Exhibit 10(m)
EMPLOYMENT AND NONCOMPETE AGREEMENT
THIS EMPLOYMENT AND NONCOMPETE AGREEMENT ("Agreement"), made and
entered into as of the 28th day of January, 1997, by and between XXXXXX XXXX
XXXXX, an individual resident of Charlotte, North Carolina ("Xxxxx"), and PCA
INTERNATIONAL, INC., a North Carolina corporation with its principal executive
offices located in Matthews, North Carolina (the "Company").
IN CONSIDERATION of the promises and the mutual covenants contained
herein, the parties hereto agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions stated herein, and
in consideration of Xxxxx'x obligations and covenants, including without
limitation, those obligations and covenants set forth in Section 5 hereof, the
Company agrees to employ Xxxxx, and Xxxxx accepts such employment, as a Special
Advisor to the President and CEO, subject to the order, supervision and
direction of the Chief Executive Officer of the Company (the "CEO").
2. DUTIES. Xxxxx shall serve the Company as Special Advisor and shall
devote to the business of the Company in the performance of his duties as
Special Advisor his best efforts and such time as may be reasonably requested by
the CEO.
In no event, during the Term of Employment, shall Xxxxx be required to
report other than to the President and CEO of the Company. The President and CEO
shall deal with Xxxxx in good faith and shall not require that he relocate his
residence, require unreasonable travel, or require him to perform tasks which
would be demeaning or degrading to one in his position.
As Special Advisor, Xxxxx shall perform such duties as the President
and CEO may prescribe.
3. TERM OF EMPLOYMENT. The term of Xxxxx'x employment by the Company
hereunder shall commence as of the date hereof and shall continue for a period
of four (4) months after such commencement date (the "Term of Employment").
4. COMPENSATION. The base monthly compensation rate to be paid to Xxxxx
for the services to be rendered hereunder ("Monthly Base Rate") throughout the
Term of Employment shall be Twelve Thousand Eight Hundred Thirty-Three and
No/100 Dollars ($12,833.00), payable in accordance with the Company's normal
payroll practices, subject to applicable federal and state income and social
security tax withholding requirements. In the event any of the monthly payments
due hereunder shall become more than three (3) months past due, Employee shall
have the option to accelerate
the remaining payments due hereunder so that they shall be due and payable in
full.
5. NONCOMPETITION, SECRECY AND INVENTIONS.
(a) Xxxxx specifically acknowledges and agrees that his
employment with the Company will bring him in personal contact with accounts and
customers of the Company, and will enable him to acquire valuable information as
to the nature and character of the business of the Company and the requirements
of the accounts and customers of the Company. Xxxxx acknowledges and agrees that
in the event he were to become employed by some other employer or enter the same
or similar business as the Company on his own or in conjunction with others in
competition with the Company, such personal contacts with the customers and
accounts of the Company and the knowledge of such valuable information would
give to Xxxxx an unfair competitive advantage.
Throughout the Term of Employment and for a period of five (5) years
and eight (8) months thereafter (Xxxxx'x Term of Employment and the period
thereafter, together, the "Term of the Covenants"), Xxxxx shall not, directly or
indirectly, as principal, agent, manager, employee, partner, shareholder,
director, officer, consultant or otherwise, participate in or engage in the
Lines of Business, as hereinafter defined; provided, however, that Xxxxx may own
up to one percent (1%) of the outstanding securities of any corporation which is
engaged in the Lines of Business (except the Company) so long as such securities
are traded on a national securities exchange or are included in the National
Association of Securities Dealers Quotation System. "Lines of Business" for
purposes of this Section 5 shall mean the provision of portrait photography
services through itinerant or traveling operations or permanent studios or any
other portrait photography service, the processing or developing of photographic
film in connection with such provision and any other lines of business in which
the Company may engage during the Term of Employment.
(b) In performing the covenants set forth in this Section 5
(all of the covenants of Xxxxx set forth in this Section 5, together, the
"Covenants Not to Compete"), Xxxxx shall not, without limitation, during the
Term of the Covenants engage in the Lines of Business with any of the following:
1. any client, account or customer of the Company, or
any subsidiary or affiliate of the Company, that has
done business with the Company or such affiliate or
subsidiary within two (2) years of the date of any
alleged competitive act by Employee;
2. any client, account or customer of the Company, or
any subsidiary or any affiliate of the Company,
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that has transacted any business with the Company
within the twelve months preceding the date of this
Agreement;
3. Wal-Mart Stores, Inc. or any subsidiary thereof
("Wal-Mart");
4. any affiliate of Wal-Mart, including without
limitation Sam's Wholesale Club, HYPERMART*USA and
Wal-Mart SuperCenters (a "Wal-Mart Affiliate");
5. KMart Corporation or any subsidiary thereof
("KMart");
6. any affiliate of KMart, including without limitation
KMart SuperCenters (a "KMart Affiliate");
7. PETsMART, Inc. or any subsidiary thereof
("PETsMART");
8. any affiliate of PETsMART (a "PETsMART Affiliate");
9. any current or prospective institutional customer
("Institutional Customer");
10. CPI Corp.;
11. Lifetouch National School Studios, Inc.;
12. any Wal-Mart store that does business with the
Company during the Term of the
Covenants;
13. any Wal-Mart Affiliate store that does business with
the Company during the Term of the Covenants;
14. any Wal-Mart store with which the Company previously
conducted business but no longer conducts business or
the Board of Directors reasonably expects to do
business during the Term of the Covenants;
15. any Wal-Mart Affiliate store with which the Company
previously conducted business but no longer conducts
business or the Board of Directors reasonably expects
to do business during the Term of the Covenants;
16. any PETsMART store that does business with the
Company during the Term of the Covenants;
17. any PETsMART Affiliate store that does business with
the Company during the Term of the Covenants;
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18. any PETsMART store with which the Company previously
conducted business but no longer conducts business or
the Board of Directors reasonably expects to do
business during the Term of the Covenants;
19. any PETsMART Affiliate store with which the Company
previously conducted business but no longer conducts
business or the Board of Directors reasonably expects
to do business during the Term of the Covenants;
20. any Institutional Customer with which the Company
previously conducted business but no longer conducts
business or the Board of Directors reasonably expects
to do business during the Term of the Covenants;
21. any KMart store that does business with the Company
during the Term of the Covenants;
22. any KMart store that does business with the Company
during the Term of the Covenants;
23. any KMart store with which the Company previously
conducted business but no longer conducts business or
the Board of Directors reasonably expects to do
business during the Term of the Covenants;
24. any KMart Affiliate store with which the Company
previously conducted business but no longer conducts
business or the Board of Directors reasonably expects
to do business during the Term of the Covenants;
25. Xxxxx, X.X. de C.V.;
26. Aurrera, S.A. de C.V., a subsidiary of Xxxxx, X.X. de
C.V.;
27. any other subsidiary of Xxxxx, X.X. de C.V.;
28. Xxxx Xxxxx;
29. Expressly Portraits;
30. any employee or former employee of the Company, whose
employment with the Company terminated less than two
(2) years prior to Employee's association with such
employee or former employee, within a ten-mile radius
of any Wal-Mart store or any store in which the
Company has engaged in the Lines of Business within
six (6) months prior to Employee's engaging in the
Lines of Business; or
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31. any person or entity in the geographic areas listed
in paragraph 10(c) hereinbelow.
(c) In performing the Covenants Not to Compete, Xxxxx shall
not, without limitation, during the Term of the Covenants engage in the Lines of
Business in any of the following geographic areas:
1. The United States of America;
2. The State of Alabama;
3. The State of Arizona;
4. The State of Arkansas;
5. The State of California;
6. The State of Colorado;
7. The State of Connecticut;
8. The State of Delaware;
9. The District of Columbia;
10. The State of Florida;
11. The State of Georgia;
12. The State of Idaho
13. The State of Illinois;
14. The State of Indiana;
15. The State of Iowa;
16. The State of Kansas;
17. The State of Kentucky;
18. The State of Louisiana;
19. The State of Maine;
20. The State of Maryland;
21. The State of Massachusetts;
22. The State of Michigan;
23. The State of Minnesota;
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24. The State of Mississippi;
25. The State of Missouri;
26. The State of Montana
27. The State of Nebraska;
28. The State of Nevada
29. The State of New Hampshire;
30. The State of New Jersey;
31. The State of New Mexico
32. The State of New York;
33. The State of North Carolina;
34. The State of North Dakota;
35. The State of Ohio;
36. The State of Oklahoma;
37. The State of Oregon;
38. The State of Pennsylvania;
39. The Commonwealth of Puerto Rico;
40. The State of Rhode Island;
41. The State of South Carolina;
42. The State of South Dakota;
43. The State of Tennessee;
44. The State of Texas;
45. The State of Utah
46. The State of Vermont;
47. The State of Virginia;
48. The State of Washington;
49. The State of West Virginia;
50. The State of Wisconsin;
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51. The State of Wyoming;
52. Mexico;
53. Canada;
54. Puerto Rico;
55. South America;
56. Latin America;
57. Asia;
58. China; and
56. Counties in each State of the United States where the
Company has customers.
(d) As applied to the categories of persons, firms and
entities and geographic areas covered by the Covenants Not to Compete, the
provisions of paragraphs 5(b) and 5(c), respectively, shall be completely
severable and independent, and any invalidity or unenforceability thereof as
applied to any of such persons, firms or entities or geographic areas shall not
affect the validity or enforceability thereof as applied to any one or more of
the other persons, firms or entities or geographic areas.
(e) Throughout the Term of the Covenants, Xxxxx shall not
directly or indirectly cause or attempt to cause any supplier or customer of the
Company, or any of its subsidiaries or affiliates, or any governmental body or
public agency, not to do business with the Company or such subsidiary or
affiliate or -to transfer all or part of its business from the Company-, or such
subsidiary or affiliate, or otherwise interfere or attempt to interfere with any
business relationship between the Company, or any of its subsidiaries or
affiliates, and any of such suppliers, customers, government bodies or public
agencies, unless directed by the Board of Directors of the Company to so do.
(f) Xxxxx acknowledges that irreparable injury will result to
the Company from any breach of the Covenants Not to Compete and there is no
adequate remedy at law to redress a breach or threatened breach of the Covenants
Not to Compete As a result of the foregoing, Xxxxx agrees that the parties
seeking to enforce any of such provisions shall be entitled to an injunction or
other equitable relief against Xxxxx to restrain him from such breach, and Xxxxx
waives any claim or defense that the Company has an adequate remedy at law for
any such breach; provided, however, that nothing contained herein shall prohibit
the Company, or any subsidiary or affiliate of the Company, from pursuing any
other remedy it may have, including without limiting the generality of the
foregoing the recovery of damages.
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(g) If any court determines that any provision of this Section
5, or any part thereof, is invalid or unenforceable, the remainder of this
Section 5 shall not thereby be affected and shall be given full effect, without
regard to the invalid portions. If any court determines that any provision of
this Section 5, or any part thereof, is unenforceable because of the duration or
geographic scope of such provision, the parties agree that such court shall have
the power to reduce the duration or scope of such provision, as the case may be,
and the parties agree to request the court to exercise such power, and, in its
reduced form, such provision shall then be enforceable and shall be enforced.
The provisions of this Section 5 shall survive the termination of this
Agreement, for whatever reason.
(h) At all times, both during and after the termination of his
employment, Xxxxx shall keep and retain in confidence and shall not, without the
prior written consent of the Company, disclose to any persons, firm or
corporation or otherwise use for his own benefit or the benefit of another any
of the proprietary, confidential or secret information or trade secrets of the
Company. Further, Xxxxx and the Company agree to keep confidential the terms and
conditions of this Agreement except for such disclosure as may be required (i)
in the event of a breach of this Agreement, (ii) compulsion by law or court
order, or (iii) as may be required by any applicable provision of law.
(i) In consideration of employment, and the compensation paid
to Xxxxx as an employee of the Company, Xxxxx hereby recognizes as the exclusive
property of, and assigns, transfers and conveys to, the Company without further
consideration each invention, discovery or improvement (hereinafter collectively
referred to as "inventions") made, conceived, developed or first reduced to
practice by Xxxxx (whether alone or jointly with others) during the Term of
Employment or within one (1) year thereafter which relates in any way to Xxxxx'x
work at the Company or any of its subsidiaries or affiliates. Employee will
communicate to the Company current written records of all such inventions, which
records shall be and remain the property of the Company. Upon request by the
Company, Xxxxx will at any time execute documents assigning to the Company, or
its designees, any such invention or any patent application or patent granted
therefor, and will execute any papers relating thereto. Xxxxx also will give all
reasonable assistance to the Company, or its designee, regarding any litigation
or controversy in connection with his inventions, patent applications, or
patents, all expenses incident thereto to be assumed by the Company.
(j) As additional consideration payable hereunder and specifically as
payment for the Covenants Not to Compete, the Company shall pay to Xxxxx the
Monthly Base Rate beginning at the end of the Term of Employment throughout the
Term of the Covenants. Such payments shall be made monthly in arrears. In the
event any of the monthly payments due hereunder shall become more than three (3)
months past due, Employee shall have the option to accelerate
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the remaining payments due hereunder so that they shall be due and payable in
full.
(k) Notwithstanding anything herein to the contrary, any participation
in or engagement in the Lines of Business by Interactive Solutions, Inc., a
North Carolina corporation, or any successor thereto, or by Xxxxx Xxxxxxx, a
resident of North Carolina, shall be a breech of this Section 5 by Employee.
6. GOVERNING LAW. This Agreement shall be construed and governed under
the laws of the State of North Carolina.
7. BINDING NATURE. Except as expressly provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors and assigns. The obligations and covenants of Xxxxx
are personal in nature and, as such, are not assignable by him.
8. ENTIRE AGREEMENT; PRIOR ORAL AGREEMENT; AMENDMENT. This Agreement
contains the entire agreement of the parties with respect to the matters set
forth herein and supersedes all prior written and prior or contemporaneous oral
agreements or understandings of the parties hereto. This Agreement confirms and
sets forth the prior oral agreement of the parties as to the terms and
conditions of Xxxxx'x employment by the Company stated herein, including without
limitation, the obligations and covenants of Xxxxx set forth in Section 5
hereof, and Xxxxx'x agreement to enter into a written employment agreement with
the Company, as of the date his employment by the Company commenced, stating
such terms and conditions. This Agreement may be changed or amended only by an
agreement in writing signed by both parties hereto.
9. SEVERABILITY, INVALIDITY OR UNENFORCEABILITY. The severability,
invalidity or unenforceability of any paragraph or part of any paragraph herein
shall not in any way affect the validity or enforceability of any other
paragraph or any part of any other paragraph.
10. PRIOR AGREEMENTS AND COVENANTS OF XXXXX. Xxxxx hereby warrants and
represents that he is not a party to any agreement or binding obligation, oral
or written, that would prevent his employment by the Company, and Xxxxx'x
execution of this Agreement and his fulfillment of his duties and obligations
hereunder do not and will not violate the provisions of any agreement, contract,
loan document or other binding written or oral obligation.
11. NOTICES. Any notice, offer, acceptance or other document required
or permitted to be given pursuant to any provisions of this Agreement shall be
in writing, signed by or on behalf of the person giving the same, and (as
elected by the person giving such notice) delivered by hand or mailed to the
parties at the following addresses by registered or certified mail, postage
prepaid, return receipt requested, or by a third party company or governmental
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entity providing delivery services in the ordinary course of business, which
guarantees delivery on a specified date:
If to Xxxxx: Xxxxxx Xxxx Xxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
If to the Company: PCA International, Inc.
000 Xxxxxxxx-Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
With copies to: Xxxxxx X. Xxxxxx
XXXXXXXX, XXXXXXXX & XXXXXX, P.A.
One Independence Center
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
(000) 000-0000
or to such other address as any party hereto may designate by complying with the
provisions of this Section 15.
Such notice shall be deemed given (i) as of the date of written
acknowledgment by Xxxxx or an officer of the Company if delivered by hand, (ii)
seventy-two (72) hours after deposit in United States mail if sent by registered
or certified mail or (iii) on the delivery date guaranteed by the third party
delivery service if sent by such service.
Rejection or other refusal to accept or inability to deliver because of
changed address of which no notice has been received shall not affect the date
upon which the notice is deemed to have been given pursuant hereto.
Notwithstanding the foregoing, no notice of change of address shall be effective
until the date of receipt hereof.
16. STOCK OPTION GRANT. Xxxxx will be granted an option to purchase
100,000 shares of the Company's common stock on the date hereof, having an
exercise price equal to 100% of the closing price at which a share of Common
Stock trades on the date of the grant's Effective Date, all as defined in the
PCA International, Inc. 1996 Omnibus Long-Term Compensation Plan (the "Plan").
Such option shall be treated as a nonqualified stock option for federal income
tax purposes. Such option shall terminate on a date that is five (5) years
following the date of grant and shall not terminate for any reason prior to such
date, including without limitation, the termination of Xxxxx'x employment
hereunder. Upon the death of Xxxxx within such 5 year period, the options
granted hereunder will be transferred to his estate or as directed in his will.
Such options shall be exercisable in full on the grant's Effective Date.
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IN WITNESS WHEREOF, Xxxxxx Xxxx Xxxxx has set his hand and seal hereto
and PCA International, Inc. has caused this Agreement to be executed and sealed
in its name by its duly authorized officials as of the day and year first above
written.
XXXXX:
/s/ Xxxxxx Xxxx Xxxxx
----------------------(SEAL)
XXXXXX XXXX XXXXX
COMPANY:
PCA INTERNATIONAL, INC.
By: /s/ Xxxx Xxxxxx
-----------------------
Xxxx Xxxxxx
President and CEO
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