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Exhibit 10.16
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is executed and effective as of the 1st
day of July, 1998, by and between XXXXXX XXXXXX 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.
The Company desires to continue the employment of Employee as the Vice President
of Marketing and Communications, 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 July 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.
2. DUTIES
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2.1. VICE PRESIDENT OF MARKETING AND COMMUNICATIONS: 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 her full
business time and attention to performing her duties as Vice President
of Marketing and Communications of the Company. However, not
withstanding anything else to the contrary in this Agreement, the
Employee may devote such time as is necessary for her to fulfill
certain ongoing current and future consulting engagements with
companies that do not compete with the Company. The time devoted to
these consulting engagements shall not take away from the Employee's
first loyalty to the Company however. She shall 1) continue to build
and supervise marketing and communications teams to profitably market
the Company's products and services to customers in territories
associated with all of the Company's branches, subsidiaries and
divisions in the United States and worldwide; 2) manage the overall
direction, coordination, and evaluation of the Company and its
subsidiaries and divisions' marketing efforts to achieve or exceed
both the earnings-per-share and gross revenue targets of the Company;
3) assist the Chief Executive Officer in formulating and administering
Company policies; 4) successfully communicate to the investment
community the Company's strategies and visions and press releases as
well as supervise outside services in doing so; 5) review and analyze
the activities costs, operations of the Company's marketing efforts to
define and to track their progress toward achieving their goals and
objectives, including but not limited to managing the Company's co-op
and Market Develop Fund activities with vendors; 6) carry out
supervisory responsibilities in accordance with Company policies, and
applicable laws; 7) interview, hire and train marketing and
communications managers and staff; 9) plan, assign and direct the work
of marketing and communications managers and staff, appraise their
performance, and reward and discipline them, and address their
complaints; 10) submit all
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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/or her home office as
determined by her 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. 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,
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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 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.
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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 a "trade secret" of the Company
as defined in California Civil Code Section 3426.1(d). Employee shall
not disclose any of the Company's trade secrets, directly or
indirectly or use them in any way, either during the term of this
agreement or at any time thereafter, except as required in the course
of employment with the Company and except as may be permitted in
accordance with the California Uniform Trade Secrets Act (Civil Code
Sections 3426-3426.11)..
2.5. Employee agrees that all customers of the Company, for which the
Employee has provided 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 the customers of the Company and not of the Employee during
the term of this Agreement.
2.6. After Employee's employment terminates, she will not engage in any
conduct that constitutes unfair competition with the Company as such
term is defined pursuant to the substantive law of the State of
California.
3. COMPENSATION. As compensation for her 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 $80,000.00 per year,
shall never be decreased, and shall be subject to an annual review for
purposes of increase, 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 quarterly bonus of $5,000 which shall
be subject to such withholding as is required by law.
3.2.2. Employee and Company agree that within ninety (90) days from
the Effective Date of athis Agreement, Company shall establish
a bonus plan for Employee to be based on the amount of Co-op
and Market Development Funds collected by the Company at the
direction of the Employee.
3.3. BENEFITS.
3.3.1. VACATION. Employee shall be entitled to vacation time as has
been accrued each pay period since July 1, 1998, less any
vacation taken in such amounts and under such conditions as
normally afforded to the Company's management and as is defined
in the Company's Employee Handbook. In the event Employee does
not use such vacation, she 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 her.
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 reasonable and appropriate documentation
(i.e. satisfactory for IRS purposes) in support of all business
expenses reimbursement sought.
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3.3.3. STOCK OPTIONS. Company shall grant Employee incentive stock
options on the same terms as 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. (See attached copy of Option
Plan and Option Agreement.)
3.3.3.1. Company agrees to make an initial grant to the
Employee of 5,000 fully vested and exercisable options
on July 13, 1998 at a Fair Market Value of $3.00 per
option. These shares shall be granted in partial
consideration of services rendered prior to July 13,
1998. The Employee is responsible for payment of any
taxes associated with such grant.
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 other senior
management employees.
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
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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 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.
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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 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 nine (9) month's total base
salary at the rates set forth herein, and such other benefits
as may be required by law; but in no case shall such severance
benefits be less than those accorded by the Company to any
other one of its senior management employees.
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 nine (9) 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,
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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 other senior management
employees of the level comparable to Employee, for a period of six (6)
months 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
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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 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
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5.1 ARBITRATION/GOVERNING LAW. To the fullest extent permitted by law, 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 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
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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 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:
Xxxxxx Xxxxxx
(omitted)
Santa Monica, CA (omitted)
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
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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. The trier of any dispute between the parties in
connection with this agreement shall have the power (but not the
obligation) to award the party (if any) determined by such trier to
be the prevailing party all or any part os such party's attorneys'
fees and costs.
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"
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WAREFORCE INCORPORATED
a California corporation
/s/Xxxxxx Xxxxxx By: /s/ Xxx Xxxxxxxx
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Xxxxxx Xxxxxx Title: General Counsel
