimile,
overnight courier or personal delivery.
B. For purposes of all notices to be given pursuant to or arising
out of this Agreement, including a demand for ADR, a Party will be presumed
to have received written notice on the date of the actual receipt thereof.
IN WITNESS WHEREOF, the Company and the Executive have set their hands
on the date above written.
ATTEST:
By: /s/ XXXXX XXXXXXXXX
------------------------------
Xxxxx Xxxxxxxxx
"Executive"
ATTEST: XXXXXXXXX.XXX CORPORATION
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
"Company"
