XXXXXXX COMPUTER RESOURCES OF SOUTH CAROLINA, INC.
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this ____ day of _________,
1997, by and between XXXXXXX COMPUTER RESOURCES OF SOUTH
CAROLINA, INC., a South Carolina corporation ("Company"),
and XXXXXXX X. XXXX ("Employee").
W I T N E S S E T H:
WHEREAS, Employee has exchanged 1,000 shares of the
common capital stock of The Computer Store, Inc., a South
Carolina corporation ("CSI") pursuant to an Agreement and
Plan of Reorganization ("Plan") of even date pursuant to
Section 368(a)(2)(D) of the Internal Revenue Code whereby
CSI was acquired by a merger into Company in exchange for
certain stock of Xxxxxxx Computer Resources, Inc., a
Delaware corporation, ("PCR"), the parent corporation of
Company, and other consideration as set forth in the Plan;
and
WHEREAS, Employee, as inducement for and in
consideration of Company entering into the Plan, has agreed
to enter into and execute this Employment Agreement pursuant
to Section 4 thereof; and
WHEREAS, Company desires to engage the services of
Employee, pursuant to the terms, conditions and provisions
as hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing
premises and the mutual covenants herein set forth, the
parties hereby covenant and agree as follows:
1. Employment. The Company agrees to employ the
Employee, and the Employee agrees to be employed by the
Company, upon the following terms and conditions.
2. Term. The initial term of Employee's
employment pursuant to this Agreement shall begin on the
17th day of October, 1997, and shall continue for a period
of one (1) year (October 17, 1997 to October 16, 1998)
unless terminated earlier pursuant to the provisions of
Section 10, provided that Sections 8, 9, 10(b), 11 if
applicable and 20 shall survive the termination of such
employment and shall expire in accordance with the terms set
forth therein.
3. Renewal Term. The term of Employee's employment
shall automatically renew for additional consecutive renewal
terms of one (1) year unless either party gives written
notice of his/its intent not to renew the terms of the
Agreement thirty (30) days prior to the expiration of the
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then expiring term. Employee's compensation for each
renewal term shall be determined by the Board of Directors
of the Company, provided, however, that Employee's
commission rate for any renewal term shall not be less than
the commission rate payable to him for the prior year.
4. Duties. Employee shall serve as Senior Marketing
Representative of the Company. Employee shall be
responsible to and report directly to the Vice President of
the Company. The duties assigned to Employee shall not be
inconsistent with those typically assigned to a person
holding the position set forth above and Employee shall at
all times have such powers and authorities as shall be
reasonably required to discharge such duty in a efficient
manner, together with such facilities and services as are
appropriate to his position. Employee shall devote his
best efforts and substantially all his time during normal
business hours to the diligent, faithful and loyal discharge
of the duties of his employment and towards the proper,
efficient and successful conduct of the Company's affairs.
Employee further agrees to refrain during the term of this
Agreement from making any sales of competing services or
products or from profiting from any transaction involving
computer services or products for his account without the
express written consent of Company.
5. Compensation. For all services rendered by the
Employee under this Agreement (in addition to other monetary
or other benefits referred to herein), compensation shall be
paid to Employee as follows:
(a) Commission: During the term of this
Agreement, Employee shall be paid a commission equal to
thirty-five percent (35%) of the gross profit on all Company
sales of computer hardware and software and related services
originated by Employee.
For purposes of this section, the term "gross
profit" shall mean the net sales of computer hardware,
software, and other products and services by Company that
are originated by Employee, less the cost of the goods and
services sold. In making such gross profit determination,
all gains and losses realized on the sale or other
disposition of Company's assets (other than in the ordinary
course of business) shall be excluded; all customers returns
or rebates that are made during such period shall be
subtracted along with all accounts receivable derived from
such sales that are written off as bad debt in accordance
with Company's accounting system. Said gross profit
determination shall be determined in good faith by the
Company's controller in accordance with generally accepted
accounting principles. Any commission earned hereunder
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shall be payable to Employee within fifteen (15) days after
the conclusion of the preceding month. It being the intent
of the parties to implement Employee's commission
compensation consistent with the prior methods of CSI in
compensating Employee in the manner set forth herein.
6. Fringe Benefits. During the term of this
Agreement, Employee shall be entitled to the following
benefits:
(a) Health Insurance - Employee shall be provided
with the standard medical health and insurance coverage
maintained by or for the benefit of the Company on its
employees. Company and Employee shall each pay fifty
percent (50%) of the cost of such coverage.
(b) Retirement Plan - Employee shall participate,
after meeting eligibility requirements, in any qualified
retirement plans and/or welfare plans maintained by or for
the benefit of the Company during the term of this
Agreement. For purposes of eligibility in any qualified
retirement plans, Employee shall be given credit for prior
years of service with CSI.
Employee shall be responsible for any and all
taxes, owed, if any, on the fringe benefits provided to him
pursuant to this Section 6.
(c) Unpaid Leave. Employee shall be entitled each
year to unpaid leave of forty (40) days per year during the
term of this Agreement. Provided, however, such days shall
not be taken consecutively without the written consent of
Company.
7. Expenses. During the term of Employee's
employment hereunder, Employee shall be entitled to receive
prompt reimbursement for all other reasonable and customary
expenses incurred by Employee in fulfilling Employee's
duties and responsibilities hereunder, provided that such
expenses are incurred and accounted for in accordance with
the policies and procedures reasonably established by
Company.
8. Non-Competition. Employee expressly acknowledges
the provisions of Section 3 of the Plan relating to
Employee's covenant not to compete with Company.
Accordingly, such provisions of Section 3 are incorporated
herein by reference to the extent as if restated in full
herein. In addition to the consideration received under
this Agreement, Employee acknowledges that as one of three
owners of the common stock of CSI, he has received
substantial consideration pursuant to such Plan and that as
an inducement for, and in consideration of, Company and PCR
entering into the Plan and Company entering into this
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Agreement, Employee has agreed to be bound by such
provisions of Section 3 of the Plan. Accordingly, such
provisions of Section 3 and Exhibit D-2 and the restrictions
on Employee thereby imposed shall apply as stated therein.
9. Non-Disclosure and Assignment of Confidential
Information. The Employee acknowledges that the Company's
trade secrets and confidential and proprietary information,
including without limitation:
(a) unpublished information concerning the
Company's:
(i) research activities and plans,
(ii) marketing or sales plans,
(iii) pricing or pricing strategies,
(iv) operational techniques,
(v) customer and supplier lists, and
(vi) strategic plans;
(b) unpublished financial information, including
unpublished information concerning revenues, profits and
profit margins;
(c) internal confidential manuals; and
(d) any "material non-public information" as such
phase is used for purposes of the Securities Exchange Act of
1934, as amended;
all constitute valuable, special and unique proprietary and
trade secret information of the Company. In recognition of
this fact, the Employee agrees that the Employee will not
disclose any such trade secrets or confidential or
proprietary information (except (i) information which
becomes publicly available without violation of this
Employment Agreement, (ii) information which the Employee
did not know and should not have known was disclosed to the
Employee in violation of any other person's confidentiality
obligation, and (iii) disclosure required in connection with
any legal process or by governmental agency), nor shall the
Employee make use of any such information for the benefit of
any person, firm, operation or other entity except the
Company and its subsidiaries or affiliates. The Employee's
obligation to keep all of such information confidential
shall be in effect during and for a period of five (5) years
after the termination of his employment; provided, however,
that the Employee will keep confidential and will not
disclose any trade secret or similar information protected
under law as intangible property (subject to the same
exceptions set forth in the parenthetical clause above) for
so long as such protection under law is extended.
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(e) For purposes of this provision, the term
"Company's trade secrets" and "confidential information"
shall include such information of Company's parent company,
PCR, and any of their respective subsidiaries.
10. Termination.
(a) The Employee's employment with the Company may be
terminated at any time as follows:
(i) By the Employee at his discretion, upon sixty
(60) days written notice to Company;
(ii) By Employee's death;
(iii) By Employee's physical or mental
disability which renders Employee unable to perform his
duties hereunder;
(iv) By the Company, for cause upon three (3)
day's written notice to Employee. For purposes of this
Agreement, the term "cause" shall mean termination upon:
(i) the failure by Employee to substantially perform his
duties with the Company (other than any such failure
resulting from his incapacity due to physical or mental
illness), after a written demand for substantial performance
is delivered to him by the Company, which demand
specifically identifies the manner in which the Company
believes that he has not substantially performed his duties;
(ii) the engaging by Employee in wrongful conduct which is
demonstrably and materially injurious to the Company,
monetarily or otherwise, including but not limited to any
material misrepresentation related to the performance of his
duties; (iii) the conviction of Employee of a felony or
other crime involving theft or fraud, (iv) Employee's gross
neglect or gross misconduct in carrying out his duties
hereunder resulting, in either case, in material harm to the
Company; or (v) any material breach by Employee of this
Agreement. Notwithstanding the foregoing, Employee shall
not be deemed to have been terminated for cause unless and
until there shall have been delivered to him a copy of a
resolution of the Board of Directors of the Company or any
appropriately designated committee of the Board, finding in
good faith that he has engaged in the conduct set forth
above in this Section 10(a)(iv) and specifying the
particulars thereof in detail, and Employee shall not have
cured such conduct to the reasonable satisfaction of the
Board within ten (10) days of receipt of such resolution.
(b) Compensation upon Termination: In the event of
termination of employment, the Employee or his estate, in
the event of death, shall be entitled to any commissions
accrued to the date of his termination.
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11. Disability. In the event that Employee becomes
temporarily disabled and/or totally and permanently
disabled, physically or mentally, which renders him unable
to perform his duties hereunder, Employee shall receive the
sum of Seventy-Two Thousand Dollars ($72,000) for a period
of one (1) year following the initial date of such
disability (offset by any payments to the Employee received
pursuant to disability benefit plans, if any, maintained by
the Company.) Such payments shall be payable in twelve
consecutive equal monthly installments and shall commence
thirty (30) days after the determination by the physicians
of such disability as set forth below.
For purposes of this Agreement, Employee shall be
deemed to be temporarily disabled and/or totally and
permanently disabled if attested to by two qualified
physicians, (one to be selected by Company and the other by
Employee) competent to give opinions in the area of the
disabled Employee's physical and/or mental condition. If
the two physicians disagree, they shall select a third
physician, whose opinion shall control. Employee shall be
deemed to be temporarily disabled and/or totally and
permanently disabled if he shall become disabled as a result
of any medically determinable impairment of mind or body
which renders it impossible for such Employee to perform
satisfactorily his duties hereunder, and the qualified
physician(s) referred to above certify that such disability
does, in fact, exist. The opinion of the qualified
physician(s) shall be given by such physician(s), in writing
directed to the Company and to Employee. The physician(s)
decision shall include the date that disability began, if
possible, and the 12th month of such disability, if
possible. The decision of such physician(s) shall be final
and conclusive and the cost of such examination shall be
paid by Employer.
12. Severability. In case any one (1) or more of the
provisions or part of a provision contained in this
Agreement shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or
part of a provision of this Agreement. In such a situation,
this Agreement shall be reformed and construed as if such
invalid, illegal or unenforceable provision, or part of a
provision, had never been contained herein, and such
provision or part shall be reformed so that it will be
valid, legal and enforceable to the maximum extent possible.
13. Governing Law. This Agreement shall be governed
and construed under the laws of the State of South Carolina
and shall not be modified or discharged, in whole or in
part, except by an agreement in writing signed by the
parties.
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14. Notices. All notices, requests, demands and other
communications relating to this Agreement shall be in
writing and shall be deemed to have been duly given if
delivered personally or mailed by certified or registered
mail, return receipt requested, postage prepaid:
If to Company, to: Pomeroy Computer Resources of South
Carolina, Inc.
c/o 0000 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
With a copy to: Xxxxx X. Xxxxx III
Xxxxxxxxx & Dreidame Co., L.P.A.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000
If to Employee, to the Employee's residential address,
as set forth in the Company's records.
15. Enforcement of Rights. The parties expressly
recognize that any breach of this Agreement by either party
is likely to result in irrevocable injury to the other party
and agree that such other party shall be entitled, if it so
elects, to institute and prosecute proceedings in any court
of competent jurisdiction, either in law or in equity, to
obtain damages for any breach of this Agreement, or to
enforce the specific performance of this Agreement by each
party or to enjoin any party from activities in violation of
this Agreement. Should either party engage in any
activities prohibited by this Agreement, such party agrees
to pay over to the other party all compensation,
remuneration, monies or property of any sort received in
connection with such activities. Such payment shall not
impair any rights or remedies of any non-breaching party or
obligations or liabilities of any breaching party pursuant
to this Agreement or any applicable law.
16. Entire Agreement. This Agreement and the exhibits
hereto contain the entire understanding of the parties with
respect to the subject matter contained herein and may be
altered, amended or superseded only by an agreement in
writing, signed by the party against whom enforcement of any
waiver, change, modification, extension or discharge is
sought.
17. Parties in Interest.
(a) This Agreement is personal to each of the
parties hereto. No party may assign or delegate any rights
or obligations hereunder without first obtaining the
written consent of the other party hereto; provided,
however, that nothing in this Section 16 shall preclude (i)
Employee from designating a beneficiary to receive any
benefit payable hereunder upon his death or disability, or
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(ii) executors, administrators, or legal representatives of
Employee or his estate from assigning any rights hereunder
to person or persons entitled thereto. Notwithstanding the
foregoing, this Agreement shall be binding upon and inure to
the benefit of any successor corporation of the Company.
(b) The Company will require any successor
(whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of
the assets of the Company or the business with respect to
which the duties and responsibilities of Employee are
principally related, to expressly assume and agree to
perform this Agreement in the same manner and to the same
extent that Company would have been required to perform it
if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as
aforesaid which executes and delivers the assumption
agreement provided for in this Section 16 or which otherwise
becomes bound by all the terms and provisions of this
Agreement by operation of law.
18. Representations of Employee. Employee represents
and warrants that he is not party to or bound by any
agreement or contract or subject to any restrictions
including without limitation any restriction imposed in
connection with previous employment which prevents Employee
from entering into and performing his obligations under this
Agreement.
19. Counterparts. This Agreement may be executed,
simultaneously in several counterparts, each of which shall
be deemed an original part, which together shall constitute
one and the same instrument.
20. Attorney's Fees. In the event of any dispute
arising between Employee and Company, pursuant to this
Agreement, the prevailing party shall be entitled to recover
from the non-prevailing party, the prevailing party's
reasonable attorney's fees and costs.
IN WITNESS WHEREOF, this Agreement has been executed
effective as of the day and year first above written.
COMPANY:
WITNESSES: XXXXXXX COMPUTER RESOURCES OF
SOUTH CAROLINA, INC.
_________________________
By:______________________________
_________________________
EMPLOYEE:
_________________________
_________________________________
XXXXXXX X. XXXX
_________________________
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